The special coverage of the Bill C-18 senate hearing special is continuing. This covers the 2nd segment of hearing 7.
(Note: This hearing took place before Meta’s test of blocking news links and before it passed the senate)
Our special coverage of the Bill C-18 senate hearing special at the Communication and Transport (TRCM) senate committee is continuing. Things did get delayed for several reasons, but we wanted to finish these hearings anyway so that we have a complete set of what was said at this critical moment in time.
Before we get into this hearing, we wanted to showcase the previous hearings we covered to date.
Past Hearings Covered
Hearing 1 – Heritage Ministry officials / Lobbyists (1) / Konrad von Finckenstein
Hearing 2 – Missing/Not Available
Hearing 3 – Michael Geist / Peter Menzies / Lobbyists (2) / The CRTC
Hearing 4 – Alphabet / Google / Meta / Facebook
Hearing 5 – Lobbyists (3) / Lobbyists (4) / Western Standard
Hearing 6 – Lobbyists (5) / Lobbyists (6) / Dwayne Winseck
Lobbyists are continuing to hoard a lions share of the attention at these hearings. That, indeed, happened during the previous hearing where a whole panel of lobbyists spoke trying to push the legislation (and even give orders to senators in the process). While lobbyists have had many kicks at the can here, they seem to struggle to offer a clear cut reason why this bill is needed in the first place. Often, they gave conflicting statements, offered incomprehensible comments and observations, and leaned heavily on talking points while dodging many of the more serious questions in the process.
Well, we continue on to see what else we got out of these hearings.
So, as always, if you want to follow along with what we watched and heard, you can check out that video here. We will offer analysis and comments in brackets along the way as always. Otherwise, enjoy the continuation of this coverage!
Opening Statements
Jesse Brown of Canadaland started with his opening statement. He said that he knows that senators have heard a lot about the financial crisis faced by the traditional news publishers. He’s the publisher of an independent news organization called Canadaland. They are not in a state of financial crisis. They employ 20 people full time. They publish, now, in both official languages. They publish indigenous news as well. They do not have deals with Meta or Google. Like other digital news outlets, they have found a way to thrive online. There is a crisis in the news that does impact them. He thinks it does afflict every news organization in Canada. It’s one that he doesn’t think that we have been talking enough about. He’s talking about the crisis in trust. (Anecdotally, I’ve seen this too.)
There’s a growing body of evidence and research, Brown said, research from the Oxford University and the Reuters Institute for the study of journalism. There’s the proof strategies can trust index public opinion research from (Maroo?). All of these are attempts to look into the levels of trust Canadians have in traditional news. What they have all found is that that has never been lower. In fact, for the first time, a majority of Canadians say they do not trust the news. Over 70% of Canadians say that they actively avoid consuming the news and this problem is particularly bad with young Canadians (Personally, I think the reason why it’s particularly bad for young Canadians is because the news doesn’t even bother attempting to cater to them. More often then not, they are demonized for pretty much everything they do or don’t do). They are the most distrustful group towards the news.
This research, Brown continues, confirms what he thinks journalists see every day. Something terrible has happened with their relationship with the public who we try to inform and serve. They just don’t trust us. In fact, they are increasingly critical and angry towards us. They’ve even become abusive and hostile. Our response has been generally to try to correct them and tell them that they are wrong to distrust us. We scold them. We say that they are misinformed, perhaps they are paranoid, perhaps they have fallen prey to disinformation or conspiracy theory.
Brown said, but if we actually ask them why they distrust the news, which as journalists, he thinks we should be doing. We should be curious and ask questions, they will answer. Researchers at Oxford University ask them and 73% of Canadians said that they do not believe that the news is free from corporate influence. It was the top answer given as to why they do not trust the news. That is highly relevant for senators process on Bill C-18. Because, as you know, in anticipation under the threat of Bill C-18, two huge corporations, which themselves are highly problematic corporations when it comes to public trust, they started funding certain news organizations because this bill was coming. When Canadians ask how much money have they spent, have they given to the news that I read every day, and how do they determine which news organizations get the money and which ones don’t. Well, those Canadians are told that that’s a secret. Those answers are secret.
Once this bill becomes the law, Brown added, every qualified news organization will be in a position to enter in to their own secret deal with Facebook and Google. That secrecy is poisonous to trust. Canadaland has joined over 100 other news publishers, digital independents, and we are a coalition that has proposed to senators a solution to this crisis in trust (Full transparency, Freezenet did sign with this and is one of these publishers). Because what good is it to sustain news information when nobody trusts it? They sent senators a few amendments, proposed amendments, one of which is a transparency mechanism that would give Canadian’s this missing information. This secret information.
If the news, Brown explained, is to be funded by tech platforms in part, then at bare minimum, Canadians must be given information about who is getting that money and how much each news organization is getting and why. Our proposed amendment would standardize the funding for all qualifying news organizations. Everyone would get the same amount relative to the size of their editorial expenditures. Not payroll editorial expenditures. That means that we would simply tell the public how much each of the news organizations are getting, and we could assure them that we do not have to care about whether Facebook or Google like our coverage of them. We’re entering into secret deals with Facebook or Google. It’s a reasonable question for the public to say, does that affect your coverage of them? Will you stop criticizing them if you need their money while trying to get the best deal possible?
