Seven West Media signs multimillion-dollar deal to join Google's News Showcase

Seven West Media is the first large Australian media company to sign a multimillion-dollar agreement with Google for its content to be displayed in a new product called News Showcase, with Seven describing the deal as “fair payment”.

The Seven agreement won’t be sealed for a further 30 days and the company wouldn’t comment on reports it was worth more than $30m a year.

News Showcase is a feature on the Google News app that puts publishers’ content in panels, providing more information and content than is found in search results or snippets. The search giant said Australian Showcase partners had more than 1m views of their content in the first eight days of its operation.

Australia’s world-first mandatory media code was designed to force Google and Facebook to pay for displaying news content in search and on Facebook’s news feed. It’s understood Google may be willing to pay media companies similar amounts via Showcase licensing deals to avoid setting the precedent of paying for content displayed in search.

Under the possible compromise, the Australian treasurer would retain the ability to designate search as the service covered by the code in the future, if Google was not seen to be negotiating fairly with media companies.

The proposed media code was scheduled to be debated in federal parliament on Monday after a Senate committee endorsed the legislation. But it is yet to be listed.

Google had earlier signed up a raft of smaller publishers, including the Conversation and Crikey, to Showcase. Seven is the first major player to get on board.

Google said on Monday it remained in negotiations with other media companies including Nine Entertainment, News Corp Australia, Australian Community Media and Guardian Australia. Facebook declined to comment but it has reportedly been in “positive” talks with Nine.

Facebook has previously described the legislation as “removing all autonomy” for the social media platform. It has rejected the binding arbitration model which is central to the proposed code.

The federal treasurer, Josh Frydenberg, indicated talks between the tech giants and the media companies were going well and he had again spoken to the global head of Google, Sundar Pichai, and the Facebook founder, Mark Zuckerberg, at the weekend.

“They are very focused on what’s happening here in Australia but I sense they are also trying to reach deals, and that is welcome,” the treasurer told ABC radio on Monday.

“We have made great progress over the course of the weekend and I think we are very close to some very significant commercial deals. In doing so, that will transform the domestic media landscape.”

Seven West Media’s chairman, Kerry Stokes, said the letter of understanding with Google was “ground-breaking” and recognised the value of original journalism.

“Our new partnership recognises the value, credibility and trust of our leading news brands and entertainment content across Seven and West Australian Newspapers,” he said.

Stokes said the bargaining code had resulted in a “fair payment and ensured the company’s digital future”. “Google is to be congratulated for taking a leadership position in Australia and we believe their team is committed to the spirit of the proposed code,” he said.

A Seven spokesperson said Seven West Media remained “a strong supporter” of the news media bargaining code.

“We look forward to seeing it pass into law in the coming weeks,” they said. “Today’s announcement is a reflection of the value of Australian news media being recognised by digital platforms and it is made possible thanks to the Morrison government’s strong and continuing support of Australian news media.”

Nine Entertainment is talking to Google and Facebook but is focused on seeing the legislation passed as the “best way to secure a fair payment”, sources said.

A spokesman for the ABC said talks with the tech giants were ongoing. The legislation has the support of Labor and the Greens.

The managing director of Google Australia and New Zealand, Mel Silva, said the partnership with Seven, which publishes the West Australian and 7NEWS, among other platforms, is a “substantial investment in the future of journalism”.

“Showcase has been very well received since its launch in Australia a little over a week ago with our publisher partners receiving one million views of their content in just eight days,” Silva said.


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