The development of the internet has changed society in ways that no-one predicted. When it was created, the web was totally decentralised. On one of the World Wide Web’s first pages, Tim Berners-Lee declared there would be “no top to the web.” In its first major decision on regulation of internet content in 1997, the US Supreme Court predicted the web would turn each of us into a “town crier with a voice that resonates farther than it could from any soapbox.” And in his 1995 book, Being Digital, Nicholas Negroponte proclaimed that “the monolithic empires of mass media are dissolving into an array of cottage industries.” It would be a world where information is filtered and personalised with reports on companies you know and events you are familiar with. You could pay them a lot more if you get that subset of information called the Daily Me.
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At the same time however, the internet is having a massive impact on newspapers, in ways that no-one predicted back in the 90s.
The Nine network was punished by the market for its Fairfax acquisition. Nine peaked at $2.66 in mid-May, recording an 80% gain over the period. The day before the announcement of the Fairfax acquisition, Nine’s stock closed at $2.51. After the deal was announced the share price fell 6c. Over the rest of the year, the stock shed 51% of its value” However, the network slightly outperformed its peer Seven West Media which fell 10.57%. Prime and Southern Cross recorded drops of 23.2% and 14.5% respectively. Fairfax itself fell 17.5% for the year before it was delisted as part of the Nine acquisition in December, while Domain, which started the year badly with the abrupt departure of CEO Antony Catalano, saw its shares slump in October to finish the year with a 35% drop. Rival REA Group suffered a 3.5% fall.
People aren’t buying media stocks. No one wants to know about them, they are now seen as irrelevant.
And jobs in the media keep disappearing. According to a CEDA report, more than five million jobs, almost 40 per cent of Australian jobs that exist today, have a moderate to high likelihood of disappearing in the next 10 to 15 years due to technological advancements and innovations.
At the same time, the internet has created new monopolies which are reshaping democracy.
In 2018, Mark Zuckerberg appeared before the US Congress to apologise for not doing enough to stop fake news, foreign interference in elections, hate speech, and the unfortunate matter of a third party accessing the private data of eighty-seven million people.
And the monopolies are everywhere. Whether it’s Facebook in social media, Google in search, Amazon in online shopping, Ebay in online auctions or Netflix in online streaming. These powerful incumbents dominate market niches and competition takes place on anything but a level playing field. As the Australian Competition and Consumer Commission reported in December, every month “approximately nineteen million Australians use Google Search, seventeen million access Facebook, seventeen million watch YouTube (which is owned by Google) and eleven million access Instagram (which is owned by Facebook).” Around 94 per cent of online searches are made through Google, and the company enjoys corresponding market power in search advertising. Google and Facebook alone earn well over half of the $8 billion spent advertising online in Australia.
But the media is still powerful. For sure they’re losing revenues to Facebook and Google. But last year, the big highlight was the ousting of Malcolm Turnbull, as Prime Minister of Australia which was only made possible by a sustained campaign from the Murdoch tabloids, Sky News and the Australian. Reports soon emerged that Murdoch himself, after arriving in town eleven days earlier, had declared “Malcolm has got to go.” There were reports that the besieged prime minister had desperately phoned the mogul to plead his case. Former Australian PM Kevin Rudd put it bluntly in August describing Murdoch as “the greatest cancer on Australian democracy.”
And let’s not forget editor of the Sun, Tony Gallagher, tweeting moments after Britain voted to leave the European Union and following months of ceaseless campaigning by his and other British tabloids: “so much for the waning power of the print media.” Indeed, between Brexit and the Iraq war and the ousting of Malcolm Turnbull, we’re seeing more continuity than change, notwithstanding the surrounding disruption of the Internet.
We are entering an age of information inequality. The media, struggling with falling revenues, will charge for information and not everyone will pay for it. This means there will be some who will get quality information, while the rest will draw what they can from Facebook, Twitter, talk back radio and gossip. That will affect democracy.
We need subsidies for local news and investigative journalism. The Australian government has set up a $60 million Regional and Small Publishers’ Jobs and Innovation Package designed to help drive public interest journalism in the face of unprecedented changes in technology and industry. The package includes scholarships for university students and cadetships to be delivered by small and regional publishers.
That won’t be enough. Canada might be giving an example for the rest of the world with its recent announcement of a $600 million package of support for its media sector. Watch this space.