Författare: Rob Nicholls Senior Research Associate in Media and Communic

The Global Media Internet Concentration Project examines the concentration of the communications and media in countries around the world.

The latest data for Australia have recently been released, and they show just how big Google is here.

Alphabet (Google’s parent company) had 2022 revenue in Australia of A$7.9 billion.

That revenue is only exceeded by Telstra, and is bigger than Optus and NBN Co. It’s also bigger than the revenues of News Corporation and Nine Entertainment combined.

The network media economy includes telecoms and internet infrastructure, digital and traditional publishing and internet-based companies. The 2022 revenue of this economy in Australia was $69 billion. The revenue of the top four telecommunications operators accounted for half of that.

The major internet advertising players were, unsurprisingly, Google and Meta. Together, they had revenue in excess of $10 billion.

While this sector is clearly a major part of the Australian economy, there are significant problems yet to be solved. Namely, how do we fund public-interest journalism in a sector that’s concentrated to a few major players? The report has some insights to help guide the path forward.

Highly concentrated market

Australia has traditionally had the most concentrated media sectors in the OECD. The report shows this hasn’t changed.

News Corporation, the commercial television networks and Southern Cross Media are the major players across television, newspapers and radio. Concentration in commercial radio increased significantly over the 2019–22 period.

Advertising companies accounted for 25% of News Corp’s total revenue in 2022.
Shutterstock

Australia’s media concentration is among the highest in the Western world.

One new feature is the importance of classified advertising players in their own right.

For example, Seek and the Car Group are in the top 20 businesses by revenue. An examination of the News Corp revenue shows that REA (realestate.com), which is majority-owned by News Corp, provides about 25% of News Corp’s total revenue. This figure is 70% of the company’s newspaper revenue.

Nine Media owns 60% of Domain. While in 2023–24 Domain represents less than 10% of Nine’s revenue, it is a more significant (about 25%) contributor to free cash flow.

The opaque world of streaming

One of the more interesting sectors is online video services. The availability of revenue information for this sector is patchy as many of its largest operators are either global media players (Netflix, Disney+) or part of complex digital businesses (Amazon Prime, Apple TV).

It’s a sector where there is evidence of both disruption of traditional media oligopolies in broadcast TV and the entry of traditional media players into streaming. Nine Entertainment has Stan, News Corporation has Binge and Kayo, and Network 10 has Paramount+ in partnership with Paramount.

One challenge facing the federal government is whether online video services can be obligated to meet Australian content requirements, as commercial broadcasters currently are.

What about news?

An issue that flows from this report is the prospect of an alternative to the News Media Bargaining Code.

Under the code, tech companies and news organisations could negotiate to pay for content and have it included on digital platforms. Until now, it hasn’t been used by Meta because it had commercial arrangements directly with media companies, but those have since expired and won’t be renewed.

Read more:
Facebook won’t keep paying Australian media outlets for their content. Are we about to get another news ban?

The government and media alike are still grappling with how to fund public interest journalism. There’s also appetite to adequately regulate huge tech companies to better reflect their size in the Australian market.

One option is a digital services tax. However, this would be problematic in the context of Australia’s obligations under the World Trade Organisation and the free trade agreement with the United States.

Digital services taxes have also formed part of OECD discussions on “Pillar 1” of a Global Tax Agreement. France and the United Kingdom have revised their positions on such taxes and have committed to withdraw them.

How about a levy?

An alternative approach would be a public interest journalism levy in a similar form to the Telecommunications Infrastructure Levy.

Under the Telecommunications Act, service providers are either carriage service providers or content service providers. Both forms are class licensed.

Broadly, carriage service providers that operate specified infrastructure must hold a carrier licence. Holders of a carrier licence with revenue greater than $25 million per year must contribute to the levy.

Companies like Meta could be subject to a public interest journalism levy in Australia.
Jeff Chiu/AP

A simple mechanism would be to introduce a new form of content licence. There would then be a requirement that content service providers which operate specified infrastructure must hold a content licence.

Holders of a content licence with revenue greater than $25 million per year would be required to contribute to the public interest journalism levy.

The contribution to the levy could be made proportionate to the returns received through digital advertising.

On current figures, Alphabet and Meta would contribute about 70% of the levy. Handily, the scheme would have the benefit of not requiring the federal government to designate particular companies (like it does under the bargaining code).