This amendment, Brown added, would relieve them of having to care what they think because everybody would get the same based on a universal fair formula. He thinks that would to a tremendous amount of good in terms of restoring the trust and preserving the independence of Canada’s media. It would also mean that Google and Facebook could no longer pick winners and losers by giving some organizations far better deals than others.
He’s spoken to a member of this committee, Brown noted, Senator Simons, and she suggested to Brown that this amendment is a non starter because the position that the government has taken is that this lack of transparency is a feature of this bill and not a bug. The Heritage Minister has praised these secret deals. The Minister calls them “market based solutions”. The government, the Minister says, has no role in. Brown suggests to the senators that this is a disingenuous position. It is an attempt to shrug off the responsibility for the harm that this bill is already causing using spin and sophistry.
Brown pointed out that these deals are only happening because of Bill C-18 and that makes the government responsible for the impacts that this is having on public trust in news. Pretending otherwise is beneath everybody’s standards and is far less than Canadian’s deserve.
Brown concluded that Bill C-18 bakes in secrecy about how Canadian news is funded and is permanent and secret formulas by which is determined how much each of these deals are worth. It forces backroom deals that disincentives news companies from criticizing, investigating, and exposing Facebook and Google and it forces us to keep our own listeners and readers in the dark about who is paying us to report them the news. Bill C-18 might financially sustain news publishers, but at what cost? If our proposed solution about the lack of transparency is deemed a non-starter, then he urges senators to find a different solution that would give Canadians basic transparency and he would suggest that senators have a responsibility to do so.
Jen Gerson then opened with her remarks. She spoke about the growth her operations have had and forthcoming expansion. She said that like Brown, they don’t require any additional government funding to help them to sustain their growth or reach Canadians. She’s just going to begin with her issues with this bill by pointing out that she agrees with everything Brown has said except that she’s even more curmudgeonly than he is. She thinks that this bill is fundamentally and conceptually flawed. She hates to bring this to the senate at this late juncture, but she’s not sure that even transparency measures, which she agrees with or amendments can fix it.
Fundamentally, Gerson explains, there is nothing grassroots or collaborative about this bill. This bill clearly came about as a result of a set of collaborations and discussions between lobbyists that are dominated by the existing legacy players and government. If this had truly been a grassroots effort, Bill c-18 would not look anything like this. It would have built in transparency measures, the CRTC would have nothing to do with it, and it would probably look something more like a straight forward taxation of digital media that would then be reproportioned out to both independent and legacy media according to a very transparent, easily published formula of some kind.
The fact that we don’t see that, Gerson said, that instead, what we are seeing is a kind of shoddy rehash of the Australian model tells you who is actually pushing for this. Because of course we know that, for example, many legacy media have, for the last decade, have been complaining about the fact that Google and Facebook “steal” their content and “steal” their value. Respectfully, had this content had any value to these big legacy players, they wouldn’t require legislation in order to milk the value out of it.
If this content had any value to organizations like Facebook and Google, Gerson explained, they would be willing to engage in truly market based solutions by engaging with these corporations directly. No legislation would be required at all. The fact that it has taken legislation to force these deals out of these companies tell you the real value it sees in avoiding legislation, not in the actual content itself.
Gerson noted that presents her with a best case scenario with this deal as presented. The best case scenario that you could possibly get out of this deal is a system by which, bluntly, that the legacy media organizations would disproportionately benefit from largely secret deals with corporations. They would increasingly become dependent on the success of these corporations, and as we’ve seen, some of these corporations would simply pull out of the media ecosystem altogether.
Gerson said that she realizes that we’ve had previous witnesses said that even if, for example, Meta followed through on their threat to expunge all news content from its platform, they would only lose $1 million and it would be no big deal to them. Well, of course it wouldn’t. It would be no big deal for the incumbant players to lose Facebook’s distribution model. Let her tell senators who it would be a big deal for. Independent media, startup media, and media that is trying to build its brand in the marketplace. The reason why that is is because smaller independent media are disproportionately reliant on social media to build a brand, develop an audience and get a network across.
So, Gerson explained, in order to preserve, once again, the legacy media outlets access to distribution and audience, your potentially willing to cut off the most powerful tools that the smaller media have as a potential tool for developing alternative systems.
The last thing that Gerson would like to point out here is that she thinks that the status quo isn’t adequate. The type of funding senators are hoping to provide legacy media is overwhelmingly going to go to companies that have already demonstrated that they are willing to cut costs. They are already demonstrating that they are willing to engage in mass layoffs. They have already massively undercut the quality reporting that they do. So the idea that the big legacy media is producing the high quality content, and this is mixed in with the (billage? deluge?) of low quality content, she would dispute that firmly. Go look at PostMedia papers today and tell her which one of them is devoting significant resources to the type of high quality content that they need to be producing and compare that to what it was 10 years ago.
Continuing to give failing companies money, Gerson points out, to do things they will continue to do which involves reducing capital to the typed of quality investment in journalism that they have demonstrated that they are already wiling to do is not a winning solution. If the government needs to step in on this file at all, there are so many better mechanisms and so many more transparent mechanisms that it could use to do so. She doesn’t see how creating this particular incentive structure is either sustainable in the long term, desirable in the long term for trust issues, nor will she bluntly think that it will work.
