Elysha Young
Elysha manages the Asia Pacific Mintel Trends team made up of expert analysts and trend spotters. She currently oversees content for Mintel Trends as well as client servicing for the region.
February 22nd, 2021

Last week millions of Australians logged on to Facebook only to find the tech giant had made good on their threat and blocked publishers and users from sharing news in Australia. News publishers can no longer post their content, nor can Australian users share links to any Australian or international news sources. This comes after months of negotiation between the tech giants and the Australian government, who are looking to pass legislation that would require tech platforms to pay publishers for their content.

The proposed News Media Bargaining Code would require platforms like Facebook and Google to pay Australian news publishers for the content posted and shared on their platforms, including displaying links to content. Debate over the merits of the code has been heating up as the date for passing the legislation grows closer, with Google being the first to threaten that they would pull Search from Australia, effectively preventing Australians from ‘Googling’ things. While news publishers have come out in support of the legislation, the tech giants are arguing that the code fundamentally misunderstands the role of their platforms – and indeed how the internet works – while not factoring in the value their platforms provide to publishers by directing traffic to their pages.

What’s next?

In the short term, things can go one of two ways – Facebook backs down and brokers individual deals with news publishers the way Google is beginning to do, or news remains blocked on Facebook to Australian consumers. The former scenario will set a precedent that many governments around the world are itching to follow, given their wariness of the power of big tech companies. If the latter is to occur, however, Facebook will likely face an uphill battle retaining Australian users; dwell time will decrease as there is simply less content to engage with, and the content that is left – beyond user-generated content, communities and Marketplace – will likely not meet the standards of accuracy demanded of legitimate news publishers and further contribute towards making Facebook a platform of misinformation.

The timing for Facebook’s move is not ideal; Australia was just about to begin its COVID-19 vaccination roll-out, so it’s particularly important that the right information is getting through to consumers – especially as 21.7% of Australians said they probably or definitely would not get the vaccine in January 2021. In this context access to correct information is more important than ever, and so the effect on trust and consumer sentiment towards Facebook is likely to be negative. This is especially likely given the platform already has a reputation for misinformation and inflammatory rhetoric, and the initial ban far overshot news publishers to include community sites and government services like the Rural Fire Service.

For Australian consumers, media diversity will take a further hit as smaller publishers who relied on Facebook for the bulk of their traffic will struggle to operate, leaving only the big legacy outlets – most of which are owned by a handful of billionaires – and a further consolidated media industry. Fundamentally, the only real benefit of the News Media Bargaining Code to consumers is if the money paid to publishers goes towards funding public interest journalism; the legislation doesn’t specify what, if anything, this new revenue should be spent on, and so does not ensure that journalism will be better resourced in its current state.

What we think

For the moment at least, Australian consumers will need to seek out news from the source, ie. going directly to publishers’ own websites – something many consumers are no longer in the habit of doing. According to the University of Canberra’s 2020 Digital News Report, 39% of Australians use Facebook for news, and so this will force a shift in behaviour. It may force them to visit websites directly, and thus appreciate the value of trusted news sources over clickbait articles, or they may simply read less news. Mintel research shows that seven in 10 Australian consumers like to keep well-informed about the latest news/happenings in the world, so it’s likely they’ll look to sate their curiosity elsewhere. For brands looking to connect with them, understanding their target audience and diversifying their media channel mix will be more important than ever.

What would happen in Canada if Facebook blocked the news?

Canada is looking to follow Australia’s lead, requiring tech companies to pay for news that drives user engagement on their respective platforms. So, how would this tactic of removing news altogether on Facebook work in Canada?

Just one in 10 Canadians consider Facebook a trusted news source, yet more than a quarter regularly use the platform to get their news, according to Mintel research on staying informed in Canada. That disparity in trust vs usage comes down to one key factor: convenience. Consumers who get the news from Facebook want content to be brought where they already are. For that reason, if Facebook were to block news content in Canada, it is likely that those consumers would not make a significant effort to seek it out elsewhere.

Put simply, the main reason news organizations currently use Facebook is because they know they need to bring the content to where consumers already are. If consumers automatically flocked back to those news sites upon Facebook blocking content, it would mean Facebook was never necessary in the first place – which certainly isn’t true. Therefore, if Facebook were to block news content in Canada, a significant proportion of those consumers would either shift to similarly convenient platforms (eg other social media, news aggregators) or else just reduce their news consumption overall.

Scott Stewart is a Senior Analyst for Mintel’s Canada Technology and Media Reports.