The levy also wouldn’t be contingent on the value of news to the overall platform. If Meta decides they don’t care for platforming news, for example, the levy wouldn’t change.

The rate of the levy would depend on the level of funding required. However, using the revenues in the report, it would be lower than 2% of content service revenue. This would make for a funding pool about the same size as it currently available to news organisation under the bargaining code.

Read more:
How well is the federal government regulating social media in Australia? Läs mer…

This is the fourth piece in a series on the Future of Australian media. You can read the rest of the series here.

We are part-way through the work of the Joint Select Committee on Social Media and Australian Society. The committee’s interim report was due on August 15, but has been delayed by the previous chair’s promotion to cabinet.

So how well is the federal government regulating social media companies? This report card focuses on news and dangerous or inappropriate content.

A mixed report card

There are two critical issues here. The first is whether the social media companies are assisting in their own regulation. The second is the extent to which they are meeting their (implied) social obligations.

An example is Meta (owner of Facebook) and the eSafety commissioner. The commissioner has asked social media businesses to find out just how many Australian children are on their platforms and what measures they have in place to enforce their own age limits. For most platforms, the age limit is 13.

Read more:
Meta has a new plan to keep kids safe online, but it’s a missed opportunity for tech giants to work together

Meta takes the view that parents should manage their children’s Meta accounts.
From a regulatory perspective, the regulated business Meta has decided that other people (parents) should enforce the self-regulatory framework designed by Meta.

In the context of age verification, the government has signalled that Meta is unable to enforce its own rules and proposes to set a new minimum age. The details of this are still unclear.

Read more:
View from The Hill: Social media age ban all to the good, but can Albanese deliver before election?

At the same time, Meta is still giving evidence that it may block news content, as it has done in Canada, if it is forced to negotiate deals with news media businesses.

In the end, the News Media Bargaining Code has worked for three years by leveraging the risk of “designation”. The minister (usually the treasurer, but currently the assistant treasurer) may designate a digital platform business if that business has a bargaining power advantage over news media businesses, but is not making a significant contribution to the sustainability of the Australian news industry. Having survived withdrawing services in Canada, Meta now takes the view that the risk is substantially mitigated.

X: could do better

Although Meta pushes back against age-verification regulation, it is generally responsive to take-down notices. This is partly because it has a team in Australia to deal with those.

Read more:
Elon Musk is mad he’s been ordered to remove Sydney church stabbing videos from X. He’d be more furious if he saw our other laws

X Corp (formerly Twitter) does not. The primary reason that X was shut down in Brazil is that it did not have a lawyer on whom to serve notices.

X has little in the way of presence in Australia. Regulatory enforcement requires someone to be regulated. This is the primary blot on the report card for X. It’s really difficult to assess the effectiveness of regulation without the regulated business being present.

At the heart of the problem with regulating X Corp, regardless of the country in which the regulations are applied, is the unwillingness by the owner of that business to be regulated. Conflating the removal of inappropriate content with US-centric free-speech arguments is always going to be problematic outside of the US.

Good regulation relies on at least the tolerance of being regulated.

News: alternatives available

So, if the News Media Bargaining Code is not going to be a significant mechanism for funding public-interest journalism, there needs to be another solution. One approach is to impose a digital services tax.

However, this becomes risky if it looks like a tax that is selectively applied to specific international businesses. Australia has made commitments at the OECD on ways in which it will deal with profits diverted to low-taxing countries.

The University of Sydney has proposed an alternative approach to the joint select committee: to have an industry levy on a class of businesses that provide digital content services. This could ensure Australia’s international obligations in both tax and trade are not compromised by funding public-interest journalism.

Advertising issues

Meta has strong self-regulatory policies on advertising crypto products and services. However, the Australian Competition and Consumer Commission (ACCC) has alleged that more than half of crypto ads on Facebook are scams. Given that scams are a significant problem in Australia, it’s not surprising all of the relevant regulators are concerned about this issue.

Perhaps this is one of the most important aspects of the regulatory report card. There are four relevant regulators in Australia. These are the ACCC, the Australian Communications and Media Authority (ACMA), the Office of the Australian Information Commissioner (OAIC) and the eSafety Commissioner. Together, they form an important, but unfunded, group called DP-REG.

This group focuses on getting regulatory coherence and clarity. It also assesses and responds to the benefits, risks and harms of technology. That is, it forms the basis for the development of stronger and multilateral regulatory responses to social media issues.

