Propaganda School Part 11: Revenge on the Nerds

There were some goings on in the Australian media landscape this week that I think are worth reflecting on in this series of posts as they shine a light on the dynamics involved in the modern propaganda apparatus.

I’ve spoken already in this series about the catastrophe that hit the mainstream media with the rise of the internet. Once upon a time, the media had a near monopoly on certain kinds of information. This included news and current affairs but also advertisements. If you were in the market for a house or a new car, you had to buy a newspaper to find out what was for sale. The media organisation got paid by the consumers buying the paper and also by advertisers paying for print space. It was a very profitable business that allowed powerful and financially independent companies to pay for professional journalists to go out and find the news. This is what was called The Fourth Estate. The media wielded significant power. Senior journalists were often household names. They would be the ones who would receive leaks of secret information or do some piece of investigative journalism that would see a government minister sacked or perhaps even topple a government.

That all changed when the internet came along. Newspapers in particular saw their revenues decimated. Real estate and car advertisement were taken over by online players and consumers turned to online news rather than the print edition of newspapers. Despite their best attempts to get people to pay, newspapers have never found a very profitable business model online. They limp along just a shadow of their former selves. As a result, there is no longer any money to pay for quality journalism anymore. All this is Economics 101. The internet allowed information to flow freely. Wen you increase the supply of something without a proportionate increase in the demand, the price goes down. The price of ‘news’ in the modern world is essentially 0. Why buy a newspaper or wait for the evening news when there’s probably a photo or a video online 5 minutes after the event?

Not only did legacy media see their revenues cut by the internet, they became increasingly reliant on the big tech players for both content and traffic. We have already seen in this series how social media content forms a large part of mainstream news articles these days. But mainstream news also gets a lot of referrals from social media sites. Sometimes, they even pay for those referrals. Take a quick look at Twitter’s ‘news feed’ and you’ll see it’s sponsored content. Users on twitter and facebook also share articles freely. Thus, legacy media became dependent on social media at the same time that social media (and the wider internet) destroyed its revenue base. A pretty tough pill to swallow, no doubt.

This is all old news, of course. It’s also old news that google, Facebook and other big tech players have monopolies which are not in the public interest especially when you consider their enormous power to decide what information people are exposed to. There’s also the matter of how much (or little) tax they pay tax to national governments. There is no shortage of public policy issues to tackle if governments are willing.

Again this backdrop, we saw the Australian Government announce a policy last year which supposedly touched on all these issues. The legislation that eventually passed required google and Facebook to pay (certain) legacy media companies for their content. It seemed on the face of it quite a ridiculous piece of legislation. Google put up a good public relations fight which included links on their search engine and youtube where the CEO of google Australia explained why they were against the legislation. Facebook simply said it would pull out of Australian news if the legislation was passed. As the date to enforce the legislation approached, google caved in and did a deal behind closed doors while Facebook did what it said it was going to do and pulled Australian news from its site. In doing so, it took out a number of other pages including Australian government departments and services. This all went down last week. The news made global headlines but it was in Australia where the squealing was loudest as both sides of government and media were unanimous in their condemnation of the move.

A lot could be said about what happened but I want to stick to the theme of this series of posts. What happened is that the Australian government passed legislation to offer protection to a local industry. Let’s put that in context. Over the last few decades, the Australian Government has let the clothing and shoe wear industry go broke, it has let much of Australian manufacturing go broke, it has let the car manufacturing industry go broke, it even seems set to allow all local oil refining capacity to disappear too. The Australian Government has shown a great willingness to embrace globalisation and free trade and yet it is prepared to prop up the media. Why? Well, one obvious reason is that the media and the government are in a symbiotic relationship. This is especially true now that the media has greatly reduced power to hold the government to account. Nowadays, the legacy media now functions as nothing much more than a public relations department for the government. They provide a valuable service for government and it’s therefore in the governments interest to ‘save’ the media. Government propping up an already moribund industry is going to make the media even less likely to be critical of government policy and to act as a proper Fourth Estate.

Ironically, Facebook’s action showed what it looks like when there is no symbiotic relationship between a corporation and a government. They simply told the government to go jump. For a few brief days it was a joy to watch as both government and media in Australia lost their collective shit over Mark Zuckerberg who had the impertinence to betray the fact that he couldn’t give a damn about the Australian media. And why should he? Isn’t the whole point of social media that you connect people with other people not with boring government departments or legacy media channels. Facebook clearly doesn’t care about Australian news and yet many Australians apparently get their news from Facebook. Maybe it would be better if they got their news from a service that does care. Facebook pulling out of Australian news probably would have been a net win to all concerned. Of course, Facebook caved in and came to a deal with the government which means they are back in the news business even though they clearly don’t want to be.

