Canada recently passed a law to address the continuing financial woes of its traditional news media, trust in which has steadily fallen to 42% in 2022. The Online News Act, known as Bill C-18, passed in June 2023 but is yet to come into force. It will require digital media companies to compensate news organisations for hosting their content on sites such as Facebook and Instagram and via search engines such as Google.
In response, it is reported that Meta has begun to block news stories from its sites Facebook and Instagram. News companies are reported to have called on the country’s antitrust regulator to investigate, arguing: “Meta seeks to impair Canadian news organizations’ ability to compete effectively in the news publishing and online advertising markets.”
It’s the latest episode in the digital transformation of the global news industry whose business model has been severely disrupted as news revenues have moved to online platforms rather than the producers of the news themselves. In Canada, 80% of all online advertising revenue (CAD$9.7 billion for 2020) now goes to Meta and Google.
By requiring them to provide a digital dividend to news outlets, the act aims to reinvigorate Canada’s news industry, which was hit particularly hard during the COVID pandemic, with the closure of at least 40 news outlets. Meta’s decision to block news from its platforms is likely to make life even harder for the country’s news industry.
Sue Gardner, a journalist and influential media commentator in Canada has criticised the legislation as trying to fix a “tragedy without a villain” – apart from perhaps the internet itself. She says: “News publishers want to appear on those platforms, because that’s where people are finding news.”
She also says news companies must come up with better ways of monetising their content – and that waging war on the platforms where most people consume that content is not the best way forward.
The Australian experience
Any deals struck under C-18 are likely to disproportionately benefit the more powerful, larger, established news companies. This has already been happening in Australia where similar legislation was passed in 2021.
In response to the Australian law, Facebook (as it was then) initially blocked all news content before relenting and agreeing on a news media bargaining code. This enabled media companies to negotiate with platforms and has reportedly resulted in revenues of about AUD$200 million (£102 million) flowing to news organisations.
According to the Reuters Institute, the lion’s share of this initially went to the big players: Nine Entertainment Co, News Corp. Australia, Australian Community Media, the Guardian, and the ABC. Rupert Murdoch’s News Corp reportedly receives 15%-20% of these funds. But a deal was struck by a group of smaller publishers who were able to collectively bargain for recompense from Google for use of their content.
Funding quality journalism
It’s tempting to focus on the stand off between online media and the government on this matter, but the debate obscures a far deeper issue that societies are wrestling with all over the world: how do we fund quality journalism in an era of fast media?
Where clickbait and entertainment – even misinformation – are better at attracting eyeballs (and therefore generating more revenue) than news produced by newspaper and broadcast companies, the latter can easily become a diminishing presence in people’s lives.
News consumption is in freefall around the world, whether measured in terms of interest in news, which has fallen globally from 63% in 2017 to 51% in 2022), or in the proportion of people who will admit to actively avoiding news, which has risen over the same period from 29% to 37% (46% in the UK).
Only about 17% of people (in countries where payment for news is an established thing) say they are willing to pay for news. And the picture gets far worse when you look at the same factors for young people.
Research shows that the vast majority of people under the age of 30 get their news via mobile devices. They want their content to be free and are ambivalent about the notion that the choice of what they get to see is made via an algorithm (in fact the Reuters Institute found that many younger people trust algorithm-based news choices more than the gatekeeping of human news editors).
Future of journalism
Scandals – such as phone hacking by newspapers in the UK – and perceived biases of different news organisations have destroyed trust in much of the established news media.
And algorithms have done the rest. By showing people more of what they are perceived to want, they force news “consumers” into silos where the ideas being received by people at one end of the spectrum are barely recognised by people at the other.
This is why the aim, if not the effect, of Canada’s new legislation should be seen as worthy. It’s an attempt to preserve a form of mainstream journalism by encouraging a negotiated future between legacy media and online media.
If Canada does find a way forward to encourage Meta and Google back to the table, then other countries may follow. We could begin to see more settlements and funds flow back into the news media, reversing the trend of the past two decades. Yet, even if it does work, it may not go far enough in thinking through how to ensure the news media remains sustainable in the long term.
Without an organic shift in public trust in the value of high-quality journalism, there will be further erosion to the idea that there is a necessary, public good brought uniquely by our professional news media – which would leave democracy all the poorer.