For more than two decades, news publishers have watched as technology platforms have reshaped the economics of their industry. In a recent E&P Reports conversation, former Australian regulator Rod Sims argued that the fundamental problem is not technological change itself, but the way platforms inserted themselves between publishers and their audiences.
As Sims explained, the historic business model of journalism depended on the relationship between readers and advertisers. “News has always depended on people reading it and seeing ads. The ads paid for the journalism as well as a charge to buy the newspaper.” That relationship changed when technology platforms captured the audience’s attention and the revenue that came with it. According to Sims, “What’s happened is you’ve had platforms that have disintermediated the media companies from those who read the newspapers, and they have captured the eyes of people who want to read the papers.”
The result, he said, is that the economic value generated by journalism no longer flows primarily to the organizations that produce it. “They are the ones monetizing that, not the media,” Sims said of the platforms. “Media has been disconnected from its audience, and the platforms have unilaterally inserted themselves and taken the economic value.” That shift, he argues, represents a structural imbalance that market forces alone are unlikely to correct.
What Australia’s bargaining code demonstrated
Australia became the first country to attempt a systemic response to that imbalance through the News Media Bargaining Code, developed while Sims was chair of the Australian Competition and Consumer Commission. The policy forced dominant platforms to negotiate payment agreements with publishers whose journalism appeared on their services.
The results were immediate and significant. “It got through the parliament with all political parties strongly supporting it,” Sims said of the legislation’s passage. Once implemented, the code triggered substantial financial agreements between technology companies and news organizations. “What happened, and as you say, $250 million a year flowing to all media companies.”
One common criticism of bargaining codes is that they benefit large publishers at the expense of smaller ones. Sims rejects that narrative. “It’s just a falsehood spread by the platforms that the small players missed out,” he said. In fact, the distribution of funding often worked in favor of smaller publishers. “On some calculations, those small players, per journalist, got more money than the big players.”
The code’s success, Sims argued, stemmed from the unified stance of the country’s media organizations. “We had all the media on our side who wanted this to happen. We had all the politicians on side,” he said, describing the broad coalition that helped the law pass and function effectively.
When platforms push back
The bargaining code also exposed an unexpected weakness in the policy design. While Google ultimately negotiated deals, Meta’s Facebook platform responded differently. “The flaw eventually was that Facebook then said, well, we’ll take journalism off our platform,” Sims said. The decision forced policymakers to reconsider how bargaining frameworks should work when platforms can simply withdraw from the news ecosystem. “Which we had never thought they would do.”
Google, he noted, faced structural limits that Facebook did not. “You really can’t run a search engine without news. It just doesn’t happen,” Sims said. Facebook, by contrast, argued it could remove news without significant impact.
That development prompted new policy thinking in Australia. The government has since explored mechanisms requiring platforms to contribute financially, whether or not they carry news content. Sims summarized the new approach this way: “They’re not insisting you carry news. They’re just saying you’re going to pay whether you carry news or not.”
AI and the next stage of the conflict
While bargaining codes addressed search and social media platforms, the next challenge for publishers is emerging from artificial intelligence systems that ingest vast quantities of journalism to generate answers.
Sims believes the underlying dynamic is similar but potentially more disruptive. “In one way, it’s identical, but it’s worse,” he said. Like earlier platforms, AI services position themselves between news creators and audiences. “AI is another version of that, a much bigger version of that.”
Traditional search results typically sent users to publisher websites through links. AI-generated responses may not. “You used to get, well, here’s the story and here’s the link,” Sims explained. “With AI, you won’t get the link.”
That shift could further weaken the economic connection between journalism producers and the audiences who consume their work. As Sims noted, “AI is meant to tell you the answer, and where it comes from is hard to know.”
Why publishers must act collectively
Some news organizations have begun negotiating individual licensing deals with AI companies. Sims believes that strategy carries risks if pursued in isolation. When asked whether publishers should negotiate collectively rather than individually, his answer was direct. “One hundred percent yes.”
The Australian experience, he argues, demonstrated that collective action by publishers dramatically strengthened their negotiating position with dominant platforms. In the bargaining code system, companies that reached agreements with one publisher were required to negotiate with all eligible news organizations.
“What we required is that you had to do deals,” Sims explained. “And if you did a deal with one, you had to do a deal with everybody.” Arbitration mechanisms ensured that negotiations could not simply stall indefinitely. “If you can’t reach a deal, it goes to arbitration,” Sims said, noting that the threat of arbitration pushed platforms toward voluntary agreements.
For Sims, the role of government is not to control journalism but to correct market failures. “Markets only work if governments address the market failures,” he said, describing the structural imbalance created by dominant technology companies. “The government’s just playing its role of dealing with the market failure.”
The stakes for journalism and democracy
Beyond economics, Sims believes the debate over platform payments ultimately touches on the health of democratic societies. “If we don’t have journalism, we are missing one of the three or four crucial ingredients of protecting our democracy,” he said. The decline of local news organizations, often described in the United States as “news deserts,” highlights the broader consequences of collapsing business models.
Despite the scale of the challenge, Sims remains cautiously optimistic about the future of journalism. “I’m an optimist by nature,” he said. But he also believes the outcome will depend heavily on whether news organizations act together.
“The key thing for me is that the media businesses come together,” Sims said. Australia’s experience showed the power of a unified industry voice. “They came together. They spoke as one. They all said we want this law.”
That unity, he believes, was decisive in persuading policymakers to act. “The fact that they had everybody in the tent meant they got all the politicians onside.”
If publishers in other countries follow a similar path, Sims believes they could reshape the economics of journalism once again. “If they do that, they’ll win.”
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