This paper is not alarmist. It is not sensational.
It is the perspective of small media entities in developing societies which, in some cases, have a disproportionate impact on news, sports and entertainment on the global stage, but which have very fragile eco-systems, very fragile economies and are susceptible to the ravages of climate change, which makes good copy, interesting reading, and high engagement among users all over the world. Think about reggae music, Bob Marley, Rihanna, Usain Bolt, Machel Montana, devastating hurricanes, shocking volcanic action and more and the impact of information from small societies, do have a disproportional impact on global discourse.
Much of this information is gathered, investigated, generated, published and broadcast by small media operators, most of them public service media, serving their communities on slender-to-no budgets at all.
The intention of this short paper, therefore, is to elucidate certain issues related to the activities of the Big Tech platforms (so called “Hyper-Scalers”) as they affect the news media and publishing industries in the Caribbean, and which we hope may be considered worthy of urgent attention.
The negative impact of global digital platforms on the practice of journalism has gained more and more focus in the past decade. The dominance and market power wielded by these global platforms have resulted in several ill-effects which threaten the viability/sustainability of regions like ours, especially our news media industry, and by extension, the practice of journalism. Our concerns fall in four broad categories:
(i) Diversion of advertising revenues from our media businesses
While media have greater audiences than ever before, and in the digital sphere, the Hyper Scalers and their affiliates and global programmatic Ad-Tech intermediaries now control more than 80% of Global digital advertising revenues. Even those regional media houses who have adopted their own branded digital platforms are only able to capture a small fraction (approximately 20 cents in the dollar) of the total revenue generated from advertisers on regional platforms (including revenue from local advertisers) because of the Hyper-Scalers’ control over and dominance of the digital advertising value chain. Consequently, advertising revenues which were previously used to finance local journalism have declined dramatically, leading to a reduction in the size of newsrooms and the standard and quality of local journalism.
(ii) Content created by the local news media industry is uncompensated
The Hyper Scalers also exploit content produced on local platforms to generate revenues from search advertising as well as via their news aggregation services, while refusing to compensate local publishers for the intellectual property inherent in such content, and which compensation might otherwise serve to offset the significant loss of revenues experienced by regional publishers over the last two decades. The result has been that especially local publishers’ declining print advertising revenues have not been offset to any appreciable extent by growth in digital advertising revenues. This net loss of revenue now threatens the very survival of newsrooms around the Caribbean and, if not urgently addressed, will inevitably lead to further reductions in the quantity and quality of local news and analysis available to the Caribbean public.
(iii) Loss of Government tax revenues in the region
Because of the multinational nature of the Hyper Scalers, and the fact that all transactions take place anonymously via the internet, they can avoid registration of their businesses with regional taxing authorities and thereby avoid both indirect taxation (e.g., Value Added – VAT/Consumption taxes) on the services sold in our jurisdictions, as well as corporate taxation on that portion of their profits which are generated in local jurisdictions. Governments thereby cede significant tax revenues to the developed market jurisdictions in which the Hyper Scalers are domiciled, while simultaneously placing the regional news media industry at a competitive cost disadvantage as they are obviously not able to avoid taxation expense in their home jurisdictions.
(iv) Liability for defamatory and libellous Content
Jurisdictions in the Caribbean have well-developed legal frameworks that impose liability on local media for any defamation which appears on their airwaves or in their publications. By contrast the Hyper Scalers have so far been able to sustain a position that avoids any such liability on the basis that they are simply curators of content created by others. This circumstance again places local and regional news media organisations at a significant competitive cost disadvantage in libel claim costs and insurance.
Regulatory Response in developed market jurisdictions
The issues described are not unique to the Caribbean, and several jurisdictions, alive to the existential threat posed by global platforms to their “fourth estates,” have initiated regulatory responses, examples of which appear below, and which are designed to correct these market failures.
- The renewed Declaration of Windhoek + 30, promoted by UNESCO, expresses concern about “the severe economic crisis that represents an existential threat to the media…” and states that “economic sustainability” is “a key prerequisite for their independence.” It calls on governments to “guarantee (…) funding from public sources to the media.” And asks digital companies to support journalism in various ways; for example, through “inclusive partnerships” agreements and “financial measures.”
- After years of research on the dominant position of global technology companies in the communications market, Australia passed a law on February 25, 2021, the “Code of Negotiation of Digital Media and Platforms,” which provides for compulsory arbitration mechanisms to ensure that these platforms – as essential utilities – pay media a fair price for the use they make of their content and from which they obtain direct and indirect benefits.
- The European Union approved in 2019 a directive that obliges platforms to compensate the use of “intellectual rights” of journalists.
- France, the Netherlands, Italy, Hungary and Germany have already adopted national laws to force digital platforms to negotiate within reasonable time frames.
- With the support of European media associations, the Commission and Parliament of the European Union are discussing a “Digital Markets Act” to prevent large digital platforms from abusing their market power.
- In the United States, the Information Media Alliance – News Media Alliance, representing almost 2,000 media outlets– is working on obtaining authorisation from Congress so that it will be possible to negotiate directly with the platforms.
Whither the Caribbean Community (CARICOM)?
The initiatives described, undertaken by countries around the world as well as by several supra-national representative institutions have required significant focus and resources application.
While regional governments might individually resolve to follow a similar course to Australia’s, any support from respected regional and international groupings would add weight to what we see as an especially just cause for small, indigenous, public service and quasi-commercial media acting in the best interest of their communities.
We invite your support!
RJRGLEANER Communications Group
This report was produced for the Public Media Alliance by the RJR Communications Group in response to concerns regarding the impact of so-called Big Tech and Hyper Scalers on journalism and media across The Caribbean region. The author of this article, Mr. Gary Allen OD JP, is the immediate Past President of the CBU having served as President from 2017 to 2021.