Canadian law meant to support local journalism brings mixed results

A bill in the Oregon Legislature would set up a structure for social media companies to compensate local news producers whose content is shared on those sites. SB 686 is based in part on bills in California and New Jersey, as well as a law that recently went into effect in Canada.

It was meant for the largest social media companies to compensate local news media organizations whose content is shared on the platforms — thus supporting news outlets, many of which have seen advertising revenues plummet. But the law has had some unintended consequences, including Meta simply deciding not to allow news to be shared at all in Canada.

Joining us to talk about the law’s intentions, its unintended consequences and possible solutions is Ryan Adam, formerly the vice president of government and public relations for the Toronto Star. He led efforts to pass the country’s Online News Act, also known as the C-18 law, and testified in Salem in April about Canada’s law. OPB is among the news media organizations that testified in support of the Oregon bill.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. A bill in the Oregon Legislature would set up a structure for social media companies to compensate local news producers whose content is shared on their sites. Senate Bill 686 is based in part on bills in California and New Jersey, as well as a law that recently went into effect in Canada.

Ryan Adam joins us now to talk about what that Canadian law has actually meant. He was formerly the vice president of government and public relations for the Toronto Star. He also worked for Prime Minister Justin Trudeau from 2017 to 2019. He led the effort to pass his country’s Online News Act. Ryan Adam, welcome to Think Out Loud.

Ryan Adam: Thank you so much for having me.

Miller: I should say before we start that OPB is among the news media organizations that testified in support of the Oregon bill, but we are gonna really here be focusing on Canada’s law and what that has meant. What was the idea behind Canada’s Online News Act? What was the problem it was intended to solve?

Adam: Well, certainly – and I don’t think this is isolated to Canada – the shrinking of newsrooms across the world has become a huge global challenge. Just for your listeners, the way budgets work in a newspaper or a news organization in the past, at least as of 15, 20 years ago was primarily driven by advertising. So you looked at your bottom line, it was probably in some cases, 80% advertising revenue and 20% subscriptions revenue. With the advent of the internet, obviously in the kind of early aughts and and progressively into the ‘10s and ‘20s, obviously that number has only increased, frankly. But the idea is that the content that news organizations, which is fact-based, which is triple-source, which is, in a lot of ways, a legally defensible, became a huge premium for some of these search engines driving a lot of views, a lot of clicks, and ultimately became a huge untapped source of kind of advertising revenue for these platforms.

So the idea behind the Online News Act … and honestly it was based on work that our colleagues had done in Australia to assign the content value and to encourage these large tech platforms, many of whom are in the top 10 largest companies in the world, to enter into content license agreements with the kind of publishers, local, ethnic, multicultural, large and small, to sort of compensate them for the good hard work that they’re doing. Because essentially what is happening is that the content has extreme value to them.

I think folks online are looking for real fact-based journalism more than ever, but the reality is that Google and Meta subsequently don’t employ any journalists. So as the revenues from advertisers went primarily to Google and Meta over time, newsroom costs stayed the same or even increased. So in order to keep up with the dollars and cents of running a news organization, a lot of layoffs were occurring. And as the layoffs were occurring the sort of coverage, the beats, if you will, started to be diminished.

So the idea behind this was to assign a value for the content, to encourage these platforms who benefited greatly from sharing this content, encouraging them to enter into the content license agreements and to essentially stabilize the news media industry that went through a huge period of transition, as a result of the internet.

Miller: In a sense, to boil this down, the basic idea here is that these platforms are making a lot of money. This is your argument from the eyeballs that are being attracted by the news content on their sites and that news producers should get some of that money. Is the basic problem here that people are not actually going to those sites? They weren’t going to Toronto Star or, say, some American newspaper or a local paper, that instead they’re just seeing a synopsis on Instagram or via Google as opposed to taking their eyeballs, which would lead to more ad revenue to the journalism sites themselves?

Adam: Correct. So the idea at the beginning, I’m sure for most publishers – I don’t want to speak for all publishers because who knows where their heads were at at the time – was, if we put our content online, more people will see it and advertisers will be more inclined to give us more revenue in order to access some of this information. But that hasn’t necessarily borne out. I mean, what you see when you go to Google today is a drop down window below the search bar that allows essentially folks to access the information provided from any given article without flowing through or clicking through to the actual home site on which the content is provided.

So when you get into ad tech conversations, which are very complicated … I’m not gonna regale you with all of that at this moment. But this idea that more eyeballs for more publishers will equal more revenue, I think, is largely changing because of the way that Google and Meta have have operated their advertising strategies …

Miller: And instead of trying to create some kind of major structural tech fix that would bring eyeballs, bring clicks back to journalism sites, the basic idea here is, well, instead, let’s actually just turn this into a monetary transaction. If you’re gonna have versions of our articles that are not drawing people back to our site, at least give us some money.

