Second Major Australian Media Group Locks in Deal With Google

February 16, 2021 Updated: February 16, 2021

A second major commercial news outlet in Australia has struck a deal with Google in less than a week, as the tech giant moves to pre-empt an impending media payment law.

Nine Entertainment, which owns radio, newspaper, and television assets across the country, has signed a Letter of Intent with Google Australia to be paid a lump sum of $30 million per annum over five years, according to the Australian Financial Review, which is owned by Nine.

On Monday, Seven West Media signed a deal believed to be worth $30 million per year.

Deals are also expected with public broadcaster the ABC and commercial news outlet the Guardian.

Facebook Australia has yet to announce any deals.

The flurry of deals comes as the Australian government’s “world-leading” News Media Bargaining Code is expected to pass through Parliament in the next week, after it received bipartisan support from the Labor Party.

The Code will legislate a framework for eligible news media outlets in Australia to enter negotiations with Google and Facebook to pay for their content.

The framework also includes a final “baseball arbitration” clause if negotiations fail, where both parties submit their best offers, and an independent adjudicator will select the best one.

Initially, the tech giants resisted the new law and even threatened to remove news content from their feeds altogether. Google upped the ante saying it would consider removing their search engine service from the country.

However, in the last few weeks, Big Tech’s top management have engaged in a series of talks with the Australian prime minister and treasurer.

The Microsoft CEO and president even vowed to step in with its Bing search engine if Google were to pull out of the country.

Since then, the tone of the tech giants has changed.

In early February, Google rolled out its News Showcase as an alternative platform to compensate news outlets, signing up several smaller publishers including InDaily and Solstice Media.

Google and Facebook have been encouraged to strike deals outside the Code, but the Code will act as a safety net if agreements cannot be reached.

The process has been watched closely around the world, with Canadian authorities potentially considering emulating the law, which has so far yielded a more significant return for Australian media than the deal struck by French publishers just weeks earlier.

Over 121 French news outlets have also agreed to a three-year US$76 million deal with Google.

Despite the fanfare, experts do not expect Google and Facebook’s compensation to prop up the long-term decline of revenues for media companies.

“Nothing will replace the ‘rivers of gold’ or the classified ads … nothing’s going to fill that in the foreseeable future, but every little bit helps,” Denis Muller of the University of Melbourne’s Centre for Advancing Journalism previously told The Epoch Times.