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News media bargaining code: Should Indonesia follow?
If the government adopts a media bargaining regulation, it will likely benefit big news providers backed by conglomerates such as CT Corp, Media Group and MNC Group.
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The Australian government has mandated that media platforms such as Google and Facebook pay local news providers for displaying the providers’ content on their platforms. As is the case in other countries, Australian news organizations have been struggling to survive in the digital era because they have lost advertising profits while digital media platforms enjoy huge profits. (AFP/Olivier Douliery)
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he Australian government has mandated that media platforms such as Google and Facebook pay local news providers for displaying the providers’ content on their platforms. As is the case in other countries, Australian news organizations have been struggling to survive in the digital era because they have lost advertising profits while digital media platforms enjoy huge profits.
As pillars of democracy, local news providers play a crucial role in society. It is, therefore, important that journalism is free and independent. Research shows a significant relationship between the loss of journalism and a decline in public participation and trust in democracy. Because of the importance of news media, governments are willing to support their domestic news industries to prevent them from dying in the era of digitalization.
Digital platforms usually display the local news of a country without giving compensation to the news provider. In the viewpoint of the Australian government, there are imbalances in bargaining power between digital platforms and news media providers. In an effort to optimize domestic welfare, the Australian government has decided to require platforms like Google and Facebook to negotiate payment to local media organizations for access to their news content.
In the lead-up to the passage of the legislation, Facebook blocked Australian users from sharing or viewing news content on its platform. Google took a different tack by temporarily preventing local Australian news from being displayed on its platform in Australia.
On Nov. 26, the parties reached an agreement that large digital platforms would have to negotiate compensation with local news providers. The Australian government said the solution would be a lump-sum fee, the amount of which remains confidential. Google eventually signed an early agreement with the leading news providers in the country.
Should Indonesia follow suit? Before answering this question, it is important to first understand the actual problem. In digital advertising, the market share of local news media providers has declined sharply.
For example, in Australia, newspapers captured only 10.3 percent of the advertising market in 2018, while the internet took 42.6 percent. It is predicted that in 2023 the market share of newspapers will shrink to 4.2 percent and that of the internet will jump to 57.7 percent.
