South Africa has just announced the most intriguing deal I’ve seen so far for tech platforms to support and collaborate with premium publishers.
Merry Xmas, I hope you are all enjoying time with family and the festive spirit wherever you are.
Now, we have seen news media deals come up over the years. Australia started it, followed by Canada, Europe, the UK, Denmark, and more all the time.
At first glance, South Africa’s looks the similar with multi-year million-dollar payments for publishers and broadcasters.
But then it deviates into a whole series of new directions, many of which I’ve not seen until now.
Firstly, Google has agreed to enable local users to adapt their search experiences to prioritise their preferred local news sources.
Google has also agreed to give publishers powers opt out of AI training and AI Overviews.
And Google, OpenAI, Meta and X will all be required under the new law to provide publishers with training how to do it.
More regulations have been passed that mean that any AI licensing marketplaces that emerge globally must offer the same opportunities and terms in South Africa.
And there are many more, which I detail below, but the most jarring change I saw came from Google itself.
Writing about the deal in its official blog, publishers’ on-off friend announced that supporting local media was “a shared responsibility” and urged other tech firms to follow its lead.
Will it work? Could this be the Christmas present we’ve been waiting all year for? I’ve got the regulators who did the deal on the pod to answer.
First, welcome this festive season to paid subs from Microsoft, Condé Nast, The Guardian, Australia’s Victorian Government and the University of Massachusetts, as well as new free sign ups from The Washington Post, AI automation outfit Cashmere, Google in Zurich, Atlassian in Sydney, UK subs platform AdvantageCS, SEO growth guys Rankibl, Australian tourism leader Scenic World, and financial-services leader Liberty in London, among others. We are 18k strong 💪 🏋️♂️ 🏋️ 🔥
And a shout out to my fave Substacks including Content Aware from my mates Richard Fairbairn and Rob Corbidge, former Meta exec Katie Harbath’s excellent Anchor Change, Jez Walters at What’s New in Publishing, and you obviously can’t beat Dominic Ponsford and the team at Press Gazette. Geniuses all h/t.
Let’s get into it…
South Africa has become the latest to make Big Tech platforms pay for the news they use.
I’ve spent few days analysing a 128-page deep regulatory ruling which includes many terms and agreements I’ve not seen before.
It’s built on the groundbreaking work done in Australia, Canada, the UK and Europe, but it includes some important and potentially precedent-setting new concessions.
And it all happens just as a host of new AI licensing deals are finally emerging, with Microsoft, OpenAI, Meta, Amazon, Google, Perplexity and ProRata now paying.
I won’t steal their thunder, but Digiday did a fun analysis asking eight publishers how each stacked up based on money, transparency, traffic and behaviour. It’s well worth a read.
But this post focuses on what South Africa’s regulators have managed to extract.
There are tens of millions in new payments, but also host of other agreements.
✅ Google has agreed to allow users to prioritise local news in their search results.
✅ It has signed on to deliver new levels on transparency on how it trains its AIs.
✅ Meta, Google, TikTok and YouTube are all stepping up publisher ad sales and support. Meta’s even opening an office to help publisher, and
✅ YouTube has agreed to digitise the entire archive of the national broadcaster.
But most interesting of all to me is that tech and regulators are both claiming it as a win.
Google wrote in its official blog: “Our plan includes introducing preferred sources in search, which lets users customise their experience in Top Stories to select and follow their favourite sites.”
So is this a global game changer? Has South Africa set a new bar for Big Tech deals to sustain premium publishing?
To find out, I have the two architects of the deal on the pod to explain what it means, how they did it, and how it will work in practice.
James Hodge is the chief economist of South Africa’s competition commission and chaired the inquiry, and Paula Fray was the inquiry’s media expert.
The Big Story: South Africa’s new media bargaining code
In May 2018, I was invited to Cape Town to present to media executives, but it was a set-up. I knew as soon as I saw the agenda. Google was scheduled to speak right after me. Game on I thought.
I have personal history in Africa. I lived in Nairobi and Mombasa as a young child - I spoke Swahili before I spoke English - and I’ve worked with the media and ad companies there for more than a decade. They knew what they were up to.
I presented in the sun-baked glass atrium on the roof of the country’s largest publisher Media24 with Table Mountain towering behind me.
Then it was Google’s turn. The speaker stumbled, then triggered the already tense publisher audience with a loose comment or two.
Next to me, Media24’s CEO had had enough. She whispered in my right ear: “Watch this.”
