Facebook not confirming whether it will follow Google by friending NZ media

ANALYSIS: There are different views on whether Facebook and Google have any moral responsibility to help pay the media for news stories that are shared or discovered through their online services.
But principles aside, it seems a pragmatic solution to the industrys funding woes, given that one alternative may be having a fourth estate that is universally heavily dependent on government handouts.

So it is no wonder that Broadcasting Minister Kris Faafoi welcomed an announcement last week that Google plans to launch its Google News Showcase service in New Zealand later this year.

The announcement doesnt mean Google is accepting a general responsibility to pay for snippets of news that show up in its search results.

* Minister says planned launch of Google News Showcase in NZ is 'encouraging'
* Faafoi hopeful Google and Facebook will negotiate with NZ media
* Broadcasting Minister Kris Faafoi warns Facebook against using blocking tactics here

Rather, Google will pay some mainstream media organisations to provide it with curated news that it will display in panels in its Google News app, and later within its main internet search site.

The relationship is a commercial one, which keeps it clean and tidy.

Google is not revealing how much it is budgeting for licensing deals and has hinted some big numbers being thrown about in Australia for similar arrangements should be treated with a large pinch of salt.

Unconfirmed but possibly more reliable reports from France suggest Google has agreed to pay a total of US$22 million (NZ$31m) a year to a licence content from 121 French media organisations to feature in Google News Showcase.

That and Google News Showcases global budget of US$1b over three years suggests New Zealand media organisations could collectively expect to earn in the single-digit millions annually from the initiative.

Perhaps $4m or $5m might be about right, assuming the payment formula is traffic-based and noting New Zealands quite high media penetration.

Google says its Google News Showcase product is structured to drive traffic to media organisations own online services.

Google declined to comment on that guestimate.

That would be a material but not a business-changing sum for the two dominant producers of online news, Stuff and NZME, both of which have made full use of new technology to slash the cost of their operations over the past couple of decades.

It would reduce the chances of Australian-style government regulation if Facebook also now came to the party.

Facebook has a similar (though not identical) product to Google News Showcase, in Facebook News, and struck a deal with Australias News Corp earlier this month to licence content for a launch of that service in Australia.

Given the differences between the services, Facebook may need to offer more cash than Google to make its offers as attractive in their totality.

A Facebook spokeswoman says it doesnt have any plans to confirm at this time with regard to when Facebook News might launch in New Zealand.

But she noted Facebook did plan to expand the service internationally.

We have launched in the UK and Germany this year and are considering other countries.

In countries where we launch Facebook News, well pay news publishers to ensure their content is available in the new product, she said.

It would be surprising if Facebook didnt firm up a New Zealand launch date for Facebook News quite pronto, to capitalise on the momentum provided by Google towards a commercial solution to the media conundrum.

Media organisations will no doubt want the Government to keep the pressure up by coming across as a bit more driven to regulate than Faafoi has seemed to date.


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