Seven West Media strikes partnership with Google that will see tech giant pay for news content
Seven West Media has struck a landmark agreement with Google that will see the tech giant pay for news content in its first significant deal globally with a major media company.
The Australian-listed company announced today it had entered into a Letter of Understanding to form a long-term partnership with Google, which includes providing news content to its Showcase product.
Kerry Stokes, chairman of Seven West Media, which publishes The West Australian as well as 19 regional papers and PerthNow, said the agreement was a great outcome for Seven West Media and Google.
“Our new partnership recognises the value, credibility and trust of our leading news brands and entertainment content across Seven and West Australian Newspapers,” he said.
The deal comes after a Senate Committee last week endorsed the Federal Government’s proposed media bargaining laws, which could force Google and Facebook to pay Australian media organisations for the news they use on their platforms.
The new laws, which have been pitched as a way to “safeguard public interest journalism”, will be among the first in the world to demand that multi-billion-dollar tech firms share revenue with news outlets.
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The laws, first drafted by the Australian Competition and Consumer Commission, will establish rules for negotiations between digital platforms and registered Australian news businesses over sharing revenue from the use of their content.
Federal Treasurer Josh Frydenberg said the motivation behind the new bargaining code was to encourage commercial deals to be struck.
“The main development we have seen with the Seven West Media and Google deal is that the parties can reach a mutually beneficial outcome,” he said.
“They have reached that outcome because the code is there and it is about to be brought into law. My discussions with (Facebook’s) Mark Zuckerberg and Sundar Pichai from Google have been very constructive.”
Mr Frydenberg said Google agreeing to a deal with Seven West Media was testament to their commitment to the Australian market.
“That has been a clear message in discussions with the Prime Minister, (Communications) Minister (Paul) Fletcher and myself, that he (Sundar) is committed to the Australian market. It’s an important market for them, it’s a profitable market for them and they want to remain here.”
Mr Stokes thanked Prime Minister Scott Morrison, the Chair of the Australian Competition and Consumer Commission, Rod Sims, and Mr Frydenberg, who he said had been instrumental in the outcome of the “ground-breaking” agreement.
He said the leadership shown by them in their push for the proposed News Media Bargaining Code meant Seven West Media could conclude negotiations that resulted in fair payment and ensure the company’s digital future.
“The negotiations with Google recognise the value of quality and original journalism throughout the country and, in particular, in regional areas,” Mr Stokes said.
He said he believed that Google was committed to the spirit of the proposed code.
Communications Minister Paul Fletcher said the purpose of the mandatory code was to address the bargaining power imbalance between digital platforms and news media businesses in order to support a diverse and sustainable Australian news media sector.
“The agreement announced today between Seven West Media and Google is evidence the code is having its intended effect,” he said.
“The code creates a framework for the parties to reach commercial arrangements, so that news media business are fairly remunerated for the content they generate and which digital platforms benefit from.
“The Government expects all parties to continue to work constructively towards reaching commercial agreements in the spirit of collaboration and good faith encouraged by the code.”
Mel Silva, managing director for Google Australia and New Zealand, said the partnership with Seven West Media meant the tech giant would make a substantial investment in the future of journalism not just across the metropolitan areas, but importantly in regional areas too where titles like the Kalgoorlie Miner and the Harvey-Waroona Reporter were at the heart of the local community.
“Seven West Media is one of Australia’s leading integrated media companies across broadcast, print and digital news and joins with 21 publications across a variety of titles as diverse as The West Australian, 7NEWS, PerthNow, the Albany Advertiser, the Geraldton Guardian and the Broome Advertiser,” she said.
Ms Silva said Showcase had been well received since it launched in Australia just over a week ago. She said Google’s publisher partners had received one million views of their content in just eight days.
James Warburton, chief executive of Seven West Media, said the deal was a “huge load of confidence” in terms of the credibility and the trust of Seven West Media’s brands, not just in metro markets but in regional areas.
“More importantly it really underpins those offerings, and Google has recognised that and fairly ruminated us on our spend and commitment to news,” he said.
“We have a good relationship with Google and had a proactive relationship and certainly a lot less animosity than other major media players, and we have been able to get that first mover advantage and negotiate a fantastic outcome that we are both happy with.”
Mr Warburton said reports that the deal included a clause that Google could rip up the contract if it wasn’t happy with the final details of the bargaining code were “complete rubbish”.
He also said Seven West Media remained committed to the new code being debated in Parliament.
“Every company has been negotiating with Google and Facebook … we have been able to get to a commercial point quicker,” Mr Warburton said.
“It’s up to them if they want to negotiate or arbitrate.”
The LOU is subject to executing a long form agreement in the next 30 days.
Seven West Media said it would advise more details once the long form agreement was finalised.
Labor’s shadow communications minister Michelle Rowland said the deal between Google and Seven West Media was positive but that more needed to be done to protect Australian media.
“Labor welcomes reports that commercial agreements are being signed between news media businesses and Google,” she told The West Australian.
“All along, Labor has said that Australian media companies must get a decent return for their investment in public interest journalism from digital platforms.
“However, as recommended by the ACCC, more needs to be done to support the media”.
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