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News Corp agrees global content deal with Google

(ATF) Rupert Murdoch’s News Corp struck a global news deal with Google, the media company said on Wednesday February 17, in the most extensive agreement yet for news content with big tech.

The two companies will develop a subscription platform, share advertising revenue through Google’s ad technology services, build audio journalism and develop video journalism by YouTube.

The deal comes after years of public feuding between Murdoch and Google, most recently in Australia, where Google has threatened to shut down its search engine to avoid “unworkable” content laws.

A global deal came earlier than expected, after signs that a push by the 89-year-old media mogul, his son Lachlan and News Corp chief executive Robert Thomson to seek compensation for premium content from Google was only progressing in Australia.

Murdoch previously secured payments from Apple and Facebook for their branded news products.

News Corp declined to provide financial details of the deal, which it said involved “significant payments” by Google.

In Australia, the country’s two largest free-to-air television broadcasters have struck deals with Google collectively worth A$60 million ($47 million) a year, according to media reports.

The Australian deals come days before the government plans to pass laws that would allow it to appoint an arbitrator to set Google’s content fees if it cannot strike a deal privately, a factor that government and media figures viewed as a turning point for negotiations which stalled a year earlier.

News Corp owns two-thirds of Australia’s major city and regional newspapers.

Microsoft, a potential beneficiary of Google leaving the Australian market, has publicly endorsed the proposed Australian law and recently urged the US government to copy it.

Deals in Europe, South America

The News Corp deal with Google also comes after the tech giant agreed to pay $76 million over three years to a group of 121 French news publishers to end a more than year-long copyright dispute.

Google has also moved to secure deals with publishers in the UK, Germany, Brazil and Argentina.

“The fact that Google was only brought to the table kicking and screaming due to significant antitrust reports and leading policymakers in Europe and Australia defending the importance of a strong, independent press for society only underscores the importance of [the Australian] Parliament’s new law and markets like the US waking up to their harms to democracy,” Jason Kint, chief executive of media industry trade association Digital Content Next, said.

The impact of News Corp’s deal with Google on the news publishing environment remains an open question.

In the United States, where smaller publishers in particular have lost ad revenue to the platforms, the news media trade group News Media Alliance is planning to reintroduce to Congress a bill that would allow publishers to collectively negotiate with Facebook and Google without violating antitrust laws.

“The big national publishers already have some leverage,” said David Chavern, president and chief executive of News Media Alliance, the news industry’s largest trade organization.

“How can a smaller publisher get a deal? Really only if there’s some collective action or system – otherwise you’re left with platforms getting to pick winners and losers,” he added.


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Jon Macaskill

Jon Macaskill has over 25 years experience covering financial markets from New York and London. He won the State Street press award for 'Best Editorial Comment' in 2016


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