Jeff Elgie of Village Media then opened with his statement. He said that he sits before senators today as a news publisher and entrepreneur from a different perspective than many of his peers. They are a company that was born digital and has been brought up with Google and Facebook. The point he hopes to make is very direct. They believe strongly that there are fundamental issues with Bill C-18 which, instead of helping their industry, could hurt it substantially. The original premise of the bill was that large tech platforms take their content without their consent. This is not an accurate depiction of their relationship.
Each of us has had the ability to prevent Google from crawling their sites at any time just as they have the ability to stop publishing their content to Facebook, Elgie continued. They don’t do this, however, because they benefit greatly from the traffic back to their sites which they, in turn, are able to monetize, form new audiences, subscribers, and followers that they would otherwise be challenged to reach. These platforms are the best on ramp to news that they have found and they have tested many. Today, Google and Facebook almost generate 50% of their traffic on an ongoing basis. This is not unique to them. You’ll find numbers close to this across their entire industry, legacy or new (I actually think that is surprisingly low. Normally, the traffic volume for both is actually higher. Maybe other platforms are pushing that number down? Either way, though, I agree with that and congrats on finding a way to generate traffic outside of those two services.)
Elgie pointed out that having said all of that, they do recognize that this government wants to pass this bill. So, while starting over is most appealing to them, they understand that the most realistic solution might be to amend the bill appropriately. He is in agreement with a number of his colleagues, including those on this panel, the position that they have put forward collectively as the independent online news publishers.
To clarify, Elgie added, he agrees that Google and Facebook pull a significant share of advertising revenue from the Canadian marketplace. That advertising revenue, historically, made its way to media companies which used it, in part, to fund journalism. In order to ensure that there remains a relationship between Canadian ad dollars and Canadian journalism, they do feel it’s reasonable that these companies help the industry going forward. He doesn’t think they disagree. so, it is their view that universal transparent funding formula correlated to journalism expenditure represents the most effective solution.
As it stands, Elgie explained, there is the potential for Bill C-18 to favour large players regardless of journalism expenditure and to create hostility in the industry due to the potential for secret deals being negotiated. It represents the opposite of what the messaging has been on this file all along: to create a level playing field. The issue, in fact, has already been created. They, Village Media, have been one of the fortunate companies to sign licensing deals with both Facebook and Google. So, he sits before senators today advantaged by a revenue source that many of his peers do not have. Why would they leave Bill C-18 open to allow the scenario to persist?
There is now a much worse outcome that we need to consider, warned Elgie. If Facebook pulls out of news in Canada as they have indicated, it will have a devastating impact on Canada’s digital news ecosystem. As mentioned earlier, Google and Facebook have been the best on ramps for these news sites. In the absence of either of them, sustainably launching news sites or even sustaining recently launched sites might no longer be possible. Even worse, Canadian’s will no longer be exposed to news in that environment (well, not exposed to Canadian news at least. I think they’ll be able to access non-Canadian sources still). At a time when voter turnout is at record lows, and we can be expected to be flooded with misinformation from technologies like generative AI, the missing voices of Canadian journalists in these environments could be damaging to our society.
In their ten years of operation, Elgie added, Village Media has gone into each year with expectations of continued growth and sustainability. They are profitable and they reinvest their profits by expanding into new communities and growing their news rooms. However, as of recently, for the first time ever, their company has paused almost all new hiring and suspended all new community launch plans. The potential outcome of Bill C-18 has put their progress at risk (wow, that couldn’t have been easy). He asks senators to, respectfully, very carefully consider this bill.
Questioning the Witnesses
Senator Julie Miville-Dechene turned to Gerson and said that she was listening very carefully to her and she understands, as senators all do around the table with the anxieties facing the unknown situation and she understands that Gerson is concerned. However, it seems to her that we are talking a little bit- there is a little bit of a dichotomy in her analysis. Gerson is saying that why, if there was value in traditional media, would the platforms not negotiate? It seems to her that it is giving a lot of credibility to Google in general. Businesses don’t want to voluntarily share revenues. That’s the first thing. Also, Gerson seems to be saying that all traditional media, and Gerson talked about PostMedia as an example are dinosaurs (she never said that in her introduction) and more, it seems to her that even among some of the smaller players and the traditional media players that there are some that are better than others in terms of journalism.
So, Senator Miville-Dechene continued, it seems to her that it’s a false analysis because there are traditional media that continue to contribute despite the lack of trust of the general public.
Gerson responded by saying that she agrees with Senator Miville-Dechene. She has no particular problem or objection with a private company negotiating with a private company in a mutually beneficial agreement. If Google or Facebook or any of these tech companies feel that they should be engaged in an unmediated negotiation with one another in order to share content or whatever else, as we’ve seen, that’s not the purview of government to to deal with. In that kind of situation where value is seen by both parties, there is no need for legislation. That’s the problem here.
If these companies are negotiating with private companies, Gerson explained, in order to secure licensing deals, great, super, awesome. The government doesn’t need to step in here. But, if these companies are only negotiating with private companies because they fear Bill C-18, then they are not negotiating out of any sort of mutually agreed upon value. They are negotiating because they want to avoid legislation. The value is only inherent in the power the government can use to create leverage on behalf of the media companies. Whether you agree if that’s a good thing or a bad thing depends on your point of view.
Personally, Gerson said, she thinks that’s not ideal. She doesn’t think that creating a captured environment where media is dependent on the government to force companies to create value for them is going to create a trust rich environment for either the companies, the media, the audiences, the media organizations, or the government. She thinks that it’s a lose lose lose situation all around philosophically.
