SYDNEY (AUSTRALIA)- Australia’s Seven West Media Ltd became the country’s first major news outlet to sign a licensing deal with Google. This move was taken, as the government pushes ahead with a law, prompting Google to pay media companies for content.
At an earnings announcement on Tuesday, Seven, which owns a free-to-air television network and the main metro newspaper in the city of Perth, said it would provide content for Google’s News Showcase platform. It did not disclose terms.
The deal shows Seven splitting from rivals News Corp and Nine Entertainment Co Holdings Ltd which was not able to reach agreements with Google. Instead, it supported laws, set to be passed this week, where the government clearly states Google’s content fees in the absence of a private deal.
So far in Australia, only specialist online publishers and one regional newspaper have agreed upon deals so as to get payment for their content appearing on the new platform in Google, which went live in the country this month.
Seven West Chairman Kerry Stokes in a statement, said, “The negotiations with Google recognise the value of quality and original journalism throughout the country and, in particular, in regional areas.”
Google’s Australia CEO Mel Silva said the US company was “proud to support original, trusted, and quality journalism” by featuring Seven on its platform.
Hours before Seven talked about its plans, Treasurer Josh Frydenberg told the Australian Broadcasting Corp he still planned to introduce the laws, but added: “I think we’re very close to some significant commercial deals and, in doing so, that will the transform the domestic media landscape”.
The way the law is worded, the government only enforces a negotiator to determine fees if the media company and Google is not able to come to an arrangement privately.
“The signs are that the Australian government and Google are close to a compromise,” said Paul Budde, an independent media and telecommunications industry analyst.
“This allows the government to claim victory, while the damage to Google will be limited. Publishers will in one way or another be paid for news.”
Seven separately witnessed a 26.5% jump in underlying profit for the six months to end-December, triggered by strong performance in its advertising market.
Seven shares jumped as much as 10.6%, which is the highest level since May 31, 2019 in early trade, while the broader market was up 0.9%.