Hi everyone, Michael here from economics explained, and if the name reveal wasn’t enough to
give it away, this will not be an ordinary episode.
It is however probably the most important video we have ever made.
Normally we work hard to shed light policies, theories, ideas, laws, and history from the
perspective of cold-hearted economists because that is often the most transparent way to
understand the true motivations behind any of these things
Times of crisis, like the dumpster fire that is 2020, serve as a great distraction for
the roll-out of policies that would under any normal circumstances not see the light
of day, for fear of criticism by the cold-hearted economist or any rational person for that
matter.
The News Media Bargaining Code is a proposed piece of legislation currently under review
by the Australian parliament, that would work effectively to abolish the level playing field
of the internet within the country.
Now for all of you watching that are not Australian, don’t breathe a sigh of relief, because
this will still impact you.
For reference and in the interest of full disclosure Economics Explained does have an
Australian Audience but it only makes up around 7 percent of our viewership.
So short term this would hurt us, but not very much.
Long term though the implications are devastating to everybody.
But this is still an Economics explained video so lets look at the economics of this issue.
News media from large organisations, like news corp, warner media, and walt disney telivision
is very important.
These organizations have the resources to put investigators onto stories all around
the world and report on events that we may have otherwise been unaware of.
Nobody is going to argue against the importance of the media.
But these large organizations are exactly that, large companies with huge overheads,
that cost a lot to run.
therefor as their viewers increasingly migrate away from television and to sites like youtube
they are no longer able to make as much revenue as they are used to, simply because there
is more competition for free content.
On Australian free to air television there are 5 primary news channels. On youtube, there
may be thousands of channels commenting on similar issues that are all equally free to
view.
This means advertising revenue is spread far thinner, and in a realistic future where more
people are watching Youtube than are watching TV this means this type of business model
would no longer by fiscally viable.
So what was their solution? Cut down on overheads? Move to a more decentralized business model?
Make more broadly appealing content?
No, it was to lobby the government into passing this law, which would give them back the oligopoly
they once enjoyed where your choices for new coverage was TV, Newspaper, or the crazy guy
on his soapbox.
The law would do this by mandating that registered media organizations would have key insights
into how googles back end systems work. EG what it is that makes youtube put a video
on their homepage vs what doesn’t.
This is unbelievably alarming because it would give them the keys to ensure that the only
thing a viewer will ever see is the content that they produce and that doesn’t necessarily
stop with the news.
It would be naive to think that these companies would be given the key to the algorithm and
not use it for every single bit of content that they produce, journalistic or otherwise.
The next part of the legislation would give these organizations exclusive access to specific
user data that they could use to determine trends, discern insights, and target specific
viewers.
Privacy concerns aside this would mean that viewers could be selectively targeted with
articles that are particularly agreeable to them, missing the opportunity to present arguments
that might help fill out a more well-informed opinion.
Australian media outlets don’t make too much of a secret out of the fact that they
are conservative. They are mostly owned by conservative public figures and their reporting
is pretty blatantly in support of Australia’s more conservative party.
Now this is fine, they are private companies and they are well within their rights to publish
whatever it is that they want so long as it is not intentionally misleading or false.
What is not fine is when there is no platform for alternative views to be heard, especially
if that is achieved by taking away a platform that was doing exactly this.
These organizations know youtube is not their home field packed to the brim with their supporters.
That’s why for almost all of their videos, comments are turned off and ratings are hidden.
Even still, they are more than welcome on the platform, they are just not welcome to
own the platform.
Finally, we would be reminisce if we didnt mention the money.
Currently, news organizations operating in Australia make about 10 million USD in revenue
every year. This is, of course, a lot of money.
It is actually an unbelievable amount of money considering most of these outlets get less
views, and have fewer subscribers than say economics explained for example.
Regardless of this, these organizations want to mandate that google and similar platforms
pay at least $600 million dollars per year towards them. Or put another way, pay them
60 times what their business relationship is currently worth.
It should go without saying that this is a dangerous precedent not only for fair media
coverage but more so for how we conduct business.
It is unfathomable that an organization can be mandated into handing over money simply
because the recipient is masquerading as a public service.
Now, this is why it is so important for everybody. Most of the media organizations we have discussed
are owned by international companies, if this can be rolled out in Australia, which is normally
a pretty politically savvy country, you better believe they will try to roll it out everywhere.
It would be incredibly foolish for them not to.
Unfortunately this has all been rolled out in the midst of one of the most difficult
years in our lives, so it has easily flown under the radar.
And even at the best of times this kind of story is not exactly going to make headlines
is it?
So it is up to us... we don’t individually wield as much political influence as these
companies but collectively we can make our voice heard. Find the link in the video description
and sign the petition to our change.org campaign.
Share this video, feel free to copy and repost it, retweet the link in the video description,
share your opinions and even feel free to disagree with me, but most importantly make
people aware of it.
We at economics explained are going to continue to forward this petition onto every member
of parliament and the senate, so the more signatures we get, the more weight our words
will hold.
We are also going to forward our concerns to the Australian competition and consumer
commission, which is supposedly Australias anti-competitive watchdog. A watchdog that
is evidently asleep at the wheel.
They specifically request to not reach out to their offices so naturally, we would encourage
you all to do so! Contact details are on screen now.
YouTube and google are not perfect, they are filled with people you might not agree with,
personalities that you may not like, and success stories you may not care for, but it is our
youtube.
everybody gets a chance to have their voice heard.
Of course some get and audience and some don't, but that's ok because everybody can have a
go and everybody has a chance...
If this bill was to pass it would no longer be our YouTube. Even the best, most talented,
most entertaining, or most enlightening individuals would not get the opportunity to rise to the
top and would instead be strategically buried under content from media organizations.
Now some of this big company content would be good, some of it would be bad, but it would
no longer be up to us to decide what is what..., if this bill passes it would not longer be
#OurYouTube