Facebook and that news ban

On February 18 this year, Facebook decided to “ban” news content in Australia. This meant that Australian Facebook users (including media companies) could not post news content or links, nor could they access local or overseas news. The move was a preemptive strike (and a somewhat crude negotiation tactic) by Facebook in an attempt to circumvent the Media Bargaining Code, which requires social media and search engine platforms (specifically, Google and Facebook) to pay news providers for the use of their content. Despite the gnashing and wailing among some sectors of the Australian community, the world did not end. And while Facebook has somewhat relented (following some concessions from the Federal government), the story has generated some useful debate about the power of certain tech platforms and the degree of influence or control they exercise over what we see on our screens each day.

Image sourced from Wikimedia

Personally, I did not find the ban an inconvenience, because I rarely use my Facebook account, and I certainly don’t rely on it for news or information. Instead, I prefer to access content direct from providers. One result of the ban was more downloads for Australian news apps such as the ABC and Inkl. Another (unforeseen?) result was a block on information posted by public and voluntary sector bodies, including essential services, health, community and charitable organisations.

Regarding the former, this can only be a good thing. Seriously, if we are relying on Facebook for news content, THAT is the real problem. As for the latter, it suggests a lot of organisations have become over-reliant on Facebook to reach their audience.

Meanwhile, Google (which had already struck a deal with Australian media companies) was eagerly promoting the number of Australian “partner publications” it offers in its News Showcase. This was something of a U-turn, because Google had threatened to remove search in Australia in response to the same Media Bargaining Code. While that might have been drastic, nevertheless, other search engines are available.

It was also interesting to see Microsoft (no stranger to anti-trust action during the so-called browser wars) promoting BuzzFeed via Twitter on the day of the Facebook ban. I also received a number of e-mails from various organisations reminding me that I could still access their content direct from their website or via their newsletter. These moves to re-connect direct with audiences started to make Facebook look very silly and petulant.

Just as there are other search engines besides Google, other social media platforms are available – so why do so many people appear to be against the Media Bargaining Code, and would prefer to give Facebook a free monopoly over which content they read?

I have written previously about Facebook’s relationship with “news”. For those people who felt “cheated” that they couldn’t access news, they should realise that a “free” social media account comes with a price – the consumer is the product, and is only there to serve up eyeballs and profiles to be sold to Facebook’s advertisers. In short, Facebook only sees news as a magnet for its own advertisers, so it seems only fair that they should pay for this piggyback ride on someone else’s content. (And we all know what else Facebook does with our personal information, as the Cambridge Analytica scandal revealed.)

Some commentary suggested that Facebook is providing a type of “public service” by enabling links to news stories – so much so, that they question whether it is equitable to force Facebook to pay for the privilege, under the new Code. In fact, some argued that Facebook should be charging the media companies for linking to their stories, since this drives traffic to third-party news sites, which in turn generate advertising income based on their own readership. But this overlooks the reality of the economic bargain being struck here: Facebook might like to argue that it is doing you a “favour” by serving up news content in your personal feed; whereas, the social media giant “curates” what you see in your feed purely to generate ad revenue.

Alternatively, if news content has no value to Facebook, why has it been happy to distribute it for “free” all these years? Because, I repeat, they know full well that without readers and content, they can’t sell advertising. Maybe Facebook should invest in journalism and create their own news content? Oh wait, they don’t want to be regulated like a newspaper. Remember in 2013 when Facebook said it wanted to be “the world’s newspaper”, but then they realized they’d have to comply with media laws (libel, racial vilification etc.) and quietly dropped the plan?

In short, Facebook is not interested in being a news publisher (nor being subject to relevant media laws) but they are happy to “leverage” third-party content. Now, they will have to pay a fair price to use that content.

The conclusions from this Facebook episode (and some clumsy messaging from the Federal government) are pretty obvious:

  1. There is no such thing as a free lunch – a “free” social media account comes with a price; and there is also a cost attached to using someone else’s content
  2. Taxation of tech company revenues like Facebook, Google, Apple, Netflix and Amazon should be at the point of sale and consumption (i.e., where the consumer value is created and the income is generated, not where the revenue is recognised).
  3. Other search engines and social media platforms are available and content can be accessed direct from the source (but we’re probably too lazy to change our habits….)
  4. In part, this is about the continued demise of the 4th estate – no-one wants to pay for content, so social media platforms are getting a free ride having already destroyed the newspapers’ classified and display advertising business model
  5. But it’s also about the attention economy – consumers are the product when it comes to social media, so perhaps we should get paid more for our own time spent looking at ads?
  6. As ever, tech outstrips legislation – the law lags behind and is playing catch up
  7. And politicians really don’t have a clue how to go about this…..

