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This is a report about power imbalances in digital media markets. It confirms that Google dominates New Zealand digital advertising. It also reveals that on average search engines and social media drive 53 percent of news websites’ traffic. Additionally, Facebook is the third largest news consumption platform in New Zealand (NERA Economic Consulting, 2016). It is clear that platforms and news companies are mutually dependent, but what makes this relationship problematic is that news companies are failing to monetise the traffic and attention they gain on platforms; this risks destroying their business model and raises questions about how content is to be funded.
In this context it would be wise for New Zealand authorities to at least examine how search engines and social media platforms shape digital media markets and the local journalism ecosystem, especially when platforms have not invested in any specific journalism projects in New Zealand. Before considering taxes, levies or forms of regulation for platforms, authorities should have a clear picture of the ‘platform problem’, and what measures may best support local journalism and media sustainability. As Fairfax Media (Australia) has warned (2018), regulation can have unintended consequences if not properly considered.
This report offers insight into relations between New Zealand media companies and Facebook and Google. These two are regarded as platforms because they enable intermediation between different user groups, such as Facebook users and news content providers.