Analysis: Malaysian publishers voice their view on Google's possible exit from Australia

Google was recently thrust into the spotlight when it threatened to shut its search engine in Australia should the government continue with its plan to force big tech players to pay publishers for content. According to the Financial Times, Google Australia's MD Mel Silva said the laws were "unworkable" and "unreasonable", adding that it would have "no real choice" but to stop offering search in Australia should the code becomes law. This came after the Australian government drafted a legislation last July, stating that Google and Facebook will be fined "hundreds of millions of dollars" should they refuse to pay for news content and Google insisted that publishers benefit financially as its search engines sent about 3.44 billion visits to news sites "for free" in 2018, The Guardian reported. 

Just today, adding on to the list of woes that Google has been experiencing in Australia so far, the Australian Competition and Consumer Commission said in a press statement that the tech company's dominant role in the digital advertising market has to be addressed. The commission estimates that Google's share of revenue or ads traded in each of the required services in Australia ranges from 50% to 60% to between 90% to 100%, depending on the service.

On the other hand, things are less heated up in France where Google recently entered into an agreement with the Alliance de la Presse d'Information Générale, which represents French Media, to pay publishers for news content. This move culminates months of negotiations with French authorities and individual licence agreements with members of the Alliance will open access to News Showcase, a new press publications licensing programme, which will give readers access to rich content. The remuneration provided for in the licence agreements between each newspaper publisher and Google is based on criteria such as, for example, the contribution to political and general information, the daily volume of publications or the monthly Internet audience.

Australia and France are not the only countries to have pressured Google to pay for news. Last April, the Malaysian Newspaper Publishers Association (MNPA) wrote a letter to the Malaysia Competition Commission stating that there is an opportunity for Malaysia to pressure Google and Facebook to compensate publishers for news. Chairman Mustapha Kamil Mohd Janor, who is also CEO of New Straits Times Press, told A+M in a separate statement later on that more joint efforts should be explored so that both Google and publishers may reap full benefits within the news publishing industry. 

In response to the latest development in Australia and France, Google told A+M that in its current form, Australia's News Media Bargaining Code effectively forces Google to pay just to show links on Google Search, adding:

Paying for links and snippets undermines the basic principle of the internet - the ability to freely link between websites.

"Just like you don’t pay to include a hyperlink in an email, websites and search engines do not pay to provide links to third party websites. It would be like requiring the telephone directory to pay businesses to be able to include them," Google explained, saying that this set "an untenable precedent" for the digital economy.

It added that most businesses welcome the fact that people can find them on search results. If they do not, they can choose not to be found with just a few clicks. "Withdrawing our services from Australia is a worst case scenario and the last thing that we want to happen - it is not meant to be a threat," Google's spokesperson said.

In France, the company explained that its agreements are focused on paying publishers through Google News Showcase, as opposed to Australia where it would be asked to pay for every link and snippet on Google Search. According to Google, it has signed similar agreements with nearly 450 publications across a dozen countries and will expand to other markets in 2021. It is also proposing a similar arrangement to support the Australia journalism industry.

"We are committed to developing a better future for quality journalism together with publishers. While we are exploring to bring the News Showcase to more locations and build more features, we do not have a timeline to share yet with regards to Malaysia," the spokesperson told A+M. The Google News Showcase was launched last October with an investment of US$1 billion from Google and features the editorial curation of popular newsrooms to give readers more insight on important stories. Sundar Pichai, CEO of Google and Alphabet, said in a blog post previously that this initiative helps publishers develop deeper relationships with their audiences. News Showcase comprises story panels that will appear initially in Google News on Android. Competitor Facebook also recently launched Facebook News in Britain, paying publishers including Channel 4 News, Daily Mail Group, DC Thomson, Financial Times, Sky News and Telegraph Media Group, for their content, Channel NewsAsia reported.

Malaysian associations' take

Previously vocal about wanting big tech companies such as Google and Facebook to pay news publishers for content, an MNPA spokesperson told A+M that Google has for a significant amount of time been benefitting from articles produced by news organisations, "it is unbecoming of it to resort to threatening our Australian counterparts".

The association said Google must understand that news organisations have to hire professional journalists and in the current state of the advertising industry, "it is only fair for them to seek some of the advertising revenue generated by Google from articles generated by journalists".

Similarly, Star Media Group's COO Kang Yew Jin said there is strength in numbers and Malaysians must continue to band together behind MNPA to lobby the government. "Google agreeing to pay French publishers is a landmark victory for publishers. This ruling will pave the way for other countries to follow suit, seeing France is the first country that took the EU's new copyright laws and made it a national law. If other countries follow suit we will see many European countries being compensated by Google," he said.

Kang explained that French publishers were victorious because they relied heavily on the backing of the EU. However, there is no equivalent of the EU in Australia, hence getting Australia into the current standoff situation with Google. "Hopefully with the success of France, and subsequently the rest of the EU in future, this may open up the same opportunity for us APAC publishers," he said.

Agreeing with Kang on the point about strength in numbers, Yap Chee Weng, former president of the Malaysian Media Specialist Association and former head of media brands at dentsu Malaysia, said to sustain for the future, local publishers need to evolve in the way they operate and do business. 

