New Zealand’s news media, already diminished by a long slide into a dark ravine of cheap digital programmatic advertising, now faces a link boycott by Google.
The global digital platform has threatened to turn off news links, cutting off accompanying audience traffic, if New Zealand passes a law similar to Australia’s News Media Bargaining Code.
NZ’s Fair Digital News Bargaining Bill, introduced by the previous Labour government, would force Google and Meta, the owner of Facebook and Instagram, to pay for news.
The local market in New Zealand is an exaggeration of global trends, with the switch to digital advertising happened faster, leaving news media with thinner advertising flows.
The advertising market fell 7.3% in 2023 from a record high the year before, according to media agency bookings analysed by Standard Media Index (SMI).
Linear TV ad spend fell 19% in NZ last year and the local market there has had a frenzied love affair with digital, which is now 44% of all agency ad spend. And programmatic at 39% has the largest share of digital ad spend of all markets in which SMI reports.
In Australia, search is the biggest category in digital ad spend but in NZ programmatic is twice that of search.
Caroline Rainsford, Google New Zealand's country director, said the NZ bill proposes a "link tax" that would require Google to pay simply for linking to news articles.
“While Google supports efforts to foster a sustainable future for New Zealand news, this bill is not the right approach,” she said.
“We’ve been transparent with the government that if the bill were to proceed on its current trajectory and became law, we would be forced to make significant changes to our products and news investments.
“Specifically, we’d be forced to stop linking to news content on Google Search, Google News, or Discover surfaces in New Zealand and discontinue our current commercial agreements and ecosystem support with New Zealand news publishers.”
She said Link taxes are in conflict with the principles of the open web, and have not proven effective in supporting journalism, as seen in similar situations where other platforms have disengaged after deciding it’s no longer feasible to carry news links, including in Australia and Canada.
“Solutions that overwhelmingly benefit a small number of large operators at the expense of small and local language publishers are neither sustainable nor desirable outcomes for New Zealand,” she said.
NZ media and communications minister Paul Goldsmith said he was considering a range of views.
"We are still in the consultation phase and will make announcements in due course,” he said in a statement.
The bill aims at getting news publishers fairly compensated for the value of their news content.
In July, the minister told Radio New Zealand in July that about $30 million could be at stake around the Google agreement.
In Australia, competition watchdog the ACCC is currently preparing a brief for the federal government on whether Meta has a bargaining power advantage over news media companies.
The government could then us the News Media Bargaining Code, to force Meta to pay the media outlets for news content.
Meta, second in the league of digital advertising platforms in the world, in March this year said it wouldn't renew its agreements to pay local publishers for their news appearing on Facebook.
The publishers, with revenue vanishing, responded with newsrooms cuts and urged a ban on advertising on Facebook.
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