Google and Facebook are taking most of the advertising revenue, which is naturally undermining Murdoch as the biggest player in conventional mass media.
The question is how much money are they making? They can transfer money around and avoid tax, but if how much they are making is opaque, they cannot even be taxed properly on turnover.
Australia is leading the world in wanting to tax google to pay for other media that produce content. Who will be the main beneficiary of this? Murdoch; of course. So actually the Australian government is doing Murdoch’s bidding. This is unlikely to be a coincidence. We are having an inquiry into Murdoch’s power on one hand, and passing special laws to give him money on the other.
The key problem is that the media funding model is broken. Years ago media proprietors were willing to keep editorial and advertising departments separate. No more. At first we found there were fewer stories about smoking caused disease in the women’s magazines that took the advertising. Then we noticed that Murdoch’s coverage of Indonesia and China were slanted when he was trying to buy satellites or networks. Naturally his companies were well reported in his newspapers, then there was cross-promotion of his other businesses. So as well as restricting content critical of advertisers things progressed to having stories slanted to be more exciting rather than more accurate or relevant.
Now, as social media eats away at conventional media advertising revenue they sack journalists to save money and delete or slant stories even more.
Simply funding good people to produce news is what has been done with the ABC on the BBC model, and this is what should happen. But the current government wants to manage the media and so want to de-fund the ABC.
So while I favour simply taxing google on its income and using the money to fund the ABC there are a number of problems with this. Who will or can make google disclose how much money it makes and where? An international cooperative of taxation departments empowered to send in IT-savvy forensic accountants? Can governments ever be trusted to fund public media adequately and then not interfere in what they report?