Australian News Industry Undergoes Drastic, COVID-Induced Cost-Cutting and Change

The Nine logo is seen on the outside of their offices on July 26, 2018 in Melbourne, Australia. Scott Barbour/Getty Images

Australian consumers will need to adjust to new norms of paying for content, and bleak news media “deserts,” as COVID-19 devastates the media industry.

Since the onset of the pandemic and lockdowns, Australian media companies have carried out wave after wave of cuts and redundancies.

The industry was already reeling from a decade-long fall in advertising revenue to online competitors and tech giants Google and Facebook.

According to Treasurer Josh Frydenberg: “For every $100 spent by advertisers in Australia on online advertising … $47 goes to Google, $24 to Facebook and $29 to other participants.”

The logos of mobile apps, Facebook and Google on a tablet in Lille, France, on Oct. 1, 2019. Denis Charlet/AFP/Getty Images

Over the last month, the country’s three commercial television stations, CBS-owned Network Ten, Nine Entertainment, Seven Network, and public broadcaster the Australian Broadcasting Corporation, have cut staff and let go of high-profile personalities and news presenters.

In May, Rupert Murdoch’s News Corp announced a shake-up of its newspaper mastheads, axing 500 staff, and moving 100 newspaper publications to a digital-only format. Many of them based in regional areas.

Dr Denis Muller of the University of Melbourne’s Centre for Advancing Journalism told The Epoch Times on Aug. 24 that since 2012 over 3,000 journalists have lost their jobs.

“That was before COVID, what we’ve seen since COVID is a continuation or acceleration of that trend,” he said.

A newspaper headline about the coronavirus outbreak is seen on a near-deserted street in Sydney on March 30, 2020. Peter Parks/AFP via Getty Images

Editorial departments have been restructuring to cope with the loss of resources, with newsrooms consolidating their journalists and editors.

“The people who really missed out here are people from rural or regional areas,” Muller said.

Regional areas were already suffering, according to the Australian Competition and Consumer Commission (ACCC), who found that 106 local and regional news publications shut their doors between 2008 to 2018—leaving 16 regional areas without coverage by a single newspaper.

Dr Alex Wake, President of the Journalism Education and Research Association of Australia, told The Epoch Times on Aug. 25, that recent cuts to news organisations were “devastating” and many would not recover from the closures.

“In some places, this will lead to even larger news deserts, where communities have little or no access to objective and fact-checked news and information,” she said.

The mastheads of NewsCorp owned newspapers are displayed above a newsagents in Melbourne on July 15, 2011. William West/AFP via Getty Images

“These cuts are terrible for Australia, for communities and ultimately for democracy,” she added.

According to Muller, the “only realistic hope” for media companies was the federal government’s efforts to force Google and Facebook to compensate news media companies.

Treasurer Frydenberg unveiled a world-first mandatory code, or bargaining model, for media companies and the tech giants to enter negotiations to pay for content. Negotiations that break down can go to arbitration where a deal will be mandated.

The code also compels Google and Facebook to offer more transparency to media companies, including notifying them of changes to algorithms which could affect news rankings, traffic, and how advertising is displayed.

Google has thus far, pushed back in a public campaign arguing that users will suffer from “dramatically worse” services and potential loss of privacy. The ACCC denied these claims, calling them “misinformation.”

Treasurer Josh Frydenberg speaks in the House of Representatives on April 02, 2019, in Canberra, Australia. Tracey Nearmy/Getty Images

Even if the code is implemented, it is still unlikely to reverse the trajectory of news media companies.

“Nothing will replace the ‘rivers of gold’ or the classified ads … nothing’s going to fill that in the foreseeable future, but every little bit helps,” Muller said.

The ACCC revealed that classified advertising, the lifeblood of the newspaper industry, had fallen from $2 billion a year in 2001 to $200 million in 2016.

Muller says successful compensation to media companies will at least “send a signal to the wider community.”

“People have this idea that ever since social media started, this free news caper, there is such a thing as a free lunch. There is no such thing as a free lunch,” he said.

“If people want news, they are going to have to pay for it. I think this will be an important psychological turning point if the government and the local media can make it stick,” he noted.