Google said on Wednesday that it finally struck a multi-year deal with News Corp, Australia’s largest newspaper owner, to pay for its content.
Why it matters: The deal, along with several others signed between Google and Australian publishers in the past few days, is likely to allow the tech giant to bypass a comprehensive new Australian law that would have forced it and rival Facebook to pay publishers on terms defined by third parties if they were unable to reach agreements themselves.
Details: Google has agreed to pay News Corp an undisclosed amount for the content to be featured in a new product called Google News Showcase.
- Among the News Corp publications will be The Wall Street Journal, Barron’s, MarketWatch and the New York Post in the United States; The Times and The Sunday Times and The Sun in the United Kingdom; The Australian, news.com.au, Sky News and various metropolitan and local titles in Australia.
- The 3-year contract also includes the development of a subscription platform for News Corp’s vehicles, according to a statement, as well as the sharing of ad revenue through Google’s ad technology services, and “the cultivation of audio journalism and significant investments in innovative video journalism on YouTube. “
Last week, Google struck deals with several Australian publishers, including Nine Entertainment, Junkee Media and Seven West Media.
- Australian lawmakers said they would avoid passing the law if Google and Facebook reached a payment agreement with Australian news publishers on their own.
- The bill was taken to Parliament this week.
- If deals like this were not closed this week, approval would inevitably have happened in the next few days, although lawmakers have not said with certainty that the law is 100% out.
Be smart: The deal with News Corp. it was the last remaining deal with a publisher that Google needed to actually circumvent the proposed law.
- News Corp owns about 70% of the Australian newspaper business and is known to have a strong lobbying influence in Australia on this issue.
- “The deal simply wouldn’t have been possible without the fervent and unrestricted support of Rupert and Lachlan Murdoch and the News Corp Board,” said the CEO of News Corp. Robert Thomson in a statement. Thomson also thanks Australian lawmakers for staying strong “for their country and for journalism.”
The big picture: What is happening in Australia serves as a litmus test for other countries seeking to control the power of large technology companies globally.
- The law would have made Australia the first country to force Google and Facebook to pay news publishers for their content or be subject to heavy fines.
- Both Facebook and Google said they cannot run their businesses as usual if the law goes into effect and warn that if Australia approves it as expected, they will withdraw some of their services from the country.
- Other countries in Europe and even the United States are also considering measures to help balance the playing field between technology companies and legacy industries, such as newspapers.
These types of global threats forced the tech giants to create new resources that direct money to the media without having to completely reimagine their business.
- Google said last fall that it would pay publishers $ 1 billion for its content to appear on the Google News Showcase.
- Facebook spent millions of dollars paying publishers to be part of its Facebook News guide. Facebook News launched last week in the UK
Go deeper: Technology raises money for news as regulatory threats approach