What you need to know:

• Publisher expectations that the Federal Government would act swiftly on Meta’s refusal to renew three-year media funding deals under the Media Bargaining Code have been replaced with industry frustration over a lack of communication and an information “back hole” from government.

• News Corp and Nine execs privately say “designation” of Meta, forcing it into independent arbitration with media companies, ranged from a “25 per cent chance” to a 50-50 probability.    

• The circa $75m funding gap to publishers from Meta’s policy u-turn is a “perfect storm” for publishers, per Capital Brief CEO Chris Janz – gambling ad reform, Meta’s funding pull, a contracting advertising market and ongoing consolidation of the advertising and media market were major challenges.

• Current media industry conjecture includes a government response to Meta that could broaden to a levy or tax on more tech firms from which the proceeds would be distributed more broadly than under current Media Bargaining Code definitions.     

Feisty for nothing?

Expectations among media firms earlier this year was that a feisty Labor government would "designate" Meta after it turned on its previous media funding deals, forcing the platform into negotiations with media companies via an independent arbitrator who would decide on compensation Meta must pay for carrying news on its platform. 

But Meta has said rather than pay, it would pull news in Australia, leaving the Government with more unresolved competition and “public interest” challenges around social platforms.

Now, six months after Meta announced it would not renew funding deals under the Media Bargaining Code framework, most publishers say they have no sense on timing or intent from the Federal Communications Minister, Michelle Rowland, nor the Assistant Treasurer, Stephen Jones, on what they plan to do with Meta.

News Corp and Nine had no official comment but some executives privately at News are now “50-50” on whether the government will designate, while a senior figure at Nine reckoned “designation was 25 per cent likely to happen”. Most say they don’t know what the government is thinking.

“They can designate, they don’t have to, they may not – they may be thinking other things,” said one executive at a large news publisher who did not want to be named. “The word tech ‘levy’ keeps being bandied about and hasn’t been knocked back.”

Another said the communication coming out of “[Michelle] Rowland's office is hopeless. One minute it’s a social levy and no designation, then it’s not. The wind keeps changing direction. It’s really concerning.”    

Former Nine Publishing CEO, Chris Janz, who launched the subscription-only news publisher, Capital Brief, was one of the few publishers to talk on record:

“Media is facing a perfect storm – it’s clear the ad market is in decline, there’s gambling ad reform, the loss of Meta money, the consolidation and concentration that’s taking place [in the media and ad market] and the news media assistance program still hasn’t made any progress. The industry is really challenged.”

Janz also flagged how many think the government might respond – tagged “designation plus” in which a levy or another mechanism is applied to Meta or all tech and distributed more broadly than the current definition of news and public interest journalism.

Speculation flies

Assistant Treasurer Stephen Jones triggered more intrigue when he told the National Press Club late last month the Government’s response “won’t end” with the News Media Bargaining Code and it would be a “whole-of-government” response.

“… the News Media Bargaining Code was a perfectly sensible and effective tool back in 2021 to deal with the circumstances in 2021," Jones said. "Those circumstances have changed significantly, and our response will be a whole‑of‑government response, which will deal with all of the challenges that we face in the news media environment in 2024.”

As to what a “whole-of-government” might look like, no-one is quite sure. Some have their money on the aforementioned levy within the existing tax system or perhaps within the current Media Bargaining Code legislation – others think such a scheme should be at arm’s length from the Government.

Either way, Treasury has been considering such scenarios in its advice to the Government.

The Assistant Secretary to the Treasury’s Competition and Consumer Branch, Tony McDonald told the Joint Select Committee on Social Media and Australian Society in June: “The focus of the points that we have been considering, including in response to proposals from institutions like PIJI, is to what extent a taxing power might be an avenue to encourage compliance with the News Media Bargaining Code, which is probably saying more than I'm supposed to, so I might leave it there.”

Designation in the balance

Others are still convinced that designation will form a necessary part of the Government’s response to Meta, suggesting the Government would be hesitant to throw the Code to the wayside just three years in.

As the Digital Publishers Alliance chair Tim Duggan told Mi3 several weeks back, “sometimes it's in the best interest to modify an existing tool, however flawed, precisely because it is an existing tool, and it took years for the News Media Bargaining Code to get developed”.

