News Corp (NASDAQ: NWSA) became the first media outlet to reach a content-supply deal in Australia with Facebook Inc (NASDAQ: FB). It attempted to resolve the latter’s brief blackout in protest against the country’s new content law, which sought an arbitrator as a last resort to finalize the payment terms, Reuters reports.
What Happened: Publishers have long alleged Facebook and Alphabet Inc’s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google of growing their share of the online advertising market by selling ads on their platforms along with free articles obtained from the media companies, Bloomberg notes.
The deal will enable Facebook’s 17 million Australian users to access premium news articles and breaking news videos from News Corp’s newsroom network.
Why It Matters: Facebook was in discussions with Australian publishers ahead of plans to launch its News tab in Australia. The company has similar deals with the U.S. and U.K. publishers in markets where the news tab already existed. News Corp inked a previous agreement with Facebook in the U.S. in October 2019, enabling its U.S. publications to receive payments for access to additional stories for Facebook News.
Last month, Facebook’s one-week blackout, including emergency services and government health pages, faced flak from global leaders. The shutdown was uplifted upon Australia’s partial relaxation regarding the new regulations.
News Corp, which owned about two-thirds of Australian metropolitan newspapers, along with other media companies, insisted that Facebook and Google pay for the media links that drove viewers and advertising dollars to their platforms.
Google also raised similar objections, including the launch of its paid News Showcase platform before signing deals with most media outlets, including News Corp. Google reached a three-year deal last month to pay News Corp for news.
News Corp’s subscription cable TV network Sky News inked a separate Facebook deal over undisclosed terms. Television broadcaster and newspaper publisher Seven West Media rival, Nine Entertainment Co Holdings Ltd (OTC: NNMTF), reportedly signed a letter of intent with Facebook.
Price action: NWSA stock closed lower by 0.38% at $26.11 on Monday.