Canada’s new media bargaining policy is finally forcing Google to pay news publishers for its online use of their stories. This is a great step forward in the global effort to address unfair use of news content by dominant tech platforms, and stabilize news outlets that are essential to civic engagement and democracy.
It extends Canada’s leadership in pursuing a multifaceted strategy to save local news and should help advance similar policies under consideration in California, Congress and in other countries.
But it’s not quite time to raise a Labatt’s.
Under the tentative deal announced by the Canadian government on Nov. 29, Google will pay publishers $100 million Canadian annually.
That sounds like a lot but it’s much less than the $172 million the government anticipated when its Online News Act passed in June.
An economist who recently analyzed what Google and Facebook parent Meta owe news publishers in the U.S. told me a more fair payment would be in the range of $750 million Canadian.
“The optimist in me says we’ve moved from the point where Google refused outright to pay anything, and now they’ve decided to pay $100 million, but this is way less than they should,” said Haaris Mateen, an assistant professor of finance at the University of Houston.
Mateen co-authored a November study that estimated Google owes U.S. publishers $10 billion to $12 billion annually, and Facebook $1.9 billion, for the value news adds to its platform.
Their study estimated 17.5 percent of Google’s search ad revenue should be paid to news publishers. It estimated the value of news-related searches and value that news adds to its properties, then split that 50-50 with publishers.
Canada’s agreement caps payments at 2 percent of Google’s approximated revenue in Canada, down from 4 percent originally envisioned.
If the U.S. adopts a similar formula, under the Journalism Competition and Preservation Act proposed by Sen. Amy Klobuchar, D-Minn., publishers would share around $1.4 billion in payments from Google, he said.
How extensively these deals benefit newsrooms hemorrhaging jobs depends on the details, including final language of the Canadian policy coming later this month.
One big question: How much will go to broadcasters and state-funded public media and how much to “traditional media” like newspapers and digital news sites?
This dynamic is at play in Congress and California, where policymakers are hearing opposition from coalitions representing hundreds of smaller and digital outlets, even though the legislation will help thousands of local newspapers survive, preserve tens of thousands of jobs and build sustainable businesses online.
As Canada’s policy crystallized, Facebook in June blocked news on its Canadian sites and Google threatened to follow suit.
The bluff apparently worked again. Criticism grew and the government lowered the payment requirement to appease Google at least.
Despite the questions and rancor, Canada’s measure is welcome progress. It further affirms that dominant tech platforms can easily afford to fairly compensate news outlets, giving elected leaders a straightforward way to help save local journalism.
While this isn’t a silver bullet, when combined with Canada’s other policies to help save local news, particularly a tax credit for newsroom jobs, “that is going to make a very meaningful difference,” he said.
Then you really are talking about saving journalism and all the benefits to communities and governance that entails.
Paul Deegan, CEO of the News Media Canada trade group, said the combination of tax incentives and compensation by tech platforms is expected to end layoffs in the news industry and spur reinvestment, which would then boost subscriptions and ad sales.
“I think between the two, this finally gives us stabilization,” he said, “but it goes beyond stabilization. It’s getting us on the footing that we can invest back in the newsroom … that’s really what we want, we want them to invest in their newsrooms, hire journalists, create content, hold the powerful accountable.”
Brier Dudley is editor of The Seattle Times Save the Free Press Initiative. Twitter: @BrierDudley.