As for the other point that Senator Mivillle-Dechene, Gerson added, and she thought it was a very good point, just because there are losers in media doesn’t mean that there is a market failure. There are going to be winners and losers. It’s a competitive environment. There are going to be small companies that can’t hack it. There are going to be large companies that do. She thinks that we have seen overwhelmingly that companies that invest in quality, that have good relationships with their audiences and scale appropriately to what they are hoping to achieve tend to be very successful in media. There is a model for success. Let’s remember that a lot of the failures that we are seeing, or the collapses that we are seeing are coming as a result of poor business decisions and poor vision as a result of many years of, frankly, of terrible business practices. (this paragraph has so much “THIS” from me, it’s kind of remarkable, really.)
So, Gerson continued, stepping in to save a lot of those companies with forceful legislation of this kind is only going to be- it’s a moral hazard that continues to reward them for poor business practices that continues to put journalism last.
Senator Pamela Wallin turned to Brown and said that when he was talking at the beginning of creating more distrust in media because of the question- the issue of corporation influence, was Brown’s concern the same with what senators have seen in terms of government direct funding over the last few years? Does Brown think that that has fuelled and contributed to that issue as well and therefor, why is-? She is presuming Browns position is to keep it all out if they possibly can because whether the funding is corporate or government, it undermines the reputation.
Brown responded by saying that yes, he does feel that the government funding has contributed to the erosion of trust and the research would support that. The levels were declining, but they were declining much more sharply once government funding became available. Canadaland does not accept government media subsidies. As a publisher, he is surveying the landscape. His original position is that all of this is a threat to their independence and a threat to trust levels. But as Gerson pointed out, this is done already. The inequity in the playing field. This isn’t a hypothetical. Google and Facebook have already benefited some. They have chosen who succeeds already. It has been not only the biggest media companies that have received most of the money, but also the ones who were using their editorial pages to bash big tech and some of that criticism has stopped now that these deals are now in place (it may be in part because they don’t want to see these deals slip through their fingers as greed takes over the debate.) That’s a very dangerous precedent.
All of these things contribute to the public having very legitimate questions, Brown added, and, he thinks, a very legitimate erosion of trust. He has to act as a realist and pragmatically as a business owner. These media subsidies are available. They are arming their competitors to compete with them. In fact, their competitors have used those subsidies to hire away their employees and launch rival products, directly competing with Canadaland podcast news market which they pioneered in Canada. So, they are already suffering from an inequity in the playing field that these measures have created. What he’s trying to do now and why he has joined this coalition of independent news publishers is, in the spirit of compromise, if this is going to happen whether he likes it or not or whether we like it or not, then we should be as fair as possible and we should be as transparent as possible.
Senator Wallin then turned to Gerson and said that, just as a quick point to her as well, whether it’s forced government funding or existing government funding or forced corporate funding as this bill would do, it leads to, and she thinks she’s paraphrasing Brown accurately by saying, it potentially leads to self censorship and we are already seeing that.
Gerson responded by saying that yes, she thinks that everything about this bill is a disaster and even the alternative- any kind of government funding to media where you have basically the entire media market, to some degree, dependent on legislation or government funding will inherently damage not only trust in media, but media itself. It is a corrosive poisonous thing and she’s sure there is a business school word for it. But as Brown noted, when your competitors are picking up the subsidies, you have to in order to compete, right? So even companies that would philosophically be dead opposed to any kind of help in this regard, feel that they have to start taking the money that’s coming out of these programs and systems just to compete with their competitors which is an absolutely stifling thing to do. It makes startups almost impossible. It makes innovation very difficult. This is a bad system.
Gerson explained that if you were to have her, personally, craft a system that deals with the media trust issues and the lack of coverage in communities issues, she wouldn’t go about this through any kind of funding mechanism. She would go through it with a mandate review system of the CBC. She would take a totally different approach to this and it wouldn’t involve government funding or legislation at all.
Senator Paula Simons said that much as she is a fan of Canadaland and The Line, and she really is a regular consumer of both their products, it’s Elgie’s model that fascinates her because there is such a dearth of local news coverage reporting on the news which a commentary site like The Line can’t do in the same way. So, she is really enthused to hear about Brown’s success. She wants to ask, for all of the witnesses, if they could quantify what the impact would be on their businesses would be if Google and Facebook simply stopped sharing their content and blocked people from sharing their content. She’s still reeling from Crawley from the Globe and Mail coming in there and telling senators that his company pays Google and Meta to share his content while simultaneously claiming that Google and Meta are stealing his content (reference to hearing 7, segment 1) (honestly, I’m not even close to being surprised. The large news sites do this all the time and it only further highlights their hypocrisy in this whole debate.)
So, Senator Simons said, what would it mean- what percentage of their traffic is coming from Google and Facebook and Instagram, what would it mean if those companies simply cut off Canadian’s access to their products?
Elgie responded by saying that, as he mentioned in his speech, Google and Facebook represent upwards of 50% of their total traffic. Google is around 30% – 35%, Facebook, as of yesterday, is roughly 17% depending on the market we are talking about. If that traffic was lost, the business would be over (ouch). You cannot take 50% of your entire inventory away in a business that is not a high margin business. They are a profitable business, but the business would not support a 50% loss in traffic (I’m really hoping normal search traffic would still be accessible, blunting some of the damage, but there are no sure things here.)
