Catching Up on MediaPolicy – civil wars in Canadian news journalism – the swiss cheesy Facebook news throttle – Blacklock’s appeals paywall ruling – a Warner Bros plan to ju-jitsu Bell

from LinkedIn

September 8, 2024

Well before the Online News Act Bill C-18 was tabled in the House of Commons in April 2022, I sat in on a heated debate about the wisdom of such an endeavour, held at the Ted Rogers School of Management in Toronto.

The debaters were from Canadian news outlets, the independents and niche digital outlets outnumbering those from mainstream newsrooms.

The majority of the participants were opposed to legislation that would force Google and Facebook to bargain news licensing payments. But mostly they were opposed, vehemently opposed, to anything that would give mainstream organizations a farthing. In fact, if there were any farthings to be had, they should go to the independents and “let the dinosaurs die.”

The mainstream folks bit their lips. The Globe & Mail guy left early, begging another appointment.

That was behind closed doors.

Today, the antagonism is out in the open. It is reflected in the CRTC filings in response to Google’s application to recognize its exemption from the Online News Act on the basis of its $100 million brokerage deal with the champion of the independents, the Canadian Journalism Collective.

In the same vein Scott White, the outgoing Editor-in-Chief of The Conversation, took the occasion of his departure to comment on the family feud in an LinkedIn post written out of exasperation with the denial of QCJO federal wage subsidies for his journalism enterprise:

Being rejected by an expert panel whose members cut their teeth in the days of ink on paper was a clear indication that funding programs are not open to new models. The federal funding and the subsequent Google money for journalists has laid bare an ugly battle between traditional and new media. Established broadcasters and newspapers want most of the money to go to them. New media say the old models have failed and funding should instead be used to invest in fresh enterprises.

This internecine rivalry continues to be one of the biggest threats to Canadian journalism. Old media, with their established brands, needs to innovate to survive. New media needs better brand recognition to thrive. New and old working together would be the best path forward – and yet the history of the profession shows that’s unlikely. Self-interested rather than collective strategies, outdated news wars and C-suite egos have led to the tattered playing field that is today’s journalism industry.

How one parses the statement that “established broadcasters and newspapers want most of the [QCJO and Google] money to go to them” depends on the meaning of the word “most.”

The mainstream news outlets that cover 98% of the news with 98% of the paid journalists support the equal wage subsidy for each employed journalist that is baked into the rules for both the Google and federal money.

Putting aside the fact that the federal QCJO program isn’t available to broadcaster news websites or that the federal government has drastically capped the broadcasters’ pro rata share of Google money, the headcount funding formula could be described as fair. If headcounts aren’t fair, everyone is at liberty to argue for “merit of news product” based upon audience data of clicks, views, or paid subscribers.

Then there’s the epithet of mainstream news outlets as dinosaurs, not innovators; news outlets that former federal Heritage Minister Mélanie Joly once described as “failed business models.”

If the failed business model is the advertising model, then nearly everyone in the news game is a failure, in Canada and elsewhere (Jeff Elgie’s Village Media notwithstanding).

Meanwhile, the “failed” mainstream outlets do try. Try to innovate, that is.

The billionaire-backed Globe and Mail has made a state-of-the-art transition to digital. If Postmedia wasn’t being sucked dry by never-ending debt payments incurred by a bad business bet from 15 years ago, it might have done the same. The unpaywalled La Presse is a success with its tablet innovation and small donor fundraising. The Toronto Star blew $25 million trying to imitate La Presse, its former owners losing their family fortunes in the effort.

The same independent versus mainstream media spat is being played out at this moment in California. Instead of vetoing the Californian legislature’s version of the Online News Act, Governor Gavin Newsom has struck a five-year funding deal that allows Google to pay a very modest price to evade news licensing legislation, lets Facebook off the hook completely, and looks to government subsidies to take the sting out of disappointed expectations.

The money looks like this:

• A public-private News Transformation Fund administered by a California journalism school (with majority control awarded to independent news outlets) funded $14 million annually from the state budget and another $10 million each year from Google.
• The continuation of Google’s $10 million per year funding of Californian news journalism through the Google News Initiative and its Showcase aggregation site.
• A $12 million dollar per year Google-sponsored Artificial Intelligence Accelerator fund, paving the way for AI adoption, something that may end up being the best or worst thing that ever happened to news journalism.