She stopped the Googler mid-speech, criticised her for failing to appreciate the media audience she was speaking to - and had her escorted from the building.
Many followers of this newsletter remember it well. One sidled up to me at the FIPP World Congress in Madrid last month to breathlessly reminisce about it. 🤯
Google had been pushing its frenemy relationship with publishers in Cape Town and Johannesburg to breaking point. That day - May 10, 2018 - was when it snapped.
Now, after a multi-year competition inquiry, South Africa has announced broad restrictions for platforms to compensate and empower those publishers.
It covers AI, ad transparency, data sharing, levels the playing field for small as well as big publishers, and is designed to protect South Africa’s language and cultural heritage.
Perhaps most impactful of all, Google, Meta, YouTube, Microsoft and TikTok have all signed up.
The only outlier is X, and already the commission has responded by imposing a requirement on it to offer all of its monetisation programmes or face prosecution.
On its face, the deal is tougher and more valuable for publishers than previous efforts.
Let’s break it down.
💰 Money
Google will pay US$40 million over five years to large and small publishers.
This is in addition to existing licensing deals, Discover and GNI deals.
The payouts are specifically ear-marked – reporters, beats, investigations etc.
Newsrooms are required to report back to regulators what it’s been spent on.
The fund is shared with smaller and indigenous-language publishers too, and
If the $40 million is found to be insufficient, regulators can demand more.
🎯 Advertising
The inquiry’s investigation found that Google, Meta, and TikTok systematically commoditised ads, driving down prices and suffocating publishers.
South Africa’s Mail & Guardian testified that it once “received millions for thousands of page views” and now “receives thousands for millions of views”.
The inquiry’s economists proved publisher CPMs fell 90 per cent with programmatic, from US$7 to 70¢ today.
And while publishers could sell direct ads for 10x that the price, they were so damaged they were now unable to do so at scale. I’ve covered this.
This was also disastrous for the South African economy. Between 2018 and 2023, the amount lost by publishers and broadcasters was 5x higher than the digital gains.
Let’s break that down. For every $5 lost in traditional ads, only $1 or less returned in digital income.
The inquiry found that Google, Meta, TikTok and X exploded supply to near infinite levels and then used programmatic to suppress ad prices to near free.
Canada is $7.5 billion-a-year the same way.
To remedy the broken market, the inquiry requires:
All platforms to provide new tech, staff and training to help publishers sell ads.
They will all be required share more data including CPMs, clients, and metrics.
Ad sales tools will be made available to all publishers, large and small alike.
There will also be training funded by the platforms to help publishers increase direct ad sales, subscriptions and memberships.
All platforms must prove training bootcamps on audience, data and monetisation, so publishers can compete on targeting, measurement and yield.
YouTube is required to allow every media company to join its partner programme.
That means YouTube monetisation will be available to all.
Media companies that sell their own ads on YouTube will keep 100 per cent of the revenue.
Meta will run 24 one-to-one publisher training sessions to fix ad ops issues.
Meta will also host quarterly training on reach, insights, and performance optimisation, and
TikTok must roll out all the monetisation programmes it offers globally in South Africa too.
✂️ Structural remedies
The inquiry found that platforms divided the market by offering sweetheart deals to some publishers while locking others out. The playing field will now be levelled.
All platforms are now required to make all their ad monetisation programmes available to all South African publishers alike.
If they launch something new elsewhere in the world, it must launch in South Africa too.
YouTube was found to selectively allow publishers into its partner programme. Now everyone is being allowed to join.
YouTube will also support the national broadcaster SABC with direct ad sales and digitise its archive.
Meta will open a three-person office to work with publishers on monetisation.
Many smaller publishers only publisher on Facebook, and were often banned from sharing in ad revenue as they failed to meet minimum follower thresholds.
Those are now being removed, and all publishers - large and small - will be given access to millions of Meta ad credits to begin their growth.
Microsoft has also been forced to extend its MSN news contracts and monetisation to five more publishers who had previously been blocked.
TikTok will roll out its entire publisher support suite to enable all publishers to integrate its monetisation and analytics tools, and
X (which originally said no) will now do so after being instructed to make its monetisation automatically available, and provide training.
🤖 AI licensing and training
When the inquiry began, generative AI was just a blip underway but the inquiry adapted to ensure it was included in its findings.
It found AI Overviews appeared on one in 10 search queries and 42 per cent of search users stayed on Google for the answer.
