Over the last 20 years, now we have witnessed drastic changes within the media industry. Between Between 2008 and 2021, over 450 news web sites were closed across Canada and at the least a 3rd of journalism jobs have disappeared.
Digital platform giants – especially Google and Facebook – are very much a part of this media ecosystem, but are they making a positive contribution?
By duplicating or sharing links to articles they do not create, but derive promoting revenue from them, they claimed 80% of revenues from internet marketingor nearly $10 billion in 2020 — these big tech corporations appear to be depriving news publishers of their fair proportion. So should publishers be paid for the usage of their content?
Internet Messaging Act
Many countries have debated this issue; few worked. In 2019, the European Union introduced the so-called “link tax” — essentially a licensing fee charged by search engines like google and news aggregators they’ve to pay publishers for using their content. In 2021 Australia introduced the bill this forces Google and Facebook to negotiate deals with news publishers within the country.
Now Canada is getting in on the motion. In April, the federal government introduced laws incorporating Australia’s approach. Bill C-18, Internet Messaging Actis a powerful push to get dominant digital platforms to negotiate mutually acceptable agreements with Canadian online newspapers, magazines, and television and radio broadcasters.
If they fail to reach an agreement, the parties may have to enter into binding arbitration overseen by the Canadian Radio-television and Telecommunications Commission (CRTC), an arm’s length regulatory body. Would Bill C-18, if passed, “contribute to the sustainable development of the information market” as the federal government guarantees?
It’s true that news outlets do he struggled to earn cash because the Internet upended their gravy train – classified ads and print subscriptions. But additionally it is true that search engines like google and aggregators have expanded the net news market. They drive significant traffic to publishers’ web sites, especially traffic from regular readers, that will not otherwise occur.
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A have a look at the ‘link tax’
There isn’t any evidence to show that news outlets are worse off due to Google, Facebook and other aggregators. In any case, the evidence (and a number of it) shows that, overall, news outlets can be worse off without digital platforms.
This is where I discovered it a study I conducted with economist Joan Calzada ‘link tax’ imposed by Spain (prior to the introduction of the EU-wide directive in 2019).
In 2014, Spain began forcing aggregators reminiscent of Google News to pay a link fee to original publishers. In response, Google shut down its Spanish version. We found that after turning it off Spanish news sites reported a decline in each day visits from 8 to 14 percent
To make matters worse, advertisers stopped placing ads on their web sites, causing promoting revenues to decline. Smaller news publishers – lower rating sites with a bigger share of casual readers – were hit particularly hard.
During the identical period, Germany also introduced a connection fee. In this case, Google News obliged German publishers to waive the linking fee. AND studies on the University of Munich found that publishers who selected to opt out of Google indexing suffered disastrous consequences: each day visits to their sites dropped significantly and traffic was redirected to competing sites that opted for indexing.
These and other research show that news publishers profit from Google services all over the world. So would Bill C-18, in its current form, really change anything for the higher?
The right side of politics
The current debate is predicated on the false assumption that news outlets are now not paid, as an alternative specializing in the right division of shared revenues between the platform and the content creator.
If Bill C-18 is passed, we are able to expect large publishers to receive a lot of the funding, which is what happened in Europe and Australia. Smaller media outlets with low brand awareness will suffer in the event that they do not join forces and negotiate with digital giants.
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We can expect Google, Facebook and the like to adjust their market behavior. For example, what would stop them from improving their algorithms to the advantage of news publishers offering one of the best solutions?
The latest evidence shows that Google Australia began recommending cheaper content after a law was passed in Australia.
Alternative policy solutions need to be considered. In the past, when Google faced similar legal problems, France and Belgium arrange lump sum funds that were shared amongst news publishers based on a predetermined formula. This approach ensures a good distribution of funds amongst content creators and does not distort the market behavior of the platforms involved.
Bill C-18 is just certainly one of three pieces of laws currently before the House of Commons. A bill on hate speech and other abuses on the Internet was also proposed, in addition to a bill that will adapt online streaming services to the Broadcasting Act.
It’s clear that Canadians approve; questionnaire shows that majorities support greater government regulation of the Internet. While it’s good to be on the fitting side of public opinion, it’s higher to be on the fitting side of politics.