Now, Elgie continued, he is not convinced that Google would fully abandon the industry, but he does believe that Facebook is prepared to follow suit with their threat which, in his case as he said, they’re looking at a 17% traffic loss. It will not devastate their business. They would survive it, however, he thinks it will devastate other businesses – especially new digital startups and, as he mentioned before, it will prevent the successful launch of new community sites. Facebook has always been one of the best channels for them to use to launch into a new market by promoting their content, by building a following, and yes, they pay them too. They pay them to be on their platform because of the value it brings back to them.
Gerson said that from their perspective at The Line, they are a Substack based and subscription based model and they have consciously tried to minimize their dependence to external social media for exactly this reason. They stopped putting things on Facebook because they know that Facebook can just take it away from them. It’s not a reliable form of growth. Anybody who has been in media for any length of time, particularly in the digital side, will know that you live or die by the algorithm and a media organization will spend significant amounts of money and entire staffers devote themselves to maximizing SEO (Search Engine Optimization), they spend a lot of time trying to maximize and generate traffic from various sources and we all know that someone in California flips a switch on the algorithm and all that work goes to waste and they have to start again.
Gerson pointed out that this is a consistent problem that media organizations have. For them, it would not devastate them. But, two points, she was working on the digital side of the National Post, a shocking amount of traffic was not coming from Facebook or Reddit or any of those places, but it was coming direct to the landing page. A lot of traffic would go from the main landing page and the user would then click to go somewhere else which means that most people are choosing media products by habit which gives an environment where social media is not spreading links or news links. It gives the incumbent players an extraordinary advantage because people are going to the Globe and Mail, the National Post, The Calgary Herald. All of these places they already know about and it- (time ran out)
Senator Rene Cormier turned to Brown and said that something they published in 2022, he said that several small businesses and startups would not be eligible under the bill. So, an amendment was passed at the other place to allow for the eligibility to allow the small businesses that employ as few as two journalists. So, in Brown’s opinion, does this amendment allow for the accessibility of small startups? His second question, he’ll ask right away. The Consortium of Official Languages Media has said to the committee (reference to hearing 5, segment 1) that several small media outlets count almost entirely on freelance journalists which would allow them to be eligible with the current version of the bill. So, does Brown think that senators should envision an amendment that would deal with the small media that only employ freelancers?
Brown responded by saying that he was glad to see the amendment carried in a compromise fashion, making it possible for news rooms with two employees and eliminating the need for it to be arms length because a lot of what they are seeing in terms of innovators, entrepreneurs, risking their own money – some of them are laid off journalists from traditional media, some of them are husband and wife teams or people who are related to each other – to exclude them on that basis is ridiculous. He is glad to see more of the small room news organizations are going to be- have access to this.
Brown said that it’s still not good enough if you actually look at the reality of what’s working and succeeding and many- there are, at this point, hundreds of success stories that kept getting written out of the crisis and failure and the model that is working is the micro news room. Often that is one journalist who is not even necessarily full time (I’m guessing that I would fall into that category), often employing himself and freelancers (someday that will happen for me!). By definition, this bill, and all of the funding mechanisms exclude startups, OK? A startup is something that you are starting up. All of these funding mechanisms require you to be an operation for a number of years before you reach the point in which you have any access.
Brown said that he understands that there are concerns about letting the wrong players in and we get back to the question of what is real news and what is fake news. It’s a thorny question. Basing the criteria on the size of a news organization has nothing to do with the quality of the news information being published and, yes, it’s a detriment to, he thinks, one of the great signs of hope that journalists will find ways to bring their services to the public, but just not necessarily the ways that fit very specific criteria included in Bill C-18.
So, Brown added, he thinks that further amendment would be very welcome and would have a huge impact.
Senator Andrew Cardozo said that he would just like to take a step back. This conversation is very interesting and thought provoking. He wondered if you (seems like he wasn’t directing this to anyone in particular) could share with senators their thoughts on dealing with, as they represent folks who are on the front lines of online media, where they would see Canadian media 10 to 20 years whether or not senators pass Bill C-18. Are their type of organizations the future and are the legacy media going to be gone and, is there something different about his media and could we end up with parties as big and as strong as you (again, not directed at any one witness in particular) who deal in misinformation and disinformation. Is that part of the battle we are going to be dealing with in the years ahead? If they could paint the senator his thoughts of the next 10 to 20 years and maybe we could start with Gerson, Brown, and Elgie.
(This is a very broad question. 20 years ahead, I think we will see further shifting in the media. There will invariably be more consolidation in the traditional media which will partly be responsible for more closures as the conglomerates seek to “trim the fat” further. Online media will continue to hum along, though there will be more startups and failures, but largely things staying the same. In terms of fighting misinformation and disinformation, this is a battle people like us face every day. There may be more militant actions against those who try and keep the truth front and centre of our coverage, but the thing to remember is that misinformation and disinformation comes from all corners.)
(I’ve personally seen publications intentionally push disinformation which are records I work hard to correct personally. Then there is the classic source of disinformation and misinformation from politicians. Media correcting politicians is something that goes back hundreds of years, so there is nothing new there – and that will continue. Then there is online disinformation which will no doubt continue to be a headache. For someone like me, all of that ultimately contributes to a sort of information noise that I have to navigate, but it’s noise I’ve been dealing with for nearly two decades now.)
