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News Corporation (NWSA) Inks Deal With Facebook in Australia

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News Corporation (NWSA - Free Report) has met with success yet again in its fight against tech giants over proper compensation for high-quality journalism content. In a landmark move, the renowned publishing company has reached a multi-year deal with Facebook, Inc. in Australia. Per the three-year agreement, News Corporation will receive payments in exchange for access to additional stories for Facebook News. This move allows millions of Facebook users in Australia to access trusted news reports through its Facebook News product. The deal builds upon an existing agreement between the companies in the United States, formed in October 2019.

Digging Deeper

The latest agreement includes News Corporation Australia as well as The Australian national newspaper and the news.com.au news site. It also involves few major metropolitan mastheads such as The Daily Telegraph in New South Wales, Herald Sun in Victoria and The Courier-Mail in Queensland alongside regional and community publications.

According to industry experts, News Corporation’s latest accord with Facebook forms a significant milestone in the long-drawn conflict in Australia between publishing companies and online platforms over the use and value of journalism. News Corporation has long been passionate regarding this cause. The company has been demanding online platforms to pay publishing companies for their output.

Well, News Corporation now has agreements with Facebook, Alphabet Inc.’s (GOOGL - Free Report) Google and Apple Inc. (AAPL - Free Report) whereby millions of readers and viewers around the world can gain access to journalism and related content. Markedly, Facebook has also entered into an agreement with Sky News Australia, building upon an existing arrangement between the companies. In fact Facebook has similar deals in place with publishing companies in several other markets as well.

News Corporation’s pact with Facebook and Google comes amid controversies in Australia, where the government has passed a regulation that would require technology companies to compensate publishing companies for news and other stories. In fact, last month, Facebook shut down thousands of pages in Australia when the law was proposed. The media giant ended the shutdown when the government agreed to change some terms of the new regulation.

Market sources highlight that the push by publishing companies to be paid by online platforms like Facebook and Google to host articles is justified as the latter have been unfairly profiting from the work of professional journalists. In fact, technology companies have been capturing a major chunk of online advertising revenues through articles which they obtain freely. Nevertheless, the latest deals between tech giants and publishing companies as well as the efforts of the government in Australia indicate that the tides in the media world are changing. In fact, these moves are likely to encourage several other publishing companies to be rightfully compensated by technology companies for sharing stories and other valuable journalism content.


 

From the perspective of News Corporation, deals with companies like Facebook and Google are likely to help the company rake in higher revenues for its digital content as well as increase online penetration. Moreover, the company expects the deals to have a positive impact on journalism at a global scale.

Markedly, shares of this Zacks Rank #2 (Buy) company have risen 47.5% over the past three months compared with the industry’s surge of 85.8%.

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