News orgs 'clinging on by fingernails', in 'grave peril', MPs told

MPs have been told some news publishers are "clinging on by their fingernails" and that the media is in "grave peril", as a bill which could strong-arm the industry in striking deals with Google and Facebook moves through Parliament.

News bosses from the country's largest media companies painted an increasingly dire picture of their sector in front of MPs today, in a bid to keep legislation first drafted by the previous Labour government alive.

Modelled on laws brought in overseas, the Fair Digital News Bargaining Bill would create a binding arbitration process that digital platforms, like Google and Facebook, would be forced to use if they were unable to strike voluntary deals with news media companies.

Exemptions from the process would be available for platforms that make a "fair contribution to the sustainable production of news content".

Neither Facebook-owner Meta nor Google elected to appear in front of the select committee hearing today, but made written submissions opposing the legislation.

New Broadcasting Minister Melissa Lee opposed the bill whilst in opposition, but has appeared to warm towards the legislation in the past several months. However, she told media today she couldn't support the legislation in its current form without changes.

A prominent supporter of making tech giants pay has been the News Publishers Association (NPA) - the organisation representing newspaper proprietors.

Association chairperson Sinead Boucher told MPs: "Our members asked us to really emphasise the utter urgency of this legislation. They are clinging on by their fingernails.

"In some cases, they feel like they are really losing that battle in the near future."

Boucher, who is also owner of Stuff, was accompanied by the NPA's Andrew Holden.

He said time was of the essence for the legislation.

"The likes of Sinead, and every owner of any publishing business in this country is very honest with their staff. There's no pretence around the difficulties they're facing and the terrible decisions that they might have to make.

"They're well aware that this kind of bill - and particularly if it can be done at speed so that negotiations can occur in this calendar year - will make a significant difference to their futures."

Later speaking as Stuff's owner, Boucher said the industry was in "grave peril".

In the past year, the country's largest news publisher has significantly restructured its newsroom and begun paywalling stories.

"Even if someone never reads a single story that we or other news media here write - they benefit from the impact of good journalism and helping keep our country free of corruption and our societies healthy," Stuff's owner said.

"But our ability to continue to do this work is in grave peril. Journalism is in a fight for its life against the most powerful and profitable companies that have ever existed."

She added: "We have done nothing but adapt our business models for the last decade or more. We're sick of changing our business models." Boucher suggested that the advent of generative AI looked "increasingly like an extinction-level event" for news publications.

RNZ chief executive Paul Thompson said the bill would help "level the playing field" but that it was "not a silver bullet for our industry".

"We're looking for a level playing field, and it is not levelled at the moment. And it's one that allows us to enter into good faith negotiations and extract the value from those discussions," he said.

"This legislation is not a silver bullet for our industry. I think it's quite a modest, practical step that we can take as a country and we're going to have to do a whole lot of other things as a nation in the next 5-20 years to sustain our media."

He said news content brought attention to digital platforms, benefitting them, but that they "will not acknowledge that".

TVNZ executive editor Phil O'Sullivan said the bill spoke to a "real fight for survival" for the news industry.

"It's an expensive business to do this," he said.

"And when huge overseas companies like Google, $1.8 trillion companies are taking our content - it's simply not a level playing field. This is a real fight for survival for us."

He continued: "There is precedent overseas that Google and these big companies do see the value of news to the point of $100 million in Canada, $200 million in Australia, if legislation brings them to the table."

TVNZ, which publishes 1News.co.nz, submitted in support of the legislation's objectives.

Representatives of NZME, Newshub, Otago Daily Times-owner Allied Press, and the Ashburton Guardian also made oral submissions - all in support of the legislation.

In its current draft form, a company like Meta is considered to have made news content available, and subject to the process outlined in the bill, if it's reproduced by an online platform or when a platform has facilitated "access to the content by linking to it".

In support of the legislation, media organisations have argued that overseas tech giants have used locally produced news to enrich their websites without adequately compensating them.

Tech giants say the argument misrepresents the economic value of what news organisations produce. Similar bills have been passed in Australia and Canada, where Facebook has at-times pulled the plug on allowing the linking of news stories.

Victoria University communications lecturer Peter Thompson said the arbitration process proposed by the bill was "incredibly complicated".

The chairperson of the Better Public Media Trust said there was no guarantee that money from deals would be used to fund journalism instead of "shareholder dividends".

"We would strongly recommend that it be introduced with a limited periodicity which suggests maybe three years followed by a fully transparent review to ascertain just how well it's actually delivered on public interest news options," he told MPs.

"We're not against the aims of the bill. It's there for a good reason. We support the principles, but we don't think it's the right mechanism."

Meanwhile, in its written submission to the select committee, Google issued a veiled threat about its plans if the legislation came into force.

"If passed, the bill is so unworkable for Google that we would have to reassess the manner in which it operates in New Zealand," the tech giant wrote.

When asked whether she supported the bill today, Melissa Lee told media: "No, I don't."

The Broadcasting Minister continued: "I think there are a lot of things that are missing from it. I have always said, if the platforms are actually monetising from the use of news, they should pay for it."

"In terms of search functions, I don't think that's something people should have to pay for, nor if I'm sharing news on my Facebook page, whether Meta should pay for that. But there are other things happening where platforms are monetising."

She added: "The bill doesn't reflect AI and what it is doing. The select committee process will produce some answers … I will look at the bill after the select committee process to see whether it actually goes forward."