Peter Menzies: 'Imagine if Facebook wasn't there'
C-18 has evolved into an entirely predictable shakedown that will benefit established media players like CBC, leaving innovative start ups to fight over the scraps.
By: Peter Menzies
How time flies.
It was just 2016, after all, when Terence Corcoran of the National Post, bristling at the thought of government intervention in the news business, wrote:
“The first battles against government control were fought centuries ago in England over Licencing of the Press laws and other variations on measures that limited press freedom. The fight was waged by the likes of John Milton, John Locke and John Stuart Mill. The result became known as the libertarian theory of the press. In Four Theories of the Press, a classic 1950s book once on reading lists in journalism schools, Fredrick Siebert summarized the theory. ‘Let all with something to say be free to express themselves. The true and sound will survive. The false and unsound will be vanquished. Government should keep out of the battle and not weigh the odds in favour of one side or the other.’”
Inspiring words. Yet five years later — almost to the day — Corcoran’s paper and 16 other skeletal Postmedia dailies joined forces with the Toronto Star and 70 of its satellites to demand the government put its thumb on the scale of the free market by forcing Google and Facebook to give them money for the value they claim to create for the web giants who give them free access to their users. Each published a front page that was blank except for the chilling words:
“Imagine if the news wasn’t there?”
I think what they really meant was “imagine if we weren’t here.”
So I did. Without them there’s still the CBC, the nation’s largest news provider. Then there’s CTV/Bellmedia. Global/Corus and Rogers and literally hundreds of radio stations across the country, almost all of which now have websites that provide, um, news. Not counting the likes of the Washington Post, BBC and The Guardian for international news. Then there are more than 200 Canadian startups including, but not limited to, National Observer, Canadaland, Western Standard, Blacklock’s Reporter, The Narwhal, Halifax Examiner, The Tyee, True North, The Hub, dozens of local outlets operating under the aegis of Overstory Media Group, and, yup, The Line.
Five years ago this week, the Moose Jaw Times Herald (where Peter Gzowski got his start) closed after 125 years. No one likes to see people lose their jobs or famous old titles die. But a quick Google of “Moose Jaw News” takes you to at least three local websites: Discover Moose Jaw — linked to local radio stations — Moose Jaw Today and Moose Jaw Express. The Times Herald may not be there, but the news most certainly still is.
Regardless, Heritage Minister Pablo Rodriguez is charging ahead with his Online News Act (Bill C-18) which, to make a long story short, will force social media platforms to make “commercial” arrangements with large legacy media and other even more powerful vertically integrated companies.
So you know, this story started about six years ago in a room in Ottawa. Newspaper executives met with senior public servants in an effort to make their case for, well, money. The bottom line was that the government types wisely wanted nothing to do with having to decide who was a journalist, and the newspaper men left disappointed. I know this because I was there and left thinking that if anything was going to get support, it would the next thing.
But the newspaper lobbyists kept plugging away. A couple years later they won what at the time was a temporary five-year tax credit worth $595 million to help them transition to a digital economy. Then came the Local Journalism Initiative — $10 million annually also for just five years. Last month, it was doubled and extended. There is no sign of transitioning.
It’s almost as if Andrew Coyne might have been on to something when he wrote, for the Post, in 2018 that:
“The money the government is giving us is not going to solve our problems. It is only going to ensure we put off confronting them. Before long we will be back for more.”
And so they are and so they have been. News Media Canada’s persistent campaigning finally produced its Holy Grail — Bill C-18. All might have been well for Torstar, Postmedia and Le Devoir except that once the flesh was thrown on the bones of the Act, broadcasters that aren’t facing economic peril heard the dinner bell and came running.
The result, according to the Parliamentary Budget Officer, is that Bill C-18 is expected to produce $329 million in annual revenue for Canadian media (for context, that’s less than the Calgary Herald, Edmonton Journal, Edmonton Sun and Calgary Sun were bringing in between them 20 years ago). Of that, $249 million will go to broadcasters, few of whom are on a fiscal ledge and a good many of whom have contributed to the demise of local newspapers. Remarkably, the CBC, already receiving $1 billion in taxpayer funding, will get the most of that cash, followed by CTV (Bell), Rogers, Videotron and others. The newspapers and start ups will have $80 million (a little more than what the Edmonton Journal and Edmonton Sun used to make in combined annual profit) to fight over.
And very few of those previously mentioned startups — run by mostly young and often female innovators — trying to find a sustainable business model for good journalism can expect anything more than a token pay off. No. They will have to go to the little kids table and see what they can find on the children’s menu of subsidies.
It is distressingly obvious that while so many were tricked into believing this was the most progressive Canadian government ever, it is in fact, a slave to the status quo; as staunch a defender of the corporate establishment as the Toronto Club could wish for. With the 21st century and all its opportunities staring it in the face, Justin Trudeau’s government has not only turned its back on innovation, it has put its thumb on the scale in favour of failed business models that long ago ran out of ideas.
Yet there may be a final twist in this tale.
Bill C-18’s particulars are, as Meta/Facebook’s Kevin Chan put it to a Parliamentary committee last week “globally unprecedented.” For all its sins — and for all we know there are a few more skeletons rattling around in its closet — Meta is unlikely to pay up. Sure, it can cover the Canadian shakedown; what it can’t afford though is to pay every other country in the world that makes the same demand. So Meta says it may simply stop serving up news links which, when you think about it, is a better idea in the long run than permanently entrenching its dominant market position
So while the publishers of those blank pages appear to have bullied even the Conservatives into supporting this travesty, they are still left to ponder:
“Imagine if Facebook wasn’t there.”
Peter Menzies is a senior fellow with the Macdonald-Laurier Institute, past vice-chair of the CRTC and a former newspaper publisher.
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