Only 12 per cent of users clicked through to the publisher. This cost publishers ~US$17.5 million-a-year, the inquiry found.
Maybe this rings a bell with readers of this newsletter?
However, the inquiry also found through its own investigations that news content was vital to enable AIs to answer topical searches and reduce hallucinations.
It dismissed Google’s claims that news made up an irrelevantly small number of searches, and revealed its own findings that it was closer to 30 per cent.
It also found that South African content accounted for less than one per cent of the data that AIs were being trained on, meaning its culture was in danger of being drowned out.
Rather than stop the training, it has demanded South African voices were used more often, but with a series of guardrails and commercial stipulations.
South African publishers must be given the same powers as other publishers to control how their content is used by AI.
This means that tough new regulations in the European Union, the UK and other jurisdictions will automatically apply.
The aim is now to shut down AI training, but to create the commercial conditions for a new mutually-beneficial AI marketplace to trade.
This akin to what I proposed in Airgap, what Cloudflare and Microsoft are now doing.
Under the new rules, OpenAI, Meta and X are all required to provide biannual training for all publishers (large and small) on their options and opt-out protocols.
Google must now train publishers how they can control their content’s usage with clear opt-out methods for both training and AI responses in search, and
Microsoft must provide annual training for all publishers on controls and opt-outs - plus it must extend its new publisher marketplace as well.
And if the market shifts, the new law includes a most favoured nations clause which requires that any as-yet-unknown compensation models must be offered too.
💬 Social
South Africa is a highly connected nation. Three in four of its population is online, and 98.8 per cent of them get news from social platforms, not publishers’ sites.
The inquiry called the social networks to appear before panels of experts, economists and publishers.
It found that Meta “deliberately deprecated news content, forcing news media to promote posts for reach”. It was pay or else.
The result was that many publishers had seen their referral traffic fall “80 to 90 per cent” since 2020.
South Africa is a majority mobile market, and less well off readers, and smaller publishers, rely almost entirely on social for news, information, reach and income.
The inquiry imposes a series of requirements on social platforms Meta, YouTube, X and TikTok to step up, and this is backed by a new social watchdog.
Meta:
It must “increase visibility and organic reach” for all publishers.
This includes three years of ad credits for newsrooms to boost posts.
Meta will pay for digital literacy programmes for adults and children, and
Commit to address hacked accounts, IP infringements and other issues.
YouTube:
Opens its partner programme to every local media organisation.
YouTube will onboard the national broadcaster SABC, and digitise its archive, and
All South Africa’s other other free-to-air broadcasters can to join too.
TikTok:
Is banned from treating South Africa as a test market - a key inquiry finding.
Instead, TikTok must give publisher biannual skills workshops in best practice, and
Fund a three-year digital literacy programme to teach adults and kids the value of premium publisher content on its platform.
🔍 Transparency
As a smaller country of 60 million people, South Africa has passed laws requiring groundbreaking work done in the EU and elsewhere to be shared.
The majority of the transparency relates to ads, and it leans heavily into the EU laws on visibility into who’s buying ads, at what CPMs, and who is clipping the ticket.
And when tech companies are found guilty of ad tech offences anywhere in the world (eg Google’s ad tech conviction) the remedies must be provided in South Africa too.
All platforms are now required to provide new levels of ad tech transparency.
Google will be required to follow EU measures to reveal their real ad costs. Google’s antitrust trial revealed these to be a “sky high” 36 per cent.
This includes officially sharing CPMs, both the sell-side and buy-side metrics it has in GAM, AdSense and AdMob.
Google must now report Declared Advertiser Domains in GAM, so publishers can see which advertisers are buying their impressions, not just the DSP.
Google is also required to stop self preferencing its owned and operated platforms and share its ad demand with open web publishers.
South Africa has adopted France’s requirement for Google to give publishers data on how auctions are run, and behavioural remedies from the EU ad tech investigation which bans Google from syphoning ads to YouTube and search.
If any structural or behavioural remedies are imposed on Google in the EU or US in future, they are automatically extended to South Africa.
Meta, Microsoft, TikTok and X are also forced to improve transparency and training and share actionable, usable data too.
Ultimately, the ability of South Africa to force Big Tech to play fair in ads is reliant on whether global authorities hold the line on their enforcement efforts.
A large part of that will be decided by the final remedies following Google’s ad tech monopoly conviction, which we will hear from a judge in the next few months.
🚔 Enforcement
The authors of this report insist that this isn’t a gentleman’s agreement that Big Tech can side-step. It’s a legal duty.
