{"id":38976,"date":"2017-05-19T15:13:25","date_gmt":"2017-05-19T22:13:25","guid":{"rendered":"http:\/\/world.edu\/?p=38976"},"modified":"2017-05-19T15:13:25","modified_gmt":"2017-05-19T22:13:25","slug":"levy-facebook-google-fund-journalism-heres","status":"publish","type":"post","link":"https:\/\/world.edu\/levy-facebook-google-fund-journalism-heres\/","title":{"rendered":"We should levy Facebook and Google to fund journalism \u2013 here\u2019s how"},"content":{"rendered":"

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There was a fascinating moment towards the end of Wednesday\u2019s hearings of the Senate Inquiry into the Future of Public Interest Journalism<\/a>.<\/p>\n

Journalist Michael West was at the stand. West\u2019s experience is in many ways emblematic. Once a marquee investigator for Fairfax Media with multiple scoops to his name, West was made redundant in one of Fairfax\u2019s seemingly endless rounds of job shedding in recent years. He used his redundancy cheque to found a startup, MichaelWest.com.au<\/a>, and took a position as an adjunct professor at the University of Sydney.<\/p>\n

West has long been a dogged investigator of corporate excess. He pointed out to the hearing that articles<\/a> he and Neil Chenoweth wrote while at Fairfax several years ago had led directly to a Senate inquiry into corporate tax avoidance. The findings of that inquiry \u2013 that multinationals like Google and Apple were sending most of their Australian revenues offshore, and paying just cents in the dollar in tax \u2013 resulted in tighter laws for global corporations hiding profits in offshore accounts.<\/p>\n

\u201cAs a result of that, in the budget last week, [Treasurer] Scott Morrison said that they were expecting $2.9 billion rather than $2 billion, as originally anticipated, from just seven companies,\u201d West said.<\/p>\n

So, as a result of political action from the Senate and public interest journalism, there is a billion dollars cash\u2014 bang!<\/em><\/p>\n

West added that sources in the Australian Tax Office told him that \u201cthere are behavioural changes in the way that multinational companies are regarding this issue of how aggressive they can be on the tax front\u201d and that the ATO is \u201cexpecting billions of dollars to flow from that\u201d.<\/p>\n

Committee member Senator Nick Xenophon then quipped:
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\nIf only you got one-tenth of one per cent of that, Mr West.<\/em><\/p>\n

Public interest journalism is important for many reasons, including the vital role it plays in holding the powerful to account. But few would have predicted it would play such an instrumental role in plugging Australia\u2019s leaky company tax base.<\/p>\n

The senate inquiry comes at an important time. With Fairfax Media at play in the stock market and yet more redundancies at the big newspaper publisher announced, for-profit journalism in Australia has never seemed so vulnerable.<\/p>\n

The market dominance of the two US tech giants Google and Facebook is such that they constitute an effective duopoly on online Australian media. These two companies now control the majority of the eyeballs of ordinary Australians. A single graph from market research firm Nielsen best illustrates this.
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Facebook and Google dominate the online consumption of Australians. Graph shows sessions per person plotted against active reach; circle size indicates unique audience. Nielsen Digital Ratings, March 2017. Nielsen Digital Ratings, March 2017<\/p><\/div><\/p>\n

You can see that Facebook and Google have reached almost total saturation of the Australian audience in terms of \u201cactive reach\u201d (the percentage of people accessing a particular site or platform). Not only do they have the two largest audiences, but they also soak up the most time spent online. Google\u2019s true size is actually obscured by the fact that its subsidiary YouTube is broken out; YouTube and Facebook are ranked one and two for streaming in Australia.<\/p>\n

When it comes to advertising, the duopoly is just as entrenched. A tweet by analyst Jason Kint went viral in late 2016. He estimated that Facebook and Google\u2019s collective share of global digital advertising revenue was about 70%. All the growth in advertising revenue is being captured by the two duopolists; astonishingly, ad revenue outside the twin giants was actually falling. Given that advertising is increasingly digital and online, the two companies have quickly established market dominance.<\/p>\n