Google this: French media payment deal shows Australia what to expect

Australia’s old media and big tech subsidiaries are edging forward on their seats, waiting to see the final shape of the news bargaining mandatory code to be tabled before parliament rises for the year at the end of next week.

There have been a few background briefings out of Canberra through an interested media: looks like the ABC and SBS will be included in the money pot; the code will take into account the value the platforms’ facilitated discovery brings to old media (or maybe it won’t); publishers seem to have backed off demands for access to more Google data and privileged insights into algorithmic changes.

And now, from France, there’s some indication of just how much money might go into the pot — a lot less than the ambitious billion-dollar claims of News Corp earlier this year.

Well-connected journalist Frederic Filloux wrote in his Monday Note newsletter this week that in a closely-watched deal the French publishers and Google have agreed to annual payments of about €50 million a year for the next three years.

Adjust to Australia’s population, translate to Australian dollars, and that would be about $35 million to be shared among publishers.

Not to be sneezed at.

It’s more than three times the now seemingly-annual payment of $10 million the federal government is paying Foxtel for broadcasting women’s sport. On the other hand, it’s about half the revenues News Corp’s Australian mastheads shed through the continuing advertising collapse in the three months to the end of September.

Filloux wrote both sides to the French deal are accepting it with a Gallic “could be worse” shrug. It seems in line with the US$1 billion Google floated in September to settle demands for compensation from publishers around the world.

More interesting is the deal’s structure — it looks forwards, not back.

Old media have been seeking compensation for what they see as past harm — the flight of advertising dollars to social media and search platforms, they believe, were built from news content the publishers employed people to create.

While there’s much to criticise about big tech, building a better advertising model doesn’t seem like its biggest sin. But the grieving over the loss of media’s 20th century business model is deeply — almost irrationally — felt across the media.

Google and Facebook have been more interested in something that looks like an ongoing business relationship than compensation for the past (more than made up, in their view, by the traffic that search and social media has sent to old media).

The French deal is in two parts. First, the publishers will share about €30 million (based on audience, journalists employed, quality) for Google publishing their stories in News Showcase, initially to be available on android phones, before rolling into iOS, Google Discover and Search.

Google said publishers could package the stories with their own look and feel (unlike, say, Apple News) “providing deeper storytelling and more context through features like timelines, bullets and related articles”. Video and audio will be available later.

For publishers (and their journalists) it’s a paid-for platform outside their paywall to distribute and promote their work. For Google, it’s another product to keep users within their information ecosystem. It seems similar to the Facebook News tab deal with News Corp announced with much fanfare (if limited follow-through) in November last year.

The second €20 million of the deal is expanding Subscribe with Google, which simplifies subscribing by populating fields from Google accounts and stored credit cards. Google takes a 5% cut and will pay the publishers for implementation costs and for money they would forgo through introductory discount offers.

As in Australia, the French publishers have been negotiating with the French government in their corner, prepared to legislate to force settlement.

Here, the platforms have brought in their big guns, both publicly with Facebook threatening to block news posts, and privately with Alphabet’s chief executive Sundar Pichai talking directly to Prime Minister Scott Morrison.

When the final draft code is released this month all parties will know the rules. The French agreement gives some idea of what the final score will be.