Next week: Rebooting the local economy

Digital transactions hold the key for Australia Post

Last week’s news that Australia Post is shedding jobs made unwelcome reading for the 900 unfortunate employees who are affected, and the recent proposal to restructure (combined with the implicit risk to rural postal services) has generated some highly charged media commentary and prompted very passionate customer responses.

My personal view is that Australia Post will have to maintain a commitment to letter delivery as part of its protected monopoly obligations. But a “user pays” model that results in higher charges for a “premium” postal service may fail to offset losses from standard snail mail – because businesses will make greater use of existing document exchange and courier services, and retail customers will prefer to receive their utility bills and bank statements by e-mail or other digital solutions such as mobile apps.

Australia Post faces a dual challenge, quite apart from the decline in its letter business (which is rightly seen as a community service, albeit one that should be able to at least cover its costs). First, although it has diversified with a range of products and services, there is very little cohesion across its individual lines of business, and nearly all of them face strong competition, and/or rely on external service providers. Also, according to one software developer I spoke to several months ago, the sheer number of available services meant that some customer service staff did not have sufficient product knowledge and needed an in-house app to train them on how to up- and cross-sell these products.

Second, although it is trying to get into digital solutions, it seems late to the party (e.g., the MyPost Digital Mailbox, which has taken about 12 months from initial announcement to market launch). A few years ago, when I was working on a standard business identifier solution for the financial services industry, Australia Post was well placed to leverage its in-house knowledge of business customers (location, size, industry, spending patterns, logistics, etc.) and combine it with a unique entity ID to enhance and upgrade its business CRM database. However, it was unable to incorporate third-party data sources that would have resulted in even greater analytics on business customer behaviour, because the legacy data systems were unable to cooperate (and the teams that ran them unwilling to collaborate…).

Australia Post’s anticipated expansion into financial services hasn’t materialised (the current CEO is a former banker). If Australia Post became an Authorised Depository Institute, it could offer on-line banking services in its own right, giving it an alternative funding source (in addition to, or instead of, issuing corporate bonds that are implicitly guaranteed by the government). Or, in conjunction with relevant partners Australia Post could expand its Load&Go pre-paid VISA card to become a universal stored value card (such as Hong Kong’s Octopus system).

Instead, Australia Post is relying on the current boom in online shopping to drive revenue growth from its parcels and logistics operations. To me, this is a short-sighted strategy.

If digital is the key to future growth (especially for a data-rich business that operates in logistics, communications and payment transaction services), Australia Post should be looking to  provide and expand business and consumer solutions in the following areas:

  • Digital document verification, validation and transmission (to help offset the decline in snail mail)
  • Location-based payment solutions (to leverage its geographic and transactional knowledge of business customers, especially retailers)
  • Update the current post code system to provide more granular customer data to businesses and to streamline delivery and location services (e.g., like the UK’s system of house number and postcode – imagine how that would make life easier for taxi drivers!)
  • Develop off-the-shelf productivity tools for SMEs – such as on-line data forms, CRM, CMS, e-commerce (become the IKEA of small business data apps – rather like flat-pack, self-assembly furniture, many businesses might welcome such a service)

Finally, if Australia Post thinks that parcel services will carry them through, consider this: each time I want to send a parcel overseas, the counter staff have to undertake the following steps:

  • weigh the item
  • calculate the postage (using a cumbersome sequence of drop down menus on their terminal screen)
  • capture some ID information (such as my driver’s license)
  • attach the customs declaration form (which I have manually completed) to the parcel
  • print the postage label and attach it to the parcel
  • attach an “ID sighted” label to the parcel
  • attach an “Air Mail” sticker to the parcel

More steps are involved if I want use any sort of tracking, insurance or express delivery service. What if I could complete an address and customs form label, and print it before I leave home (or at a terminal at the post office)? And what if this label had scannable items, such as the destination address, for easier processing at the counter?