Australia’s biggest media companies have likewise made their case, and while they insist that they have no visibility as to what will be on the table when the Government finally lays out its plans, it seems they are making preparations for a designation event.

Both Nine and News Corp are recent entrants to the Australian Communication and Media Authority’s (ACMA) register of eligible news businesses – the latter as recently as two weeks ago. A necessary piece of the News Media Bargaining Code, the list renders publishers eligible for funding from digital platforms should a designation event occur.

Both businesses, it’s understood, did not go through with the rigmarole of becoming registered in the early years of the Code, as they’d already managed to strike up private deals with Google and Meta. Now, they’re getting their ducks in a row before it’s too late – registration can be a lengthy process.

They’re amongst a plethora of other publishers that have made the same move since Meta cut news funding in March, including Schwartz Media, The Music, We Are Explorers, and a handful of independent regional mastheads.

Should the Assistant Treasurer make good on his designation power, and should a Meta news ban follow – as many suspect it would, and Meta has not explicitly denied – it's assumed those on ACMA's list would be the first to be punted from the tech giant's platforms. But we don't know for sure – even Meta has expressed frustrations with the vague definitions outlined in the legislation. 

Defining definitions

As publishers fear Meta could cause mayhem in the Australian news industry, the platform has pushed the blame for the lack of clarity back onto the Government for its poorly scoped definitions of what constitutes a news site. That gap risks a repeat of the chaos caused in 2021 when Meta pulled the pin on news sites and took out essential services in the process – but permanently.

Even if the Government were to take the alternative route of a levy or redistribution of properly taxed local platform revenues, there would still be a way to go to get all stakeholders on the same page when it comes to eligibility. Take Man of Many co-founder Scott Purcell's response to Michael Miller's recent op-ed for The Australian – in unpacking Meta's 'lies' the News Corp Australia boss also took a jab at the often social media-dependent lifestyle publishers who are claiming the 'news' classification'. 

"Miller’s argument that lifestyle content is not “essential” and does not fall under the "news" seems to misunderstand the Code. The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021, along with the News Media Bargaining Code Guidelines, makes it clear that core news encompasses much more than traditional “public interest journalism," wrote Purcell in post made on LinkedIn last week. 

"What’s considered “essential” information is subjective and varies widely among different audiences. While hard news topics are undeniably crucial, lifestyle content plays a significant role in informing and shaping public opinion, culture, and daily decisions. Take a quick look at the homepage of news.com.au and whether all of that information is considered "essential"," he continued.

Some helpful context here would be just how the Government has defined news – and there are multiple aspects to it.

Per the Code, a news business is defined as a news source or combination of news sources. And a news source, so long as it produces news content and publishes it online, can be constituted by any of the following: a newspaper masthead; a magazine; a television program or channel; a radio program or channel; a website or part of a website; and a program of audio or video content designed to be distributed over the internet.

But not all news businesses fall under the News Media Bargaining Code. To be eligible for the Code, news businesses must first be formally recognised by the Australian Communications and Media Authority (ACMA) and labelled accordingly as a ‘registered news business’.

To achieve that honour, they’re required to pass the following four tests:

• Content test: The primary purpose of the news source must be to publish news content. Here, “core news content” is determined as content that “reports, investigates or explains” either “issues or events that are relevant in engaging Australians in public debate and in informing democratic decision‑making” or “current issues or events of public significance for Australians at a local, regional or national level”.
• Professional standards test: The news source must follow relevant professional codes of practice and maintain editorial independence from their subjects.
• Revenue test: The annual revenue of the business must exceed $150,000 in the preceding year, or at least three of the last five preceding years.
• Australian audience test: The news source must predominately operate in Australia to serve Australian audiences.

Whether or not lifestyle content should meet the definition for news – and to be clear ACMA has ticked that box in the case of Man of Many, Time Out, The Urban List, Broadsheet and Junkee Media – the concern for many is that the definitions in the legislation leave too much up to interpretation. That could prove problematic for any one of the possible scenarios that might unfold when the Government lays out its long-awaited plan – or at least signals on its timing and intent. Some say they're now working to a year-end announcement.