The last two weeks have seen a financial bonanza of epic proportions showered on newsroom operators across Canada.
The mana from heaven began with the Fall Economic Statement. Buried in its voluminous analysis of the country’s growing debts and deficits were a few lines of text that increased, by more than a hundred million dollars, the government’s already multi-hundred-million-dollar scheme to directly fund journalists. With a stroke of her pen, the finance minister topped up the per journalist wage subsidy to $29,000 for every “ink-stained wretch” making a cool $85,000 a year.
Then, not a week later, Google and the government announced their joint climbdown over the Online News Act that would have forced the world’s largest online platform into a binding arbitration process to “compensate” news providers for their content. In turn for being able to arrange its funding through a single association representing all eligible news organizations in Canada, Google has agreed to contribute $100 million annually to the production costs of news content. A back-of-the-envelope calculation suggests that if this subsidy is distributed based on the current headcount of newsrooms, news organizations could receive in theory a further $12,500 in direct subsidy per journalist from Google.
So where does this flurry of new subsidies leave the Canadian news industry?
On the positive side, it means Google isn’t going to purge its platform of news content. This would have been a horrible outcome both for Google users looking for more, not less, accurate news and information and for news outlets who could well have seen the traffic on their website drop by as much as half. In such a scenario the advertising revenues that news providers generate on a cost-per-click basis would have plunged precipitously setting off a doom loop for the industry and no doubt more calls for more direct government support.
More worrying, these announcements likely push the newsrooms of print and digital news providers (think The Globe and Mail or Toronto Star) to the point where fifty percent of the staff costs of their news operations are funded by direct and indirect government supports.
This represents a full doubling of the pre-FES status quo, an amount that arguably warrants a sustained public debate about the threat that these large subsidies represent to the independence of news organizations. It simply will not be credible to readers and viewers for editors of mainstream news outlets to puff their chests and assert that journalistic standards insulate them from the results of their owners’ conspicuous rent-seeking.
The source of the subsidies matter. These monies are coming from arguably two of the most powerful groups in society today: Big Tech and big government. For news outlets to argue that we ought to take them at their word that they will hold these behemoths to account when half or more of the salaries of the very reporters they assign to cover the federal government and Google will be paid for by the very same is a jaw-droppingly audacious contention.
It is important to acknowledge the public opinion backdrop against which these extraordinary industry supports are being extended. As Richard Stursberg wrote yesterday for The Hub’s Future of News series, our collective trust in the media is in free fall. Only 39 percent of English Canadians trust most news most of the time, down from 58 percent only five short years ago.
Without public trust, it is not clear what news will in fact become. Arguably in an era where “The News” isn’t invested with some kind of shared belief that it is more often than not factual, unbiased, and in the public interest, it simply becomes information, open to endless contestation, debate, and deconstruction. This demonstrably isn’t what a deliberative democracy like ours needs to thrive.
In the last two weeks, thanks to significantly increased direct and arranged government supports, we have taken another large step towards an information dystopia. We have done little to anything to address the implications of declining public trust in the news. Other ways to support journalism have been largely ignored. The news industry seems mostly disinterested in these issues and ever more focused on government subsidies.
The Hub is committed to continuing to debate what is happening to journalism in Canada and put forward alternative solutions and ideas. This is a hugely challenging public policy issue. Real thought and attention focused on this problem is urgently needed. Richard Stursberg provided a novel idea yesterday (i.e. news outlets should break up with social media), and Peter Menzies last week provided a series of constructive suggestions as to how to rethink government support with the idea of weaning the press off direct subsidies.
We will keep reform-minded ideas coming via our Future of News series, and hopefully a certain government in waiting is paying attention, because this policy challenge isn’t going away and issues that are at the heart of our democracy are in play.