Large media companies and organizations representing them are fighting over the small chunk of change the government got out of Google.
When Meta dropped news links, it not only signalled just how horribly wrong supporters were (who insisted it was all a big fancy “bluff”), but it also signalled a significant loss both in money and reach for publishers. The financial loss has long been estimated to $230 million. The devastating impact of the consequences of the Online News Act was felt across the sector, leading to loss in traffic, or worse, bankruptcies.
It all proved the axiom that publishers need platforms far more than platforms need publishers. The myth that platforms depended on news links was completely torched, and some publishers even began to admit that they might have made a horrible mistake in all of this.
For a time, thins were looking like they were going from bad to worse. Google was testing their news link blocking on their services as well. Like Meta, Google/Alphabet doesn’t depend on news links either. Unless the Canadian government offered a compelling reason to leave news links up, then they would also walk. It was pretty clear that if Google walked, then the damage hitting the media sector after Meta dropped news links would seem like small beans by comparison to Google leaving as well.
Stuck between a rock and a hard place, and the deadline imposed by the government looming and, ironically, working against the government, the Canadian government ended up folding to Google. The negotiations with individual publishers? Gone. Payments for links? No more. The whole point of a link tax in the first place? Obliterated. In exchange of following through with what Google originally proposed (a $100 million fund model), the bottom wouldn’t fall out for the entire Canadian news sector thanks to news links being dropped on Google’s services.
While some, desperate to call anything a “win”, tried to claim victory by ignoring almost everything that had happened throughout the debate and said that the $100 million fund model was a “victory”, the “win” was more like a salvage operation, trying to prevent the failure of the entire news sector. At best, you could argue that the entire news sector wasn’t going into the abyss overnight, but honestly, that’s a pretty hollow victory. The $230 million loss the sector got hit with thanks to Meta’s reasonable pullout left the entire sector badly damaged. Even the largest media company, the CBC, wasn’t immune to the loss of web traffic that they were experiencing.
In a bid to keep the larger media companies from failing, the Canadian government issued waves upon waves of bailout money in a bid to keep those companies whole (not that it did much to save jobs, mind you).
Of course, not everything about this debate is settled. One element in all of this is how to divvy up the Google salvage money. Yes, there’s a $100 million at stake. While it is not enough to make up for the losses hitting the sector, the fight now is which of the large media companies are entitled to that free money. Which freeloader is more entitled to that money? This is one of the debates that have become quite contentious according to The Hub:
Sources say that two proposals have emerged: a big media consortium led by News Media Canada (NMC), the Canadian Association of Broadcasters (CAB), and the CBC, pitted against a proposal spearheaded by a group of independent and digital publishers and broadcasters that is promising a more transparent and equitable governance approach.
While the law establishes many of the ground rules, there is considerable room for interpretation that effectively gives the collective enormous power. This includes addressing issues associated with who is eligible to be compensated, how much money they are entitled to, whether news outlets will be audited or regularly reviewed, and the mandate to address any disputes that may arise. Google has said it will judge the applications to become the collective based on four criteria: representation, governance, transparency, and the fees charged by the collective.
The big media collective, called the Online News Media Collective, is led by NMC, CAB, and the CBC, and supported by many newspaper associations and big broadcasters. It envisions a two-tier structure with the lead collective receiving funds from Google and distributing them to three distribution partners. The distribution partners would be the CBC (which receives 7 percent of the money), a news publishers group called the News Publishers Collective (which receives 63 percent), and a news broadcaster group called the News Broadcasters Collective (which receives the remaining 30 percent).
The News Publishers Collective is almost entirely controlled by legacy newspaper associations with only one of 11 board seats allocated to digital or new innovative media. The majority of the News Broadcasters Collective board comes from commercial television and radio broadcasters such as Bell and Rogers. The lead Online News Media Collective would be governed by a three-member board drawn from the three distribution partners with one position each for news publishers, news broadcasters, and the CBC.
The independent and digital media collective, a non-profit called the Canadian Journalism Collective, is led by a steering committee made up of a wide range of independent media outlets, including Press Forward (representing community publications), Dadan Sivunuvut and Indiginews (representing Indigenous media), The Resolve (representing BIPOC publications), Pivot (representing official language publications), CACTUS (representing nonprofit community broadcasters), Village Media, and Indiegraf.
The primary pitch for this collective is a far more representative and transparent approach. Its lead collective would have five board members (including two independent members), while the distribution partner boards feature representation for big, small, independent, Indigenous, and BIPOC board members. There is a role for larger players, but it is balanced with other perspectives.
There’s not a lot here that is a huge surprise. The large media companies were obviously going to throw the smaller media companies under the bus sooner or later. After all, throughout the then Bill C-18 debate, many of the larger players were doing what they could to pretend that Bill C-18 was about ensuring that smaller players have a seat at the negotiating table and can also negotiate a deal. These arguments were highly laughable as everyone knew they were just holding up smaller players as a prop to try and steal more revenue from the platforms. Some of the smaller outlets knew that the larger players weren’t acting in their best interest with one openly saying that they were worried that they were going to get left with crumbs afterwards. This as other players had the right idea and called for the legislation to be scrapped altogether before it caused untold amounts of damage to the sector (a prediction they were bang on correct about).
As a result, it’s no surprise that those same players who were pretending to help the smaller players are also calling for a two-tier system. The whole point, all along, was that the largest players get a lions share of whatever revenue that was supposed to come out of the Online News Act. This while the smaller players who need the money the most would benefit the least after. This likely under the argument that the larger players employ the most journalists, therefore, they should get the most money or whatever other nonsense they can come up with because some of them are just harmless monopolies struggling to make ends meet.
While this scenario was not really what the large players envisioned in this debate back when this was still a bill moving forward, it’s the situation they find themselves in now. They are fighting to get some of the leftover scraps that they thought they were going to get – leftover scraps that likely won’t make a huge dent in the overall funding that the media sector seemingly needs at the moment.
Call me cynical in this situation, but given how much power the large media companies wield, they’ll likely get a majority of the money. They have most, if not, all the cards here. The CRTC is made up of their buddies in the first place and if they say they get a majority of the money to pad their CEO’s bank accounts, they are going to get it. After all, they got every bailout in the book (so much for the argument that this was about ensuring taxpayers don’t have to fund their operations), so what makes this situation any different? Some smaller players might manage to get a few crumbs, but it’s unlikely that such funding will make a major difference in their operations over the long haul. If the larger players collectively get less than 50% of that revenue, I would be surprised, but I’m honestly not holding my breath over that.