Where does this leave us? I would argue we are now worse off on all counts than we were before the Australian Government passed its legislation. The business model of the legacy media is still in tatters. They will continue operating but we won’t see a return to proper journalism and a proper Fourth Estate. Facebook and google’s monopolies haven’t changed. They will almost certainly find a way to write the new costs off on tax and will continue doing as they please. Worse than that, the new government legislation creates a barrier to entry to both new media players (who won’t get the generous google/facebook subsidy) and new tech players meaning their market dominance is less likely to be challenged. The only outcome here is to slightly increase the revenue for media businesses whose business model has already been superseded. Better to let them go broke and open up opportunities for new players to enter. But that won’t happen because the government needs the legacy media.

So, a bad outcome all round. But for a few glorious days we got to see what happens when government and a large corporate’s interests are not aligned. That’s a rare sight in the modern world where corporations are in bed with government to such an extent that disagreements barely even see the light of day. And we got to see what happens when the propaganda machine sets its sights on a single target and opens fire with all guns blazing (although I suppose the entire Trump presidency was the same dynamic).

All posts in this series:

4 thoughts on “Propaganda School Part 11: Revenge on the Nerds”

  1. Hi Simon,

    Here in Holland, we have two different subscription based news outlets that are quite good. (I pay for both, approx 10 USD/month for each. One is called “De Correspondent” and the other one is “Follow the Money”.) No advertisement. Unfortunately only available online. (We also subscribe to one national newspaper on paper. It is so much nicer to read from paper than from the screen.)

    One great advantage of paid subscription & login is that no comments are anonymous, and there are often very, very good discussions below the articles. People with knowledge contribute their perspectives. This allows for a better understanding of the topic than any other earlier news media has provided. The reader can choose, depending on interest, to read the abstract, the article or also the whole discussion below.

    Do you have any such news media in Australia (yet)?

    Since many people are happy to pay 10 USD per month for Spotify/Audible/Netflix/… I think there are lots of people who would also pay a similar amount for curated news and high quality investigative journalism.

    The traditional/legacy “News” media has more and more page filling opinion pieces and lifestyle reports, which I think is better suited for blogs.

    Have a good day!
    Goran

  2. Hi Goran,

    There are a couple of decent platforms in Australia that offer a paid service with moderated comments. I think you’re right in saying that these are better than the old-school papers in quality of content. However, in my opinion, what was so important about the old papers was their reach and their power. If a government was becoming corrupt, somebody inside could leak a story to a reporter and know that it would get mainstream attention. That doesn’t seem to happen anymore because the small niche services don’t have the power or the audience. For example, last year we had a blatant case of government corruption and one of the small news services I follow got the documents that proved the corruption. But nobody picked up the story. It wasn’t until a few months later that a high profile person broke the story in the media and the government was brought to account (sort of).

    So, it’s the decline in standards of the big name papers that I see as the real problem. I assume that would have happened in Holland also or is the mainstream press still of a decent standard there?

  3. Hi Simon,
    Thanks for the clarification.

    I don’t know how it was back in the day here in Holland, but during the last 20 years the journalism as a profession has shrunk in importance. Corporate Communication Officers have proliferated.
    Lots of papers have died.
    90% or so of the remaining papers are owned by three (Belgian!) families. In the news here, there is talk about media-oligarchs in e.g. Russia and Hungary, but strangely never as a term to describe the owners here… How come? 😉

    The only classic news channel that remains somewhat strong is the public broadcasting NPO/NOS. Unfortunately with advertisement…

    The niche outlets have broken a few good scoops, which are usually picked up by the other newspapers and broadcasting within a week. One example is the “Harry Keizer-scandal”, where the business dealings of the chairman of the largest political party were exposed and led to his removal.

    Both the two best online niche outlets have a very good functionality: The first 24 hours, the articles are available to read online also for non-members, if they get a link from a friend. Thereby, big scoops are immediately shared to a large audience, and people who are a bit slow to read have to pay to access. I think this is a clever timer-based-paywall system.

    On the positive note – there are more and more open-access scientific journals of high quality.

    Let’s keep news and verified facts flowing!

    Goran

  4. Hi Simon,

    The government also hit Facebook by threatening to pull millions in advertising spend. Who even knew they were spending millions with Facebook? And interestingly, some government websites were discovered to be on Facebook. Like are they doing this stuff so much on the cheap that they can’t run their own website? The question that pops up into my mind was best stated by the local hip-hop artist Briggs: ‘What if they’re all bad apples?’ It is a more complicated question than it first appears to be.

    I’m not on Facebook, but given how cancel culture is progressing and escalating I’d be very uncomfortable to get my news from their feed.

    Mate, over the past twelve months I’ve cancelled my subscription for The Age, and now simply skim the headlines so as to get a feel for the themes being presented. I can’t say that I feel comfortable with many of those themes, but that ain’t my circus – it’s theirs.

    Cheers

    Chris

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