The final report hands the commission “a formal determination over global firms”. That means the inquiry can quickly return to court to seek Big Tech break-ups.
⚠️ Bias
The inquiry’s investigators also found that Google was biased toward foreign media.
Almost half of news queries from South Africans were redirected to foreign news brands.
But the inquiry went deeper.
It found that search links to foreign news brands like Bloomberg and Reddit were 60 per cent less likely to get a click than those referencing South African publishers.
The inquiry concluded that Google’s algorithm was silencing the brands people wanted. That worsened the user experience, harmed competition and excluded diversity.
Google was also found to support only the English, isiZulu and Afrikaans languages, with Xhosa planned.
That meant the country’s other eight official languages – all protected under its constitution - never appeared in search.
The final agreement was announced a few days ago. Hours later, Google went on the record in its official blog.
Helping the news industry adapt to the digital age is a shared responsibility.
It requires innovation from publishers, a broad-based approach from industry and government, and contributions from multiple platforms - not just Google.
We believe ensuring a vibrant future for South African journalism is a collective challenge.
While we are committed, long-term success will depend on broader industry cooperation, support from other digital platforms, and the ongoing agility of newsrooms to adapt to the evolving landscape.”
Collective. Shared. Not just Google. It wants the others to step up too.
And the timing is urgent.
South Africa’s paper of record, The Mail & Guardian - the one that testified “millions for thousands of views” were now “thousands for millions” is on the verge of collapse. All its staff have been issued notices that mean they could soon be redundant.
A publisher I know well, Arena, has cut its newsroom from 455 in 2017 to 260.
Another, The Daily Maverick, has cut staff 10 per cent.
The inquiry concluded that the platforms’ suffocation of the market had triggered two structural shifts - both well known to publishers worldwide.
A rise in casualisation through a reliance on freelancers who were typically paid per article, and
Juniorisation, where experienced journalists were replaced with cheaper newbies.
The commission flagged the loss of experience, networks and institutional memory as a danger to the media’s ability to uncover high-value stories.
And it highlighted how Arena published nearly 10,000 low-value articles a month to try to rise in search and social listings, while dropping public-interest reporting.
Local civic accountability fell as:
Regional bureaus closed.
Smaller cities and disadvantaged communities were no longer covered, and
Municipal corruption and service failures went unreported.
People told hearings that societal dysfunction was linked to the collapse of community media because when the local watchdogs disappeared, corruption grew.
Wow.
Siyabulela Makunga, the spokesperson for the competition commission, told The Cape Times.
The socio-economic gains of South Africa’s young democracy must at all costs be preserved, if not solidified.
To achieve this, South Africans must be unapologetic about protecting their freedoms as enshrined in the supreme law of the Republic, the Constitution.
One of these freedoms is the freedom of the press and other media.
News media is essential for democracy because it serves as the cornerstone of public accountability and informed citizens.
Yet, the global transition to digital platforms has severely undermined traditional revenue models and has eroded the financial positions of news media.
Google distorts competition because it over-represents global news media. Google has a monopoly. This inequity has materially contributed to the erosion of media.
YouTube, X, TikTok, and Meta’s Facebook preference sensational content. YouTube excludes most small independent and community media.
It undermines efforts to counter the negative impact of misinformation with credible news content, as credible news is surfaced less.
The unfair use of news media content to train and ground AI chatbots has had an adverse effect on competition.
Larger news providers have opted out of AI crawlers, most smaller media are not able to do so. This harms quality and diversity, along with the plurality of voices.
A healthy, independent, and diverse press is essential to democracy, and collective action, equitable regulation, and platform accountability are vital to safeguarding that principle for the digital future.
South Africa has 12 official languages: isiZulu, isiXhosa, Afrikaans, English, Sepedi, Sesotho, Setswana, Xitsonga, siSwati, Tshivenda, isiNdebele and South African Sign Language (SASL).
In them all I say: Wenze kahle, ngiyabonga. Wenze kakuhle, enkosi. Baie goed gedoen, baie dankie. Well done, thank you. O dirile gabotse, ke a leboga. O entse hantle, kea leboha. O dirile sentle, ke a leboga. U endle kahle, ndza khensa. Wenta kahle, esebente kahle, Ngiyabonga. No ita zwavhuḓi, ndo livhuwa. Uenze kuhle, ngiyabonga and…
And thank you to you for subscribing. Merry Xmas 🎄