The group has the potential to look at how money flows as well as content. However, co-ordination is much easier with appropriate funding.

A coherent approach from these regulators offers the best possible potential for an improved regulatory report card. Läs mer…

This is the fourth piece in a series on the Future of Australian media. You can read the rest of the series here.

We are part-way through the work of the Joint Select Committee on Social Media and Australian Society. The committee’s interim report was due on August 15, but has been delayed by the previous chair’s promotion to cabinet.

So how well is the federal government regulating social media companies? This report card focuses on news and dangerous or inappropriate content.

A mixed report card

There are two critical issues here. The first is whether the social media companies are assisting in their own regulation. The second is the extent to which they are meeting their (implied) social obligations.

An example is Meta (owner of Facebook) and the eSafety commissioner. The commissioner has asked social media businesses to find out just how many Australian children are on their platforms and what measures they have in place to enforce their own age limits. For most platforms, the age limit is 13.

Read more:
Meta has a new plan to keep kids safe online, but it’s a missed opportunity for tech giants to work together

Meta takes the view that parents should manage their children’s Meta accounts.
From a regulatory perspective, the regulated business Meta has decided that other people (parents) should enforce the self-regulatory framework designed by Meta.

In the context of age verification, the government has signalled that Meta is unable to enforce its own rules and proposes to set a new minimum age. The details of this are still unclear.

Read more:
View from The Hill: Social media age ban all to the good, but can Albanese deliver before election?

At the same time, Meta is still giving evidence that it may block news content, as it has done in Canada, if it is forced to negotiate deals with news media businesses.

In the end, the News Media Bargaining Code has worked for three years by leveraging the risk of “designation”. The minister (usually the treasurer, but currently the assistant treasurer) may designate a digital platform business if that business has a bargaining power advantage over news media businesses, but is not making a significant contribution to the sustainability of the Australian news industry. Having survived withdrawing services in Canada, Meta now takes the view that the risk is substantially mitigated.

X: could do better

Although Meta pushes back against age-verification regulation, it is generally responsive to take-down notices. This is partly because it has a team in Australia to deal with those.

Read more:
Elon Musk is mad he’s been ordered to remove Sydney church stabbing videos from X. He’d be more furious if he saw our other laws

X Corp (formerly Twitter) does not. The primary reason that X was shut down in Brazil is that it did not have a lawyer on whom to serve notices.

X has little in the way of presence in Australia. Regulatory enforcement requires someone to be regulated. This is the primary blot on the report card for X. It’s really difficult to assess the effectiveness of regulation without the regulated business being present.

At the heart of the problem with regulating X Corp, regardless of the country in which the regulations are applied, is the unwillingness by the owner of that business to be regulated. Conflating the removal of inappropriate content with US-centric free-speech arguments is always going to be problematic outside of the US.

Good regulation relies on at least the tolerance of being regulated.

News: alternatives available

So, if the News Media Bargaining Code is not going to be a significant mechanism for funding public-interest journalism, there needs to be another solution. One approach is to impose a digital services tax.

However, this becomes risky if it looks like a tax that is selectively applied to specific international businesses. Australia has made commitments at the OECD on ways in which it will deal with profits diverted to low-taxing countries.

The University of Sydney has proposed an alternative approach to the joint select committee: to have an industry levy on a class of businesses that provide digital content services. This could ensure Australia’s international obligations in both tax and trade are not compromised by funding public-interest journalism.

Advertising issues

Meta has strong self-regulatory policies on advertising crypto products and services. However, the Australian Competition and Consumer Commission (ACCC) has alleged that more than half of crypto ads on Facebook are scams. Given that scams are a significant problem in Australia, it’s not surprising all of the relevant regulators are concerned about this issue.

Perhaps this is one of the most important aspects of the regulatory report card. There are four relevant regulators in Australia. These are the ACCC, the Australian Communications and Media Authority (ACMA), the Office of the Australian Information Commissioner (OAIC) and the eSafety Commissioner. Together, they form an important, but unfunded, group called DP-REG.

This group focuses on getting regulatory coherence and clarity. It also assesses and responds to the benefits, risks and harms of technology. That is, it forms the basis for the development of stronger and multilateral regulatory responses to social media issues.

The group has the potential to look at how money flows as well as content. However, co-ordination is much easier with appropriate funding.

A coherent approach from these regulators offers the best possible potential for an improved regulatory report card. Läs mer…