'Rewarding investment in the newsroom is the fair way to go'

Following the leaders sharing insights on building an ideal relationship between tech platforms and news publishers in rebuilding the business of Journalism, Paul Deegan, President, and Chief Executive Officer of News Media Canada represented the voice of print and digital media in Canada.

He mentioned that there are many small and large publications currently active in Canada and some of them are literally very small enterprises that are producing newspapers that serves a community of 1200. Now they are moving from very large to very small. In scenarios like such, Independent press and trusted journalism become vital to democracy. He added that there needs to be an understanding that being a publisher comes with a level of responsibility to readers, and that reporting is honest, it's accurate, it's fair and it's balanced.

He said: “The business model has been disrupted. To give a sense of Canada on sort of revenue decline, for newspapers, revenue probably peaked a decade or so ago at about $5 billion today. And in that same time, the revenues for Google and Meta in Canada would have gone from, a billion dollars or so ten years ago to roughly $10 billion today.  We've obviously seen it in India as well, but the revenue has not rebounded from the pre-pandemic level. So that's been a real problem, especially for a lot of our print titles. I think competition authorities around the world are coming to terms with the dominance of Google and Meta in the ad market, but not enough has been done to address it.”

Deegan said that the power imbalance between the platforms and the publishers is huge. "The combined market cap of Google and Meta has been going down, in particular on the Meta side, but it's about three-quarters of Canada's annual GDP.”

He further mentioned how Google and Meta started doing content licensing agreements with publishers and they are picking winners and losers, which has created a situation of haves and have nots among publishers.

"And they are at a point now where they have got a lot of publishers that are left out in the cold, and that's obviously not healthy for the media ecosystem overall. What the legislation does is it allows us to negotiate collectively. And currently, their competition laws would bar them from forming a collective," he pointed out. 

Deegan also emphasised that the power imbalance notwithstanding, publishers will be in a better bargaining position if they stand together: "It also includes an enforcement mechanism of final offer arbitration, ensuring that all parties put their best offer forward and then the arbitrator picks one or the other. And it's that hammer of arbitration that really incenses both sides to reach a fair settlement on their own.”

To make sure everyone is benefitted equally, the National Ethnic Press and Media Council is built to satisfy everyone’s needs and be fair to everyone. He said, “Each publisher will submit to a law firm or an accounting firm on sort of a black box basis. Their investment in the newsroom, salary and wages will take that. Whatever we can negotiate from Google and Meta will then basically divide that up on a pro rata basis. We're rewarding investment in the newsroom and we think that's really the fair way to go. This is very good legislation, which can also be made better. And there's this process that I referred to in terms of the Heritage Committee in the House of Commons. They're going through that right now. We've proposed a number of amendments to the bill. The legislation right now really only applies to those publishers that have two or more arms length employees.” In the closing remark, Paul said “The immediate urgency of maintaining the standards of journalism has become important.”