After years of cuts, contractions, and closures, Australian news businesses received millions in financial relief through commercial deals struck with Google and Meta in response to Australia’s News Media Bargaining Code. However, it hasn’t been a cure-all. The advertising market has cooled, and News Corp Australia plans to lay off hundreds of staff. In uncertain times, the continued rise in paying for online news provides a beacon of hope.

The past 12 months have been something of a rollercoaster ride for media in Australia. There was some early optimism with Nine Entertainment Co. and News Corp Australia both posting improved revenues in June 2022. A review of the News Media Bargaining Code¹ introduced in 2021 found that 30 commercial agreements had been secured between the major platforms and Australian news organisations. Several news organisations increased their staff, with Guardian Australia hiring 50 new journalists. But it is clear the benefits of the Code have been unevenly felt. Small and independent players in the industry, particularly in the regions, have struggled to negotiate deals with Meta and Google.² 

There are also concerns that, once the first round of agreements expire, Meta and Google may be reluctant to keep the money flowing.

Falling ad revenue has hit the platforms hard, with Meta announcing tens of thousands of redundancies globally. Many of those cuts have come from its Facebook Journalism Project and other journalism initiatives, suggesting a pivot away from news as part of its core interests. Google has dropped over 10,000 staff in the US, signalling it may be doing some belt-tightening in Australia as well.

News Corp chief executive Robert Thomson announced in March that rising interest rates and plummeting ad spending meant the company would need to lay off one in 20 of its staff globally. Given that News Corp operates more than half the Australian print market this could have an outsized effect on Australian journalism.

May 2022 saw a change in government. The incoming Labor administration has reversed cuts to the public Australian Broadcasting Corporation and moved it from a three-year to five-year funding cycle. It is also set to hand out $4 million in grants as part of a News Media Assistance Program, signalling intent to sustain and develop public interest journalism, particularly in the regions. However, piecemeal approaches do little to address the underlying market issues in Australia.

According to data from the Public Interest Journalism Initiative³ around 50 regional news outlets closed, merged, or reduced their services in 2022, most of these being newspapers. This was only partly offset by the opening of 26 new outlets and ten new ABC rural newsrooms. 

Consumers are continuing to drift away from traditional media such as TV, print, and radio, and towards streaming video-on-demand services, online news subscriptions, and social media. Major players such as Foxtel have been able to offset losses from their broadcast products with steady growth in subscription revenue from streaming services like Kayo and Binge. Nine Entertainment Co.’s streaming service Stan also controls a sizeable segment of the market now. Despite posting heavy losses, News Corp Australia reported more than 1 million subscribers to online news in 2022.

This year’s data show that the 5 percentage point increase in paying for online news we saw last year was not a fluke. The proportion paying has increased again, up to 22% from only 13% two years ago.  Holding on to those subscribers is the challenge. Trust in news in Australia remains at pre-pandemic levels, news avoidance continues to be high, and concern about online misinformation is rising.

The voluntary Code of Practice on Disinformation and Misinformation promises a framework to help organisations combat false and misleading information online. A review of the Code⁴ in late 2022 made significant changes, including changing the ‘harm’ threshold related to dis- and misinformation from ‘serious and imminent’ to ‘serious and credible’. But even with the Code, the government is set to grant the Australian Communications and Media Authority new powers to compel platforms to assist it. This may include an additional mandatory and enforceable industry code of conduct.

Trust may yet be the key to holding onto news subscribers, but in such unstable times organisations will need to move fast to capitalise on their gains in 2023. 

Kieran McGuinness
News and Media Research Centre, University of Canberra

Trust in news (43%) remains at pre-pandemic levels and Australia is still in the mid-range of the 46 countries for trust. Trust in brands has risen. While most mainstream brands recorded small increases, Guardian Australia increased by 6pp to 52%. Public broadcasters and regional/local newspapers continue as the most trusted sources of news. Tabloid metropolitan newspapers the least.

Footnotes