- No restrictions and no taxation give advantage to Facebook and Google, fintech CEO says
- While regional media outlets have to sell advertising simply to survive, mega-companies can afford to charge only rock-bottom rates
LONDON: The GCC must tackle the issue of global tech giants such as Facebook and Google making it impossible for media publishers in the Middle East to compete, according to an industry veteran.
While regional media outlets have to sell advertising simply to survive, mega-companies can afford to charge only rock-bottom rates, said analyst and publisher Julien Hawari, formerly joint CEO of Mediaquest and now CEO of Infak First Islamic FinTech Ecosystem.
The problem was not the rates charged for advertising but rather “dumping” in the region, he added.
“Global tech players have already covered their infrastructure costs in their home countries. At that point, any extra revenue becomes profit. Therefore they sell (advertising) in the region at the cheapest possible price (which) local players cannot compete with as they have to cover their own infrastructure costs.”
On a scale of one to 10, the costs to global firms would be “close to zero” and for local firms “closer to 10.”
Unlike publishers based in the Middle East, global companies were not constrained by local regulations or taxation and faced “no red lines or consequences,” Hawari told Arab News. “That policy by itself is pushing readers to global brands instead of staying with local media.”
The unfair advantage enjoyed by global tech companies “is adding insult to injury.”
Hawari first spoke out against the disparity between global and local media at the Top CEO conference in Jeddah last April, when he called for more government regulation and taxation on social media giants. This week he told Arab News “not much” had happened since then.
But the problem was ever more pressing.” “The GCC should address the issues and allow its local media to prosper instead of putting (in place) all those hurdles that will ultimately devastate the industry,” said Hawari.
Google said that it returns an average of 70 percent of income from digital advertising to its “publisher partners” worldwide and claims this helps to keep smaller publishers in business. In 2017, that “shared” advertising income amounted to $12.6 billion. However, the company offered no region-by-region breakdown.
Internet giants are invariably blamed for causing the slow demise of “traditional” news by taking content from publishers without paying for it and re-publishing it online. They also stand accused of disseminating inaccurate or “fake” news because they do not check facts and sources, and of giving prominence to more trivial, “clickbait” stories at the expense of serious news.
“Media organizations choose to post their own content themselves,” said Fares Akkad, Facebook’s head of media partnerships in the Middle East, Africa and Turkey. “It’s up to them how to place their content on Facebook and how they boost it.”
Both Google and Facebook have initiated training programs for journalists in Middle Eastern countries aimed at teaching them how to improve news gathering and production through the use of technology.
Facebook is investing $300 million over three years in grants to local news programs and content — “more on local than we ever spent before,” according to Akkad. However, data shared with Arab News shows that none of the money is going to the Middle East.
Google announced its training program for Ƶ, the UAE, Egypt, Lebanon, Jordan and Tunisia last May in partnership with the International Center for Journalists (ICFJ) and recruited trainers from both journalism and tech. The courses in data journalism, immersive storytelling, safety and security and verification began in December with the aim of training 4,000 journalists by the summer.
The Google Digital News Initiative was set up to “support quality journalism” and “empower” news organizations to use new technology such as artificial intelligence (AI).
A spokesperson for Google said: “Google has long been committed to helping local news publishers and media companies to grow, from driving traffic to publishers’ websites for free and paying the majority revenue share back to them, to committing to training journalists on digital tools.”
Facebook has also teamed up with the ICFJ to train 2,500 journalists from Ƶ, the UAE, Qatar, Jordan, Lebanon, Morocco and Tunisia in how to verify facts and online content, how to protect online information, how to use social media and “how to build a rapport with audiences and establish a loyal following.”
The first webinar is today.