Adam: Correct.

Miller: How much money are we talking about? I mean, is it even possible to know how much money Google or Meta, through Facebook and Instagram, are making directly from the work of journalists?

Adam: So, the online advertising pool in Canada in 2023 was $12 billion. Obviously, not all of that is allotted to journalism or what have you, but it is pretty important to sort of set our eyes on the scale of the advertising budgets that journalism is essentially missing out on as of now.

Miller: Wait, but that’s everything, the complete tally of online advertising?

Adam: Yes, in the era before news got published on the internet, the totals were more like $3 or $4 billion, but that was sprinkled throughout multiple publishers, throughout multiple kinds of outlets, whether it be broadcasters who publish news online or radio or other things. So, to us, we conducted a study in Canada in 2023. We assigned a content value for news media publishers – just the publishers, not the broadcasters or the public broadcaster – at around $500 million per year. That is sort of the net loss that we had been experiencing as an industry.

Miller: What do you see as the benefits and the maybe unintended consequences or drawbacks from the rollout of this law in Canada in the last couple of years?

Adam: Well, let me start with the drawback. So the clear and obvious drawback is that Meta, a parent company of Facebook, has essentially banned news on their platforms. Now, it’s important to note that Meta has multiple platforms. They have, obviously, Facebook. They also have Instagram and they have Threads. So basically what we’re talking about is they have banned the use of news links on their platforms ever since this bill has gone into play. That has had, I believe, a meaningful impact on small and local publishers. However, we are starting to see audiences migrating online to other platforms to access news. So it has not been, I think, a very, very difficult situation. It’s been simply a difficult situation.

So, to me, the access to news through Meta’s platforms is the obvious drawback. But the positives to me are that we’re having a conversation about the value of content in a way that has never been done before. And you and I have been talking now for a number of minutes, and we haven’t even spoken about the use of AI, and the value of news media and fact-based journalism, to the AI models that a lot of these same companies are implementing. So …

Miller: I do want to get to that before we say goodbye. We’ve got three minutes left. So let’s actually go there right now. Does that change everything? Does generative AI make it so Google and Meta wouldn’t even need to rely technically on legacy journalism? They can, in clever ways, maybe hard to even define ways, just gobble that stuff up and then spit back out stuff that they say is theirs and then not even have to get money for it?

Adam: Yeah, I actually think it’s the exact opposite. I actually think that the content that news publishers produce, which is daily, fact-based journalism, is even more important to AI companies. So, yes, of course there are, as you call them, clever ways to access that information in ways that they may think they may not have to pay for. There’s another word for that, by the way, that I won’t use, but …

Miller: It would be up to a court to call it theft and so who knows how … but yes, I take your point.

Adam: Yeah, but the idea to me is that in order for these models, these AI platforms to be up to speed, current, fact-based, and produce end outcomes for the users that are helpful in our everyday lives … which I’m not anti-AI in any way. I think AI is going to help our societies in many immeasurable ways moving forward, but I just think that the folks that are producing fact-based current content, that content is gonna have even more value to them. So even more incentive in my opinion for them to enter into licensing agreements with those good hardworking journalists that actually produce that fact-based content on a regular basis.

Miller: It’s fine. I can tell you even just today, I was checking an hour ago to see if I had your title right. I put in your name and a title at the very top of the Google searches, it spit back out what your title was, based on … Google had already scraped what we had written and published as a preview for this conversation. And it said, according to OPB, Ryan Adam is this and this.

So, you’re saying that Google should have to pay, in this case, OPB or journalists for the information that it was providing to its users?

Adam: Correct. Think about all the information that was required to gain access to my title or my name, like someone had to email me, someone had to look at my LinkedIn profile, someone had to do the due diligence and make sure I am exactly who I say I am, etc. etc., in order for an algorithm to just scrape it in a nanosecond. Like that to me is further evidence that real journalism requires real people to do real work and that has value to those platforms.

Miller: And just briefly, you’re not worried about platforms like Meta or, say, if Google were to follow suit, saying fine, then we won’t link to you at all?

Adam: I do think there is a larger conversation to be had about what we call fair use or must-use provisions in some of these laws that are coming down the pipe. I mean, we need to start thinking about some of these platforms as social utilities. As far as I’m concerned, it’s similar to power, water, etc. etc., so from my perspective, some of these companies are being quite irresponsible by blocking some vital information. They did block, for example, in a Canadian example, during the wildfire season they were blocking news. So to me, that’s detrimental to the public safety, for example.

So in my perspective, and further to this law, I think as long as these platforms assign a value to the content and they’re able to compensate the folks who produce that content, the industry will survive and even thrive.

Miller: Ryan Adam, thanks very much. That’s Ryan Adam, former vice president of government and public relations for the Toronto Star.

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