In sum, Google will shell out $32 million per year for Californian journalism, Facebook is out of the picture, and government has picked up $14 million in annual subsidies.

With a Californian-sized population, Canada has $100 million annually in Google money (with $37 million going to private broadcaster and CBC websites) and $95 million per year from various federal aid to journalism programs. That’s about four times the Californian news money (not counting the CBC parliamentary grant).

Writing in the American journalism site Nieman Lab, Ken Doctor claims victory in California. Doctor is the publisher of an independent news outlet, Lookout Santa Cruz and if Santa Cruz was located in Canada he would doubtless have joined the Canadian Journalism Collective that represents 2% of journalism but 100% of the brokerage deal with Google.

The reason that the Californian deal is a win, says Doctor, is because:

• Facebook is off the hook, so there is no news throttle and Californian news outlets continue to reach their audience on that platform.
• Local broadcasters get no money.
• 12% of the News Transformation cash is ear marked for news outlets with five or less journalists operating in underserved markets.
• A fund governance structure keeps mainstream news outlets in a voting minority.

Says Doctor:

The relatively low level of [financial] support, ironically, may address one of the concerns many of us have had throughout this process: Why should the state use its hammer — and taxpayer dollars — to support the financially driven companies (Alden, Gannett, McClatchy) that have disinvested in California local news? For a bevy of political reasons, no settlement or legislation emerged that effectively deprived them of funding; they, like the ethnic press and digital startups, will receive the same per-headcount funding, with no apparent cap. That still seems like bad public policy, but there’s where it landed.

In other words, less is more so long as corporate media gets less.

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The Facebook Swiss-cheese news ban continues in Canada. In last week’s post I noted that Facebook has not blocked a Telelatino News interview of Pierre Poilievre uploaded on August 23rd by the Conservative Party (it’s still up).

The news and information site Narcity has celebrated its “organic social” audience recovery only a month after Facebook reinstated its account. In the LinkedIn post graphic at the top of today’s blog, Narcity publisher Chuck Lapointe charts a full recovery of social media audience in a very short period of time.

An interesting visual on the left side of the graph is the precipitous decline of Narcity audience that occurred before the Meta news ban, consistent with long term trends for news publishers.

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Blacklock’s Reporter is appealing the Federal Court’s summertime ruling that Parks Canada violated no copyright or contractual rules by purchasing an individual subscription to the investigative news site and then sharing the paywall password with multiple employees.

The incongruous battle between the tightly paywalled news site and a federal government that spends nearly $100 million annually to support news journalism is described by Peter Menzies in an op ed published in the Globe and Mail.

The federal cabinet minister responsible for Parks Canada is Steven Guilbeault, a former Heritage Minister who sponsored the pre-legislative consultations on the Online News Act. The current Heritage Minister is Pascale St.-Onge. Possibly, the two are acquainted with the issue at hand.

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The CRTC just published its 2022-23 highlights of regulatory data, the kind of thing I live for.

The data is now a year out of date, so caveats all around. But I noted three items for future reference:

• Revenue for music streaming has plateaued. If that sticks, it will reinforce the transition of the global music streamers from prioritizing growth to making profit.
• Conventional television losses keep getting worse, 11 years running. The large television companies are in a 34.3% loss position (the small independents that receive local news subsidies from cable companies are in a 2% profit position).
• The overall market share for broadcasting across all platforms is approaching the symbolic cross-over point where Internet streamers earn more Canadian revenues than domestic cable operators.

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Cartt.ca has done a terrific job of reporting on Bell’s lawsuit against Warner Brothers Discovery and Rogers in the wake of WBD cancelling its content deals with Bell and Corus.

The story lede was that Bell has withdrawn its matching legal action against Rogers for scooping the highly profitable Discovery programming now that Rogers has disclosed that WBD had kept it in the dark about the key non-compete clause in the expiring Bell-WBD agreement.

The juicy stuff in the story is how WBD plans to lawyer its way out of liability by describing the non-compete clause as turning on the dissolution of the Bell-WBD legal entity governing their joint venture in Canada, not the continued availability of the programming rights to Discovery content. Presumably, WBD has no intention of dissolving the numbered company that served as the now empty bucket for content rights.

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