What once began as a promising partnership between tech giant Google and South African publisher Caxton CTP Publishers has now evolved into an unequal relationship, with both entities vying for the same content and revenue streams. This revelation surfaced during Caxton chairman Paul Jenkins’ testimony at the ongoing public hearings conducted by the Competition Commission, delving into the intricate dynamics of the media and digital platforms market in South Africa.
Jenkins articulated concerns about the asymmetrical nature of the relationship, highlighting how local news content, which serves as a cornerstone for digital platforms like Google, is often leveraged without adequate compensation for content providers. He likened the current scenario to being akin to “tenants or vassals” evicted from a platform that profits from their content without commensurate remuneration.
The proliferation of digital platforms, particularly Meta Platforms and Google, has posed existential challenges to traditional media outlets like Caxton, which have historically relied on revenue generated from news dissemination. Jenkins underscored the precarious state of the news industry, attributing the crisis not solely to the advent of technological advancements but primarily to the monopolistic dominance of digital platforms.
Amidst growing concerns over the sustainability of traditional media models, Jenkins lamented the disparity between the profitability of tech platforms and the dwindling returns for local digital programs. He emphasized the urgent need for regulatory intervention to rectify the imbalances and ensure a viable digital future for media stakeholders.
Contrary to Caxton’s assertions, Marianne Erasmus, Google’s News partner lead for sub-Saharan Africa, defended the company’s contributions to the local news ecosystem. Erasmus emphasized Google’s commitment to fostering sustainable partnerships with the news industry, advocating for collaborative efforts to nurture a diverse news ecosystem.
Erasmus cited Google’s modest ad revenue of R35 million (US$1.9 million) from its news product in 2022, juxtaposed with the significant referral traffic directed to local publishers, which she argued could be monetized through subscriptions and advertising.
Despite Caxton’s attempts to seek transparency from Google through inquiries, the tech giant maintained a guarded stance, citing confidentiality concerns regarding proprietary information. This opacity further fuelled apprehensions among media stakeholders regarding the lack of transparency surrounding Google and Meta’s operations.
The contentious relationship between digital platforms and traditional media has underscored the need for regulatory oversight and intervention to safeguard the interests of content providers and ensure the sustainability of the news industry. As stakeholders grapple with the ramifications of evolving digital landscapes, calls for regulatory scrutiny and collaborative frameworks have become increasingly pronounced in shaping the future of media dynamics in South Africa.
