Bill C-18 in the news

The Canadian government’s answer to displaced advertising revenue is to force Google and Facebook to give money to news organizations.

The actual cost to digital players has yet to be determined. Efforts are underway by Newsmedia Canada to establish a bargaining group to negotiate on behalf of news providers in Canada. Speculation within the industry suggests somewhere between 20 to 30% of reporter costs will be rebated.

Canada’s legislation mirrors a similar code in Australia where qualified news organizations ultimately shared in approximately $200 million of annual funding. The potential gross revenue for Canadian efforts is currently unknown.

Over the weekend major broadcasts reported that Meta (Facebook’s parent company) would be following in the steps of Google, which in recent weeks throttled back access to Canadian news outlets. It was a test they said, similar to one undertaken in Australia that failed to stop their government from passing legislation.

Most national news organizations of consequence in this country have signed deals already with Google and Facebook. Daily newspapers, corporate groups and online news sites with demonstrable website traffic are already cashing cheques from social media companies. 

Left to fend for themselves, smaller organizations, including this one, are waiting on Bill C-18 to pass so they too can access funds and level the playing field amongst publishers.

By nature of the job here, we have relationships with many politicians that allow for frank conversation. Speaking with local MPs as an example, there have been occasions to be quizzed about these bills and programs designed by the Heritage Department. Inevitably the discussion ends with a wish on our part that such programs were not even needed. But they are.

By chance, the convergence of this conversation follows an annual trek to an advertising conference last week. Previously held in New York and now Miami, it offers a chance to get in a room with broadcasters, radio companies and newspaper publishers to hear the latest data points. The relevance to this market is limited by the size of businesses we tend to serve but it does provide an eye-opener on trends.

As search engines and social media companies plunged into advertising, the effect on legacy media has been devastating for some. As online commenters are prone to do, legacy media which includes much more than just newspapers are discounted as old news, being replaced by all things digital. Digital behemoths just built a better mousetrap as the saying goes, but that is not exactly true.

As disruptors in a vastly unregulated field, these American multi-nationals were given a free pass under Section 230 in the U.S. Along with enshrining a bit of a wild west mentality with respect to libel laws online, there are few protections for consumer privacy being leveraged for profit. This is changing, but the damage has already been done to organizations reliant on advertising to perform their service.

By allowing these big companies to assemble treasure troves of personal data, advertisers have had the capacity to chase customers through highly targeted advertising. If these activities sound predatory that would be because they are.

As noted in the National Post recently, “a 2018 report from the Canadian Media Concentration Project revealed Google had snagged half the country’s internet advertising market share that year, with Facebook trailing at 27.3 per cent and Bell, Torstar, Twitter and Postmedia sitting at under 2% each.” 

Defenders and proponents of this model will see changes as governments, like those in Europe now addressing concerns, act to thwart this threat to privacy and security. 

For governments asleep at the switch when this all began, efforts to right the ship will not be easy. Eventually, most monopolies have their day.