CEO steps up campaign against public broadcaster spending taxpayer dollars on Google and partnering with Netflix

The ABC is robbing commercial media of revenue by spending taxpayer dollars on Google and partnering with Netflix, the chief executive of Fairfax Media, Greg Hywood, has told parliament.

Hywood stepped up his campaign against the ABC using the search engine Google to promote its content and called on the government to take action against the national broadcaster “undercutting the competitiveness” of the Sydney Morning Herald and the Age.

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“The ABC has been aggressively moving into the commercial media space competing for audience ‘eyes’ without the need to meet a commercial return – a significant advantage,” Hywood said in answers to questions on notice put to him at the journalism inquiry.

“Additionally the ABC is now directing taxpayer funds to Netflix – a foreign-owned SVOD [streaming video on demand] operator instead of locally operated SVODs such as Stan – a joint Fairfax Media/Channel 9 operation.

“Fairfax believes the ABC oversteps the mark and, deliberately or no, undermines commercial companies’ ability to sustain quality journalism. There is clear evidence to sustain such a view. It is not – as the ABC contends – simply commercial media whingeing.”

Hywood gave evidence on day one of the Senate inquiry into public interest journalism this month and accused the ABC of stealing Fairfax traffic by “aggressively expanding” from television and radio into digital news and then paying Google to put ABC websites at the top of the search engine.

Last week at Senate estimates the managing director of the ABC, Michelle Guthrie, answered Hywood’s accusations, saying the ABC needed to increase audience awareness of its content. “Would you prefer us to have this great journalism and not tell our audience about it?,” Guthrie said.

“It seems to us that both the paid search and the social media marketing that we do are cost-effective ways of helping audiences locate content that is particularly hard to find or provides access to a depth of content that is appreciated by our audiences. Frankly, the amount of money that we are talking about is a very low proportion of our budget. I think about 0.2% of our budget is spent on total external marketing, and digital would be a portion of that.”

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Guthrie said she disagreed with Hywood’s claim that the ABC was undermining Fairfax’s business model. “I mean, we are not taking any advertising dollars out of the system at all. All we are doing is trying to attract audience to our content. It is not a zero-sum game.

“We are actually in the market for an audience, and the audience has a lot of choices, as you know, now. They can go to the New York Times; they can go to Fairfax; they can go to a lot of different sites.”

Hywood also urged the government to consider a tax write-off for people taking out subscriptions for both online and print media to help the local media companies compete with global giants such as Facebook and Google.

Fairfax Media also suggested Canberra consider making a “more level playing field” through the taxation system.