Time for web giants
to “pay their fair share”

di Priscilla Pajdo del February 15, 2022

TORONTO - Traditionally, media outlets have relied on advertising as a main source of funding for years. They have increasingly moved to government subsidy models through which federal funding has become essential to their survival. But there is increasing pressure on the Federal Government to act on the issue of news media remuneration.

Earlier this month, Canada’s Heritage Minister Pablo Rodriguez presented Bill C-11, the Online Streaming Act, in the House of Commons. The proposed Bill aims to create more opportunities to showcase and support Canadian talent. It would also include measures that would require online broadcasters and platform giants to make financial contributions in support of Canadian creators and programming.

While the news industry continues to evolve, the Covid-19 pandemic has exacerbated the already challenging financial situation of media outlets. According to News Media Canada, in 2021, the Canada’s Newspaper Titles numbered 1,024. That total could have been more; however, between 2020 and 2021, 82 newspapers had ceased operations affecting thousands of jobs. Publications that could have n benefitted from advertising revenue.

For instance, newspaper ad revenue in 2019 totaled $1.4 Billion (B). One year later, that figure dropped to just $941 Million. With the technology shift to online platforms, internet ad media experienced a surge in revenue, jumping from $8.7 B in 2019 to $9.6 B in 2020.

Global internet giants like Google and Facebook represent more than 80% of the total ad market in Canada. It is expected that the Federal Government will soon unveil legislation that will address the issue of news media remuneration in the form of a news compensation bill.

The anticipation stems from the Ministerial Mandate Letter (December 2021) to Minister Rodriguez. The letter outlines directives for the Minister to introduce legislation asking web giants to “pay their fair share” for using Canadian media content on their platforms. This would seek to rein in the power of digital platforms and help strengthen Canadian media organizations that have lost millions in revenue to the US companies.

Other countries have started taking action to support their domestic media. For instance, Australia enacted legislation called the News Media and Digital Platforms Mandatory Bargaining Code on March 2, 2021.

The Australian Code is designed to address the bargaining power imbalances between digital platforms and the country’s news organizations. It also enables news agencies to negotiate individually or collectively with digital platforms like Google and Meta (the parent company of Facebook) fair payment for the inclusion of news content on the platforms and across their services.

When the news compensation bill surfaces in the Canadian House of Commons, the government has indicated that is should be “modeled on the Australian approach”. The Corriere asked Minister Rodriguez when Canadians can expect to hear details of the proposed legislation. A spokesperson for the Minister’s office said, “a date for the online news legislation has not been firmly scheduled due to the events in Ottawa”.

If a similar law, like that of Australia’s, passes in Canada, it could mean Canadian news publishers may start negotiating valuable deals with major digital platforms that use and display their content.

P. Pajdo is a Local Journalism Initiative Reporter

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