(All of the above doesn’t take into account Bill C-18. The implications of Bill C-18 is that smaller players will get grinded out of the system. Online startups will face a tough battle just to break even, small local traditional outlets will either realize that they have been had in the whole process or see their fears come to fruition. So, a number of them will get pushed over the edge either by platforms blocking news links or downward pressure from money flowing to their competitors. So, the legislation, if passed, regardless of outcome, will contribute to a more homogeneous news ecosystem where the biggest players will eventually be the only games in town. I’m personally not 100% sure whether the defences I’ve already implemented on the site will hold or if I ended up making a massive miscalculation on how Google interprets things and get wiped off the map – assuming that they follow through with news link blockages.)
Gerson replied by saying that, so 20 years ahead, yeah, no pressure! Apart from Bill C-18, she doesn’t think that Bill C-18 preserves the media as it is nor would it allow for an innovative and sustainable media for the future. So, regardless of Bill C-18, she thinks that you are going to have a Canadian media market that is much more dependent on the CBC to fill in the gaps left behind by a collapsing private market. She thinks that Brown is correct in saying that there is going to be a significant future in micro news rooms – so news rooms run by one or two people. She thinks that AI is going to be a player in media. For example, if this is harnessed appropriately and correctly, one or two people could run a very substantive amount of content with the help of AI generation.
Say, Gerson explained, you are in a small town like Medicine Hat, Alberta, your media market can’t sustain a newspaper any more, but you are one person or two people with journalism experience, you are using AI to generate content based on the latest city council meeting, the latest high school basketball scores, the weather- with the help of AI generative media, she thinks that we are very close to the area of being able to produce significant amounts of content for small communities and the reading public with relatively small numbers of people. That would maybe be an optimistic take on all of this, and we are going to be having large national media outlets. She doesn’t think that the Globe and Mail is going to go anywhere.
Gerson then said that but pinning out hopes on the idea that PostMedia is the future, she doesn’t see that.
Brown said that he agrees with most of what is said. There is no credible path with PostMedia to seeing how they survive. There’s nothing that they offer. He reports on the media. They seem to be in a controlled immolation. He expects bankruptcy in the years ahead. He doesn’t know how TorStar comes out of this. He does think that a model like the Globe and Mail where you have billionaires backing it and they provide an incredible amount of high quality journalism, that’s a model that could survive. In general, it’s a return to first principles.
Brown continued by saying that it’s subscription models – to return to Senator Simons question – those who aren’t reliant on big tech and we aren’t building a house on a shaky foundation on an algorithm that they don’t control. Newsletters and podcasters where audiences directly supporting the news business and there isn’t an intermediary, he thinks, are going to be a big part of it. He thinks it’s going to be a predominance in subscription over advertising which is very vulnerable to economic terms. The CBC has a fundamental role in it, but he thinks it’s crucial that we take them out of competition where they are actively trying to destroy other news organizations. Instead, he knows, and he thinks that Elgie has proposed something that has been proposed for many years, which is that CBC content should be available under Creative Commons licensing so that others can use this publicly funded media to help them build their news products (fully support this idea!) and they should be taken out of the advertising competitive landscape entirely.
Elgie said that he thinks that where he sits right now, they see what the future of news looks like. You see some of our communities where upwards of 40% of all adults in the community visit them daily or multiple times per day. You see a rebirth or a rebuild of what used to be a daily newspaper model where people not only come for news, but also classifieds and weather, for events, for obituaries, and more. It is a difficult business and in all respect to his counterparts and colleagues in the print business, they have the advantage of being born digital, they say. That’s all they think about. It’s all they do – they think about that with respect to audience, they think about that with respect to their product. However they develop their commercial products, train their sales teams, etc. and it’s tough work. It’s been 10 years of very tough work, but it is a profitable model.
In most of their communities, Elgie continued, they employ more journalists than their daily or weekly newspaper counterparts and it gets better and better as they get better at what they do. So, he thinks that there is a strong future in a digital model, but it’s going to take time for some to transform, for some print publishers to transform and for other publishers that are also new and to take place in some cases.
Senator Peter Harder turned to Elgie and said that some of his co-panellists have raised the issue of self-censorship in the event that Google funding has that influence. Elgie, himself, has taken Google funding. Is Elgie engaging in self-censorship?
Elgie responded by saying that, for them, it’s not really at all relevant and that’s simply that they don’t cover on a day-to-day basis what Google and Facebook are doing. Their news is highly focused on local communities and so it would have zero influence over their editors or their reporters. (That clearly backfired on Senator Harder.)
Senator Harder said that Elgies business model often goes into communities where local media has collapsed or gone bankrupt or gone out of business. That clearly has given Elgie the opportunity to expand their business. Given Elgies lack of enthusiasm for this bill, is it safe to say that his business model depends upon further collapsing of small town media collapsing which delaying this legislation would guarantee? (well that was both ignorant and asinine of the senator).
(The wifi went down at that moment which was really bad timing)
Elgie responded by saying that he wants to be clear that they don’t celebrate the collapse of daily newspapers, certainly in the loss of journalism jobs, but the fact is that it is, from time to time, a reality. When a daily newspaper closes, those tend to be their best markets. So, Guelph is an example, Barrie is an example because there is a void and there is also a habit that’s left in its place. The problem with Bill C-18, in its form, so outside of the transparency concerns that he has, is that if Facebook were to pull from the environment, that is one of the strongest tactics they have used to inform the community that they are there. It’s highly efficient, it’s highly related to the habits of the local news consumer, so, in terms of pausing new market launches, that is a substantial part of their playbook in terms of how they operate.
