Canadian media organizations face difficult challenges in an age of virtually unlimited Internet competition, a dramatic shift toward digital advertising, and an unprecedented global economic and health crisis. That has led media groups to urge the federal government to “take on” Google and Facebook by requiring them to fund local media. Prime Minister Justin Trudeau has thus far declined to do so. That may spark criticism in some quarters but claims that government-mandated payments from Internet companies will solve the sector’s ills are unconvincing.
My Financial Post op-ed notes that everyone agrees the media sector is more competitive than ever. News organizations such as the New York Times and Washington Post, digital media companies like The Athletic and The Logic, podcasters competing with mainstream media audio offerings and the CBC’s continued digital expansion all offer compelling and competitive news alternatives. This breadth of choice for Canadian news consumers isn’t the fault of Google or Facebook. It is a reflection of low barriers to market entry and a proliferation of services that often do a better job than many established media companies of serving specialized content.
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The Canadian government announced plans last spring in Budget 2018 to support local journalism with a $50 million commitment over five years. It indicated that the money would be allocated by independent, non-governmental organizations to provide support in under-served communities. Last week, the federal economic update included several additional measures to support the media sector, including the prospect of charitable donations to non-profit journalism organizations, a refundable tax credit to support labour costs for news organizations, and a non-refundable tax credit for Canadians that subscribe to Canadian digital news media. While the new funding has attracted considerable commentary (my take here on why there are problems but the proposal is better than Internet taxes or other cross-subsidization models), somewhat overshadowed was an update on the initial $50 million commitment.
The update indicates that the money will be invested in “open source” news content that will be available under a Creative Commons licence:
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Canadian Heritage Minister Melanie Joly does not plan to release her digital culture policy plan until September, but the pressure to address the financial challenges faced by media organizations increased last week with the Standing Committee on Canadian Heritage report (the same report that recommended an Internet tax that was swiftly rejected by Prime Minister Trudeau) and a proposal from News Media Canada that seeks hundreds of millions in annual government support. The recommendations don’t end there: copyright reform, tax changes, and amendments to government advertising policies are all part of the proposals to provide support to Canadian media organizations.
Andrew Coyne’s must-read column persuasively argues against a media bailout, noting the dangers of permanent government funding of an otherwise independent media. He rightly argues that if funding is established, it isn’t going away as government will be reluctant to allow funded media organizations to fail. Further, Ken Whyte, former editor-in-chief of the National Post, openly acknowledges in a Twitter stream the constraints that come from criticizing government when funding or regulation is at stake.
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The ongoing financial struggles of Canadian businesses that have traditionally delivered the news – particularly newspapers and local broadcasters – have generated considerable discussion and consternation over the past month. With significant layoffs, newspaper closures, and testimony before Canada’s broadcast regulator that the cost of delivering local news is unsustainable, there have been mounting calls for new funding programs, studies, or other measures to address the issue.
My weekly technology law column (Toronto Star version, homepage version) notes that much of the commentary emphasizes the critical link between a strong, independent media and holding governments at all levels to account for their actions. While there is little debate over the essential role of journalism, the tougher question is whether emerging digital alternatives can provide an effective substitute.
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Many have pointed to it, but Clay Shirky's piece on newspapers, journalism, and the current upheaval is an absolute must-read.
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