Canada will become newsless
The big news? The Canadian government has passed into law Bill C-18, also known as the Online News Act.
In the words of the government: 'This enactment regulates digital news intermediaries to enhance fairness in the Canadian digital news marketplace and contribute to its sustainability. It establishes a framework through which digital news intermediary operators and news businesses may enter into agreements respecting news content that is made available by digital news intermediaries. The framework takes into account principles of freedom of expression and journalistic independence.'
Even though the bill covers generic 'digital news intermediaries', it is specifically targeted at Google and Facebook. (It only shows you how irrelevant Twitter and Bing are.)
Both Google and Facebook have threatened that they will remove any trace of Canadian news from their respective websites and adjacent products.
Both companies made the same threats in Spain and Australia. In Spain the local publishers disappeared for 7 years. In Australia, the deals were struck faster.
When this discussion happened in Australia, yours truly wrote this: 'Governments are after you. They like nothing more than to show how good they are at punishing bad actors (with the exception of themselves). It helps politicians win re-election. As much money as you have, you are vulnerable. Australia will be a test case - and the first of many.' and 'Create transparency with your algorithms and pay your share to authors who helped you to make your billions.'
And for the record, Google submitted its brief to the Standing Committee when the bill was discussed, where it explicitly stated 'we support the concept of a fund model ... A fund could follow established and known models like that of the Canadian Media Fund ... in accordance with predictable and transparent formula ..'. Google doesn't have a problem with paying.
I am sure that you, my dear reader, have a strong opinion whether Google and Facebook should or not be paying the news publication. That's not the topic for today.
Based on the urgency and language in the bill, you might think that this is something new. But it seems like the Canadian government has been preparing for many years, trying to soften the inevitable hit to the media industry. According to News Media Canada, the industry association, the federal government is providing various financial assistance programs and tax creditsto support the industry.
When reading the justifications for various government programs, you see words like 'overcome market disadvantages' or 'business model'. What business model are they trying to protect?
Before the Internet, newspapers, radio and (cable) TV had a monopoly on news.
The barrier of entry was gigantic. If you wanted to start a newspaper, you had to hire reporters and columnists. Then you needed a team which could prepare the news for print. Once it was printed on expensive machinery, you needed a distribution network to get the paper to all your subscribers and retailers. All that was funded by expensive ads. That was the marketing channel for many companies and newspaper organizations knew it. Money was good.
Then came the Internet and completely destroyed this structure. At the beginning, news organizations saw the Internet as curiosity and since the traffic was minuscule, an office hobbyist was assigned to build the website and publish all the news there for free. But then, slowly and surely, things changed, people started reading news online. And because it was free, why would anyone pay for a newspaper? To increase traffic to the news sites where people could read for free, websites were built to be optimized for the search engines and shareable on any social network. They were feeding free content on their own accord. They tried to replicate the old model online with ads.
When you look at the industry, you see the apologue of the boiling frog. The world moved on. The newspaper industry didn't. (Actually, that’s not entirely true. To name a few: The New York Times, The Wall Street Journal, Financial Times, The Economist and some are over 100 years old, there are publications which are thriving. However, these are the exceptions that prove the rule.)
For over 20 years, the vast majority of news publications had a chance to change their business model and its content delivery. They didn't. Now they want the government to keep them in business. And everyday it will get worse for them because the smarter one will make them obsolete. They will become a non-recurrent pattern, with or without government help.