Content media

Big Tech content licensing deals have left smaller publishers out in the cold

During the 2021 federal election campaign, several political parties pledged to introduce legislation on journalist compensation.

Why is such legislation necessary?

First, the need for strong, independent local news has never been greater – it keeps communities connected and informed about the issues that directly affect them. Covering city hall, provincial and territorial legislatures, our courts and holding parliamentarians to account is essential to our democracy.

Second, there is a significant power imbalance between the tech giants and the Canadian media. To put that into perspective, Google’s market capitalization is around $2.3 trillion; Meta (Facebook) is more than half a trillion. Together, that’s more than the GDP of Canada, Brazil, Italy or India. Together, these companies derive online advertising revenue of more than 80%. And the pandemic has only made the situation worse.

Third, in anticipation of Canadian legislation, Google and Meta have negotiated content licensing agreements with a dozen news publishers, including big players like the Globe and Mail and the Toronto Star. These publishers should be paid for their content. But we now have a haves and have nots situation among Canada’s news publishers, with Google and Meta picking winners and losers. And it’s not fair, especially for many small publishers who have been left behind.

In April, Canadian Heritage Minister Pablo Rodriguez introduced Bill C-18, the Online News Act. Our organizations, which represent hundreds of trusted news titles in every province and territory, support this legislation for three reasons.

First, it allows us publishers to come together and bargain collectively. Currently, the Competition Act prohibits us from forming a collective. Given the overwhelming power imbalance, we will be in a stronger negotiating position if we stick together.

Second, it includes an enforcement mechanism. Baseball-style final offer arbitration ensures that the parties present their best offer and the arbitrator chooses one or the other. The arbitration hammer encourages both parties to reach a fair settlement on their own.

Third, similar legislation in Australia works. According to Rod Sims, the former chairman of the Australian Competition and Consumer Commission, the amounts paid to news organizations amounted to more than $200 million. More important than how much is who entered into content license agreements. Country Press Australia, an affiliate of 160 small regional newspapers, was able to strike deals with Google and Meta. More recently, a group of 24 small Australian publishers struck a deal with Google. To its credit, Google has signed a content license agreement with every eligible Australian publisher.

While collective bargaining offers clear benefits to publishers, there is still a big question to answer. How should the members of each collective organize themselves in an inclusive, fair and transparent way for all its members?

News Media Canada and the National Ethnic News and Media Council of Canada believe that publishers large and small should benefit equally from any settlement, based on their proportional investment in newsroom employees. Simply put, any settlement resulting from collective bargaining would be shared among the editors on a pro rata basis – based on their total wages and salaries paid to eligible newsroom employees.

Bill C-18 builds on the success of Australia’s News Media Bargaining Code. While not a silver bullet, it provides readers with the value of reliable, high-quality Canadian journalistic content through more licensing deals, which will allow more publishers to reinvest in their newsrooms and digital business transformations.

Paul Deegan is President and CEO of News Media Canada. Maria Saras-Voutsinas is Executive Director of the National Ethnic Press and Media Council of Canada.