The deal follows a long-running battle between news providers and tech companies. Photo / Getty Images
The deal follows a long-running battle between news providers and tech companies. Photo / Getty Images
Rupert Murdoch's News Corp reached a landmark global deal with Google that it said would bring "significant payments" for its journalism, ending a long-running dispute that had been a focal point in the media industry's fight with big tech companies.
The breakthrough in the News Corp campaign came as Australia,the cradle of the Murdoch media empire, began debating laws on Wednesday that would force Google and Facebook to pay for news.
Google and Facebook have been rushing to complete deals with Australian publishers in an attempt to blunt the force of the bargaining code, which is inspiring other regulators in Europe, the UK and Canada.
However, the Google deal with News Corp announced on Wednesday goes beyond the Australian market, extending to Murdoch titles such as The Wall Street Journal and New York Post in the US and The Times and The Sun in the UK. No other news publisher has reached a single deal with Google across multiple countries.
In every attempt to take power away from the platforms, it only gives them more. Google has the power to decide which news organisations should get money, and which shouldn't
Jeff Jarvis, City University of New YorkRobert Thomson, News Corp's chief executive, said the effort to make platforms pay for using news content had been a "passionate cause" for the company for "well over a decade".
"I am gratified that the terms of trade are changing, not just for News Corp, but for every publisher," he said. "For many years, we were accused of tilting at tech windmills, but what was a solitary campaign, a quixotic quest, has become a movement, and both journalism and society will be enhanced."
Critics said the deal would mainly benefit News Corp rather than the rest of the news industry, since other publishers lacked the negotiating power that Murdoch enjoyed thanks to his extensive news operations in Australia.
The strength of Rupert Murdoch's media empire gave his company an advantage in negotiations. Photo / Getty Images
"In every attempt to take power away from the platforms, it only gives them more," said Jeff Jarvis, a journalism professor at City University of New York. "Google has the power to decide which news organisations should get money, and which shouldn't. It is the big old legacy players who have political clout who can cash it in."
The terms of the three-year deal cover licensing payments for content used on Google's News Showcase feature, the development of a subscription platform, the sharing of ad revenue via Google's ad technology services, and other audio and video projects.
Don Harrison, president of global partnerships at Google, said News Showcase now has deals with more than 500 publications around the world and the company hoped to "announce even more partnerships soon".
The size of News Corp's global deal was not disclosed. Thomson said earlier this month that an agreement with Google would "benefit our company's financial fortunes" and have a "material impact".
Google pledged last year to spend $1bn over three years on buying news content, and has reached agreements with publishers in about a dozen countries. But people involved in negotiations in Australia told the Financial Times the sums now under discussion were "multiple times" the size of agreements signed in other parts of the world.
The legislative passage of the bargaining code in Australia is being closely watched in Europe and the US for evidence that a tougher approach can reset the balance between publishers and tech platforms.
Among the code's features is an arbitration system that would make binding decisions on the fees that Facebook and Google would have to pay news providers if commercial negotiations fail.
It remains unclear how Google's rush of dealmaking in Australia will affect the bill and its implementation. As well as the deal with Murdoch's News Corp, Australia's biggest publisher, Google signed a letter of intent on Wednesday with Nine Entertainment, another large media group in the country.
Angela Mills Wade, executive director of the European Publishers Council, said the global News Corp deal "proves without doubt the value of news media content to Google".
However, she warned regulators in Australia and Europe to "not be misled into thinking that single big deals between Google and a few influential media companies — just before comprehensive laws come into effect — are the answer to the fair remuneration due to all publishers under the law".
"The government should continue with a full implementation of the code," she said.
