Grim picture for regional media as Meta withdrawal could accelerate contraction

Newsrooms are struggling to stay afloat amid multiple crises; a broken business model, increasing costs, the rapid rise of generative AI and the residual impacts of the pandemic, including significant further declines in advertising.

Last week's news that Meta is withdrawing from commercial deals with Australian news businesses again leaves public interest journalism vulnerable.

Meta's decision wasn't unexpected, there had been rumblings for some time. But it is yet another blow to the long term financial viability of Australia's news sector.

The Public Interest Journalism Initiative (PIJI) has tracked expansions and contractions in the Australian news market since 2019.

Each quarter we release a comprehensive report detailing the current state of the sector, including the number of news outlets across Australia, their location and changes in news production.

Our data reveals a net decline in Australia's public interest journalism landscape, including end of print runs and decreases in news services, and closures of outlets and newsrooms. Of the nearly 500 market changes recorded since our data collection started, 327 have been contractions.

News outlet openings are for the most part small digital operations and don't represent like-for-like replacement. The vast majority of the contractions - 61 per cent - have been felt in regional and remote areas of Australia.

Of Australia's local government areas with at least one news producer, more than a quarter have fewer outlets now than at the beginning of 2019, the data shows.

It's a grim picture. Meta's withdrawal could exacerbate or accelerate more contractions.

The commercial revenue from the tech giant was a welcome lifeline for news outlets whose traditional sources of income, classifieds and other advertising, have largely fled to the digital realm.

The withdrawal also comes as Australians' distrust in news increases slightly to 31 per cent, according to the Digital News Report: Australia 2023, higher than the global average of 28 per cent.

Australians continue to use social media to access the news. According to last year's Digital News Report, half of those who use Facebook say they use it for the news. WhatsApp and Instagram, both owned by Meta, as well as TikTok, also saw increases in news consumption via their platforms.

We also know from this report that 69 per cent of Australians are concerned about misinformation, a 5 per cent rise from the previous year that puts Australia among the most concerned countries in the world when it comes to misinformation.

Australians need credible, trusted news. Without a diversity of news to help inform decision-making, civic engagement is made incredibly difficult; the measure of the health of any democracy is in part based on the health of its news sector.

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It's clear that action is urgently needed for the sustainability of public interest media in this country. But it needs a two-speed approach.

PIJI welcomes recent federal government initiatives that look towards industry transformation, such as the News Media Assistance Program (currently under industry consultation) and the development of a media diversity measurement framework.

But immediate measures are also needed to safeguard Australian public interest news, to allow time for structural change.

PIJI has long advocated for taxation reform to support market transformation and the role of news as a public good.

A R&D-style tax rebate for public interest journalism would encourage long term, commercial investment in news production. Similar schemes have been used to positive effect in other industries such as IT innovation, film and TV.

Canada introduced a refundable tax credit in 2019 to support newsroom salaries, which has the potential to drive significant growth for its news industry when coupled with its new Online News Act (akin to our News Media Bargaining Code).

There is also potential for the development of a not-for-profit news market in Australia.

The draft report of the Productivity Commission's current inquiry into philanthropy recommends formal recognition of public interest journalism under charity and taxation law to provide tax deductibility.

The proposed reforms would bring Australia in line with other jurisdictions such as Canada, the US and the UK, and present clear opportunities to help diversify revenue, encourage more news production and benefit communities already experiencing an undersupply of news.

Australian public interest journalism needs emergency relief and long-term, structural reform to service our communities and the health of our democracy, now and in the future.