NZ Media: "A High Likelihood They Would Shut Down" Without Google

The Google Engine Series (Part 1). With the release of confidential emails, briefing papers and letters, The NZR charts Google/Government negotiations over a crucial media bill. Above quote 10.5. 2024

Lucinda Longcroft, formerly the Google New Zealand Government Affairs and Public Policy Director (Source: Google); Paul Goldsmith, Media and Communications Minister; and Caroline Rainsford, Google's Country Director (Source: Auckland University)

“We share policymakers’ concerns about the sustainability of journalism in New Zealand. That is why Google invested…to support New Zealand’s news industry and a sustainable landscape for journalism…Google launched News Showcase…and has now concluded 20 commercial partnerships representing 49 individual mastheads…[they] demonstrate that there is no relevant bargaining power imbalance between Google and news businesses, and no need to introduce legislation.”

From Google’s submission on the Fair Bargaining Digital News Bill.

“I want to make sure I’ve got senior ministers dealing with these issues. There’s a lot more complexity that’s emerged in those portfolios,” said Prime Minister, Christopher Luxon, during a press briefing in April 2024.

Luxon was trying to explain why he had sacked Media and Communications Minister Melissa Lee and Disability Issues Penny Simmonds.

Precisely why Lee was struggling in the job was a mystery but a key figure in the media industry would approach her replacement, Paul Goldsmith, a few days after the bloodletting:

Google.

“News media stakeholders have informed officials that without a News Showcase deal, there is a high likelihood they would shut down,” it reads.

Government briefing paper to Paul Goldsmith, the Minister for Media and Communications, the day prior to his first meeting with Google officials on 14 May 2024.

“…when confronted with unworkable legislation in other countries it has become unviable for Google to continue to invest in Google News Showcase in those countries.”

From Google’s submission.

And in the month to come, the proverbial elephant in the room would loom large on the government’s horizon over whether it should regulate a space that Google had to come to dominate:

The search engine market and the information and news ecosystem.

And as the bill (the Fair Digital News Bargaining bill) approached its second reading later in 2024, Google would bring the heat to the government and Goldsmith’s office, culminating in its delay and probable death.

Google’s First Letter to Goldsmith

On 26 April, Google’s former Director of Public Affairs and Public Policy for Australia and New Zealand, Lucinda Longcroft, and Country Director, Caroline Rainsford, congratulated Goldsmith on his appointment and asked to meet him. They also attached this letter-

On 8 May, officials provided Goldsmith with his first briefing. At this stage the bill was before the Economic Development, Science and Innovation Committee (EDSI). After hearing from submitters, it had made 24 recommendations to change the bill.

In Google’s submission, it completely rejected the bill. Broadly speaking, Google opposed it on four grounds (click on public submissions). The government’s legislative approach based partly on the core notion that Google is earning revenue from news providers.

“…Google does not earn or seek to earn meaningful revenue from news. Google Search’s New Zealand revenue (not profit) in 2020 from clicks on ads against possible news-seeking queries was around NZ$1.6 million. In 2020, news-seeking queries made up around 2% of total queries in Google Search in New Zealand”.

A subsequent article will delve into Google’s claims it doesn’t profit from news.

But Google reminded the government it had and was continuing to make significant investment into the New Zealand media.

This came in the form of the News Showcase deals (beginning in 2022) and Google news-related initiatives.

According to Google, it had now “concluded 20 commercial partnerships representing 49 individual mastheads across a comprehensive range of large, sall, regional, ethnic and digital native publisher, representing more than 95% of corresponding monthly web views in New Zealand” (Bold added by Google).

News media entering into News Showcase deals includes Stuff, NZME and Allied Press. Its continued reliance on Google will be covered in a subsequent article.

But Google did not see its relationship to New Zealand media as an “unequal bargaining relationship”. Rather it saw its contribution as essential and one that was-

“fundamental to the health of our society — and to well-functioning political, social, and economic institutions”.

In fact, it saw a strong media as core to its mission “to organise the world’s information and make it universally accessible and useful”.

Google’s growing influence through the News Showcase deals on local media was not lost on the government. It knew it.

In a briefing to Goldsmith on 10 May 2024, it also noted that the deals were not doing enough to shore up the media’s long-term future, writing-