"In my opinion, the current digital advertising ecosystem is not sustainable for local publishers. Google has already started the ball rolling by offering content partnership with local publishers in Germany, Brazil, Argentina, Canada, the UK, and Australia," he said. For him, a reasonable way to resolve this is for local publishers to come together to work out common agendas. In Malaysia, Yap said the MNPA is a good starting ground to fix the local digital advertising ecosystem.

"As of now, ad agencies will not be in a position to drive this as they are split between serving the advertisers, Google, and their own agendas. Once local publishers have ironed out their common agendas, then only can the government or the Malaysian Communication and Multimedia Commission start facilitating the fixing of Malaysia's digital ad ecosystem," he explained. 

Meanwhile, executive director and group CEO of Sin Chew Media Corporation Eugene Wong said there is no need to enter into "harsh negotiations" with Google at this point in time on the pay to use content model, or argue over revenue sharing from the display of content in search results. Instead, it would be more beneficial for publishers and Google to have an open discussion about profit and data sharing, in particular the topic of subscription via Google platform and tools.

Wong cited French newspaper Le Monde as an example, saying that Google supported a subsidised model with the company via a monthly trial subscription of about RM4.80, a subsidised version of the full subscription which costs about RM48.50. "This is a more ideal complimentary model to kick off the positive and healthy partnership between tech giants and media company," he added. 

He added that Google has also been taking a proactive approach to support local publishers in Malaysia by offering training under the Google News Initiatives. These include sharing ways to boost reader revenue be it via the Google News subscription platforms, Google News Initiative training modules or application-based labs. That said, Wong pointed out that Google has yet to discuss the News Showcase initiative with Malaysian publishers.

Malaysia's dependence on Google

It is a known fact that companies in Malaysia are heavily reliant on Google for advertising. Chanchal Chakrabarty, CEO of GroupM Malaysia and president of the Media Specialists Association, said that if Malaysia were to face a similar threat from Google, as Australia does, it is quite possible that other search platforms would seize the opportunity to fill the void. Currently, about 10% of the digital adex is allocated to Google Search, and this would quickly find its way to other platforms such as eCommerce places which is quickly picking up pace in the search space but is not sufficiently funded yet in the context of media investments.

"It would give an opportunity to super app aspirants such as Grab to come in and take the lion’s share of these searches, owing to the fact that many of the queries around location services, food, and retail are available on Grab," Chakrabarty added.

That said, large properties of Google such as Maps and YouTube get traffic from its search engine. Hence, Chakrabarty does not foresee Google ever closing its search engine in Australia (or even in Malaysia) because "it is the foundation upon which the entire platform of Google is built and therefore is a huge cost and trade-off for Google".

Based on this, Chakrabarty said there is no cause for concern locally as there has been no indication for such actions to be implemented locally. However, this does provide an opportunity for innovation and improvisation. Should this happen in Malaysia, the avenues for advertisers to move budgets away exist and those that would potentially witness more impact are small business owners, especially those in the F&B and retail scenes. 

For these small businesses, some alternative routes could be to build strong loyalty programmes, partnerships, and embark on their eCommerce journey if they have not already and explore cost efficient forms of advertising. These include localised DOOH, mobile marketing and leveraging Grab’s strengths around location services as a pre-emptive method of building their potential consumers.

"The outcome of this case has larger bearings on the likes of Google and Facebook as other countries and media outlets could get motivated to implement similar laws or policies. Irrespective of the outcome of the current development, it is absolutely imperative that the credit is given to the original creator of the content," he said.

Likewise, Ranga Somanathan, former CEO of Omnicom Media Group Malaysia and Singapore, said Google Search can be replaced by the likes of Microsoft Bing or Baidu should the former exit. While the UX might be poorer compared to Google's, consumers will move on and the ecosystem will improve over time. Another possible outcome could be a regulator could step in and mandate a full presence or complete exit of Google, which Somanathan said could create a different problem altogether. "Having said that, good sense will prevail amongst all stakeholders, while it might take some jostling from both sides before one reaches the saddle point," he added.

It is also important for publishers and marketers to look at diversifying their dependence from just one or two big players, not just in response to the evolving situation in Australia but as a business continuity principle. According to Somanathan, there are an abundance of solutions available for publishers to be part of a supply ecosystem and opportunities for marketers to start strengthening their advertising supply chain. The media agencies and marketing consultants should champion the curation of quality solutions that go beyond what is obvious, he said, adding:

The reality is that, for creating consumer value, both the platforms and the publishers need to collaborate. One without the other will make both the publisher and the platform irrelevant over time. 

"Publishers in many cases have not dug deep enough to streamline their cost of content creation. With legacy thinking and community commitments, they are still far from creating efficient cost structures to create content. Hiding under the guise of effectiveness, the ball has been dropped in driving efficiency," Somanthan explained. 

In the same breath, platforms have used technology "exceedingly well" to distribute content efficiently, with marginal effort to generate or support effective content. According to Somanthan, this has led to a parasite-like relationship between the platforms and publishers than being symbiotic. Regulators will have to play the referee and resolve the situation if the players cannot find the middle ground, he explained.

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