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Media outlets push for regulatory changes to level the playing field amid coronavirus pandemic

Newspapers want feds to even inequity with web giants
WATCH: With COVID-19 exacerbating the media's financial problems, newspapers want Ottawa to even the playing field with tech giants, like Google and Facebook.

Canadian media outlets have come together to press Ottawa to level the playing field with tech giants that have become dominant players in news distribution as well as online advertising.

Amid the coronavirus pandemic, publishers of several of Canada’s major newspapers signed a joint letter to the federal government this month asking it to “correct an historical inequality that dates back to the birth of digital media platforms.”

The letter is aimed at the advertising revenue earned by Google and Facebook. It’s estimated 80 per cent of digital advertising worldwide flows to Google and Facebook, but they don’t pay Canadian news providers for their content.

“They are a duopoly in the truest sense of the world,” Postmedia CEO Andrew MacLeod was quoted as saying.

While it is somewhat unusual to see competing newspapers such as the National Post, the Toronto Star and the Globe and Mail teaming up, Canadian broadcasters have also been supporting an overhaul of the federal government’s policy.

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The Standing Committee on Finance tasked with hearing testimony on the government’s response to COVID-19 met Thursday to hear from stakeholders impacted by the pandemic.

Amongst the businesses testifying was Corus Entertainment, the parent company of Global News which called for an urgent overhaul of the Broadcasting Act.

READ MORE: Coronavirus continues to upend Atlantic media outlets as SaltWire lays off 40% of staff

“The big internet companies have been getting a free ride on the back of hard-created Canadian news content,” said Troy Reeb, executive vice-president of Corus Entertainment, the parent company of Global News.

“There’s a fundamental imbalance in that Facebook, Google, the other big internet multinationals control the ad networks, they control the access to the content. Yet, we continue to make their business models work.

“Up to 10 per cent of search results on Google are for news content. So there’s this subsidization from businesses that face a deeply challenged business model in trying to provide public interest news content, and is propping up these very wealthy multinational businesses.”

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In their letter, the newspaper publishers urged Ottawa to follow the example of France and Australia to make Google and Facebook “pay their fair share.” Australia is looking at a competition law, while France’s Finance Minister Bruno Le Maire is promoting a European tax on digital businesses.

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Prime Minister Justin Trudeau was asked about his pledge to act last weekend. On the Quebec television program Toute Le Monde En Parle, Trudeau acknowledged he made commitments during the election campaign but added, “It’s not our priority right now, with COVID.”

READ MORE: Quebec unveils $50M in annual funding to aid struggling news industry

Later in the week, he made clear the measures he’s considered are not being pushed aside, and that Minister of Heritage Steven Guilbeault “has been working very closely with allies around the world to see what they are doing and with the sector in Canada to ensure that Canadians get top quality information.”

“We need the media now during a crisis more than we ever have,” he added.

Even one of Trudeau’s staunchest allies in the recent CUSMA free trade negotiations, Jerry Dias, the president of Unifor, is critical of the government’s lack of action to protect Canadian news providers.

Unifor represents many news employees in the country, including some at Global News.

He says the government has done absolutely nothing on this file, while, in his words, “Facebook and Google have pillaged the Canadian digital advertising market over the past decade.”

Lacombe Globe set to print newspaper’s final edition
Lacombe Globe set to print newspaper’s final edition

Jeffrey Dvorkin, director of the journalism program at the University of Toronto, says digital companies that don’t pay into the system should share the ad revenue they take in with Canadian news organizations.

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“These large internet aggregators need to acknowledge the fact that they are basically taking away the work product of other media organizations without fair compensation,” said Dvorkin. “They are part of a media landscape and as a result have an obligation to acknowledge this by paying back or paying it forward.”

The financial pressure being felt by media organizations has only grown more acute since the coronavirus pandemic, but the industry is now one of thousands from coast to coast to coast, trying to survive the economics of this crisis.

But the urgency is real for basic journalism. Just days ago, Postmedia shuttered 15 community newspapers in Ontario and Manitoba. And for broadcasters, the dynamic is new and troubling – while more news consumers are tuning in, advertising is falling off. Businesses are laying off tens of thousands of workers, and Canadians for many reasons are just not spending money if they don’t have to.

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“The majority of Canadian media — whether in print or broadcast — advertising is their only source of revenue,” Reeb said. “So at the same time as our news product is more in demand than ever, media businesses are facing a deeper threat to their bottom line than ever.”