Until, Elgie added, they see that happens and until they think that through, it does give them pause.
Senator Donna Dasko turned to Brown and said that just on his analysis on declining trust as a pollster for over 30 years, she’s seen that trust in many institutions has gone down, not just the media. She would attribute that to the fact- one of the many factors being the difference to all authority has gone down. So, she thinks that there is another analysis there, but that’s a topic for another day. However, corporate influence can be a problem whether or not it is related to declining trust. So, she pick up his comments on that point and she wants to ask him what he does think what the impact would be, especially Meta, were to exit this marketplace – and Google because they have talked about that too – but Meta has certainly said that they- they sound serious about leaving. So she just wants to ask what his opinion is, would that impact him, how that would impact his organization, and what is his thought about whether that’s a good thing or not.
Brown responded by saying that he thinks he has to recognize that the reality is that Meta has already all but exited news distribution. Google got a lot of bad headlines because they turned off the news for some percentage of Canadians and didn’t tell anybody until a journalist discovered it (it took weeks before that was discovered, actually) – it was a journalist that discovered that. Meta has been tightening the spigot so that of the thousands of people who have asked for Canadaland content, it used to be published content and the people who have asked for that content got it. That number of their own audience they were able to reach through Facebook has gotten smaller and smaller and smaller and if they want to reach them all, they have to pay to reach their own audience which is what Crawley was referring to earlier (reference to hearing 7, segment 1). They’re at a point where if they were to completely get out of the news business, it would have almost no impact on Canadaland.
So, Brown continued, he would submit that the reliance that the news publishers have- and he does appreciate that many of them have a big reliance on Facebook, it’s been a disastrous relationship and he thinks that there are things that he thinks that he could improve on. Anti-trust measures could have an impact that’s positive, but he also thinks that anybody who is building a news organization from the ground up would be foolish to build their audience based on- “I’m going to build an audience on TikTok”, “I’m going to build an audience on Facebook” because you have no control. You have to go directly to your audience and want to actually be able to reach them.
Brown added that Google is another question. It’s almost unthinkable that Canada would be one of the only countries in the world where you search for an answer to a question and information on a subject and the results that do come up do not include news information. He’s not aware of any other western country where that is the case and he supposes that they will find out if they mean it or not. Again, where Gerson was deliberate in building her audience up via newsletter, they kind of stumbled into it through podcasts – it’s an open platform and anybody with any form of podcast application directly accesses Canadaland. So, his traffic is not dependent on either.
Brown explained that he does think that we have to take seriously what the tech companies are telling us, but the very fact that we are in the position of being threatened rather than the sabre rattling and chest puffing that we won’t be threatened, he thinks that we have to ask ourselves how is it that we are in a position where the threats of these foreign companies are so impactful, why are we so beholden on them and dependent on them and is that really a dependency that we want to enshrine in amber forever especially when this is a vastly shifting landscape with new technologies all of the time.
Senator Dasko asked about the viability of other search platforms to take the place of, let’s say, Google. Is that viable?
Brown said that he never likes to take the position that it must be Google and can only be Google, but, you know, Bing isn’t really a thing. They have things like DuckDuckGo, a search engine that doesn’t track us. We do have other options that are pretty good. They do seem to have- he thinks that antitrust is the answer because they have locked down that market and built a big moat around it and we are now beholden to them for information. He thinks that we have to look at anti-trust solutions for that problem.
Senator Bernadette Clement continued with Brown. His points about anti-trust are well taken, but she wants to ask about the threats by these bigger platforms and the risk to him. Can they really go through with those threats and not lose big time? (yes) They benefit from traffic of clicking onto different news media as by clicking, they are giving those big platforms information that they can then use to monetize (this assumes that news is the only game in town on these platforms. That is absolutely not the case.) So, she wonders sometimes about their threats. The second question to Brown is around amendments. What would be the most urgent of these amendments outlined. Brown talked about the percentage of editorial expenditure being the same, they talked about a code of ethics. What would be the most compelling amendment that Brown is suggesting?
Brown responded by saying that it would be the fair universal funding formula which also doubles as a transparency mechanism. It’s the one Senator Clement cited and the one he used his time to speak of. It would eliminate the secret backroom deals that would be beneficial to the issue of declining trust. Simply put, if a news organization qualifies for funding from these platforms, they get a prescribed amount for funding based on their editorial expenditures and that’s it. That frees them to cover them as they will and not be afraid of whether or not they like them or not for doing so.
When it comes to the handicapping of are these threats serious or not, he can share his opinion. He takes them seriously because he thinks that whatever losses Google and Facebook might suffer financially from turning off the news in Canada, they are facing similar legislation all around the world. He takes seriously that they might make an example out of Canada to show other countries what happens when they are interfered with. He doesn’t claim to know ultimately whether they would go through with it or not, but he doesn’t consider it a ludicrous idea.
Senator Housakos then noted that there are only a few minutes left and turned it over to the witnesses and offered them to give a few last minute words to the committee.
Brown said that he would simply say that he thinks that of all the threats, the ones that have impacted them the most has been government intervention so far. They have been doing just fine and now they are trying to navigate a shifting playing field that has put them at a disadvantage that is coming to them because of policies, not because of market realities. His plea to him is, first, do no harm or lessen the harm. He thinks that he has put forth really tangible practical amendment that would have a tremendous beneficial impact and he urges senators to take a serious look at them and, please, transparency first.
