December 5, 2021
An under-investigated policy issue is how much money might be delivered by a Media Bargaining Code requiring Google and Facebook to share revenue with Canadian media outlets, otherwise known as pay-for-content.
The Liberal government has promised such a Code early in the new year, inspired by the Australian government’s move last March.
William Turvill of the Press Gazette has dug into a series of confidential deals between the Platforms and Australian publishers and broadcasters in early 2020, agreements that resulted from the Morrison government’s plans to impose binding arbitration on Google and Facebook if they didn’t negotiate fairly for the news content they monetize.
Quoting a “senior industry source” in Canada, Turvill says that in the wake of the Australian deals the Canadian publishers are expecting to get 30% of their newsroom costs covered by deals with Google and Facebook, which they value in the range of $100 million to $150 million annually.
The payoff in a $100-$150 million package to a typical newsroom might be benchmarked against the 25% federal journalist labour tax credit program which provides a $14,000 annual subsidy per journalist in a spending envelope of $95 million annually. These are crude costings.
A year go in October 2020 News Media Canada stated on behalf of publishers that if Canada adopted Australia’s Media Code they expected to recoup $620 million in pay-for-content. But following Newsmedia Canada’s footnoting of the $620M figure to its source it was based on the assertion from two Australian news organizations (including media titan Rupert Murdoch’s Newscorp) in May 2020 —ten months before the confidential Australian deals were struck— that pay-for-content should be 10% of each Platform’s Australian revenues, pegging a range from $CDN 640M to $CDN 960M.
But we still don’t know the final negotiated value of those Australian media deals. The examples cited in Turvill’s article suggest much lower results than Murdoch was hoping for. An Australian industry analyst offered up the figure of $CDN 190M as the aggregated settlements with Google and Facebook, covering both print and broadcast.
Canadian publisher expectations from a legislated Media Code have now been drastically revised from $620M to less than a quarter of that figure at $100M to $150M, according to Turvill. That implies their recent crop of deals with Google and Facebook is worth even less than the revised figure, suggesting the platforms are having their way.
As discussed in a November 15th blog post from MediaPolicy.ca, the last few months Google and Facebook knocked off a series of undisclosed pay-for-content deals in Canada, going publisher by publisher. In fact Press Gazette reports Google has made deals with about 1,000 publishers in 15 countries including the UK, Australia, France, Germany, Italy, India, Argentina, Brazil, Canada, Japan, Czechia, Colombia, Austria, Ireland, and (sparingly) in the US.
What’s going on is Google and Facebook stealing a march on government regulation by negotiating confidential deals, one financially desperate publisher at a time. The strategy must be to establish a low “market price” for aggregated news on their Platforms before any Australian-inspired arbitration process sets it higher.
There is of course no “market price” in a monopoly, other than what the monopolist tells you it is.
As well, the exclusive focus of the Platforms’ negotiations for news articles ignores the indirect value of the ad revenue Google and Facebook earn by attracting news readers to their websites before they even know what they want to read.
The pay-for-content deals also ignore the anti-competitive duopolies over Search and Social advertising that have made Google and Facebook so rich and news media so poor.
If you want to read more about Facebook’s deals with Canadian publishers, check out an excellent feature article by The Logic’s Martin Patriquin, particularly the last few paragraphs.