Gerson said that her plea would be first to take care of your own house. The federal government already has an extraordinary disproportionate role in the media market through the CBC. If senators have concerns about people being informed, having trust, all of these issues, communities being well served by journalism, the CBC is the correct mechanism by which to address that before we create an entirely new system. So, creating Bill C-18 in the absence of doing a serious mandate review for the CBC is absolute folly.
Elgie said that today, on this panel, senators have heard from himself and Brown and from the previous panel, Myles and Deegan representing News Media Canada. None of them disagree that journalism expenditure and a formula based on that is the right answer. It solves for concern across the industry, it solves for trust as Brown pointed out. They are not asking for secretive information from companies, they are just asking to apply a universal funding formula when this is calculated. He thinks that this is the best solution for an amendment to this bill.
With that, Senator Housakos adjourned the hearing.
Concluding Thoughts
One of the things I do when listening to these hearings is ask if what is said tracks with everything else I know with the debate of this bill. As far as I could tell, the witnesses on this panel did quite well in sticking with the facts and their experiences in this sector. I don’t think I was really able to find anything that was particularly flawed in what was said. I think the only real flaws was from the odd senator here and there, but that was it.
What I heard today was definitely refreshing in this series. There wasn’t this heavy reliance on talking points which is more than what I could say for other hearings. In other hearings, you got this constant barrage of talking points like “Google bad!”, “Facebook bad!”, “News deserts!”, and, “They’re stealing from me!” seemingly being thrown out there regardless of the questions being asked. It really showed in the end. In this hearing, you got none of that. You had questions and answers that made sense. When questions were asked to test the veracity of the answers, the answers really solidified the quality of the information being given by the witnesses.
Yes, some of the testimony that was given was a bit outside my realm of expertise, but that’s OK because that is definitely normal. When you have people with different life times of knowledge coming together, you are going to get information that you really know little about sooner or later. It’s perfectly normal in that regard. WE all have different focuses that may or may not have some overlap here and there.
With that said, one thing that especially rang true to me is the idea of micro news rooms from Brown. It never really occurred to me to refer to what I do as a “micro news rooms”, but in retrospect, it really makes sense. A one person solo operation like myself or a two person team is really a common way to start up a small online news operation. Sometimes, it’s a team of an admin, an editor, and a separate staff member. Sometimes, it’s an admin doubling as a social media expert to do marketing and an editor that writes the news. There’s all sorts of configurations out there like that that ultimately build a website to something that is refreshing and exciting. While this isn’t exactly a new trend today, I agree that this is something that we will continue to see moving forward.
Another thing worth highlighting that speaks to Elgie’s points, a lot of supporters gravitate towards the idea that people like us are the enemy – that this is a battle of good vs evil and the news rooms are the good guys and anyone who doesn’t like the legislation is a bad guy. As a result, you get dangerously bad misconceptions that people like us are only doing what we are doing because we don’t like the larger media outlets simply because we are a competitor to them. For a vast majority of us, that is absolutely not the case. For instance, I have been an advocate for a mechanism that the money derived from theoretical deals that could come out of this legislation to ensure that such money would actually go to the news rooms and the people that actually produce value in the world of journalism. If I was just out there trying to ensure the demise of traditional media outlets, why would I care about such things at all? Simply put, I have a lot of empathy for other journalists out there and I feel that this would actually go a long way in furthering journalism in this country as a whole.
So, when Elgie spoke about the detrimental impacts this bill would have, the question was posed to him that this is all just some sort of ploy to further his agenda at the expense of more traditional outlets. This thinking, as you could read, annoyed me. So, Elgie’s answer that he would be much harder pressed to reach his audience like other smaller startups would be negatively impacted was a really good and honest answer to that, tearing the notion of a nefarious goal to shreds in the process. I’m not sure that very many will change the minds of supporters of this bill as they will likely continue to call people like us the evil bad guys who are engaged in a coordinated sinister plot to ruin journalism on behalf of Google, but all we can do is continue to speak the truth on this matter.
To that end, I will happily say it again, Bill C-18 is going to blow up in the large media outlets faces when Alphabet and Meta drop support for news links. It will cause significant damage to the news sector as a whole. Consequently, it puts my own operation at risk as well because, depending on how extreme the platforms take things, I might be detrimentally impacted by this effort and see my operation threatened as well. I risk being collateral damage here. For those and many other reasons, I am personally opposed to this bill.
One final note is that I really like Gerson’s comments on generative AI. We see a deluge of doomsayers about AI and how it’s going to destroy all of humanity or whatever. The thing is, these are just tools and I hardly think that the human species is going to go extinct because of a glorified auto-complete tool. So, it was a really interesting thought that AI could very easily be used to help micro news rooms generate content. So, a team of two or three people can distribute much higher volumes of quality content then they might otherwise be able to produce. I personally think that we’ll see that happen and it could very easily help journalism improve on things in the sector. So, a really interesting point there.
Overall, besides the asinine question or two along the way, I thought that was a very productive and honest hearing. I’m not sure enough people would actually listen to the truth because they’ll just dig their heels in further in response, but it was a good hearing nevertheless.
Drew Wilson on Twitter: @icecube85 and Facebook.
