Small Media Outlets Open Up About the Devastating Impacts of the Online News Act

The Online News Act is continuing to rip apart news outlets. Some have spoken out – to varying degrees of awareness of what is going on.

There’s no question that the Online News Act is crushing the prosperity of Canadian news organizations. It’s not a surprise given that link taxes are a terrible concept to begin with. Yet, the quest for a free lunch outweighed all common sense as the Liberal government rammed that bill through anyway at the behest of lobbyists. While the attitudes of “consequences be damned” and “anyone criticizing the bill is a Conservative or Big Tech shill” got this terrible bill across the legislative finish line, the consequences of their actions was not a matter of “if”, but “when”.

Surprising no one paying attention, those consequences came. Facebook dropped news links back in early August and Google is expected to follow suit. This situation was long warned about even as the bill worked its way through the legislative process, but it was countered by lobbyists and government officials living in fantasy land when they said it was all just a big fancy bluff. Like pretty much everything else supporters have said about this new law, they were wrong about that too. In a follow-up, supporters also claimed that Meta wouldn’t last a week blocking news links because they depend wholly on news links to keep their businesses afloat (they don’t). Meta remained untouched and the news links blocking is continuing 4 months later.

At any rate, the damage caused by the Online News Act is already being felt. The Act has become the cause of 3 newspapers shutting down and, arguably, that will only be the tip of the iceberg in terms of damage it will inevitably unleashed onto the news sector. Engagement with Facebook pages for news organizations have collapsed as well. It was all highly predictable, yet people like us are supposedly the ones spreading the misinformation. It’s quite a world we live in when stating the blatantly obvious gets you labelled as a spreader of misinformation, but hey, as the quote from the Matrix stated, “ignorance is bliss”. Reporting on the reality of the situation has been anything but pleasant.

As the damage by the Online News Act continues to be felt, more small news organizations are admitting that they are feeling the squeeze. This comes from an extremely confused news article from the Reuters Institute. The article starts off by simply taking the government’s word at what the Act is about and not questioning it. So, we immediately establish that the person writing the article is both lazy and gullible. This especially given that the Canadian government has a multi-year track record of lying about the Act in the first place. Who are you going to believe in a debate? The one that has a long track record of blatant lies or the side that has been accurate all along? Apparently, the journalist took the side that lied in this case. The journalists choice, not mine.

The funny thing here is that the article went on to admit that the Act might make things worse (water is, indeed, wet):

The aim of Canada’s Online News Act was to bring some of the money that the news industry lost during the online revolution back into the pockets of news organisations. The government even calculated that Google and Meta have a combined 80% share of the CAD$14 billion online ad revenues seen in the country in 2022.

However, the new legislation may make things worse for Canadian outlets, and while public broadcaster CBC or legacy newspapers will unlikely suffer much due to their robust funding models and name recognition, smaller, independent publications are already seeing the impact of the new law.

Again, just blindly believing everything the government said even as the evidence mounts that things are falling apart. What is lost here is the fact that legacy media had a choice all these years. That choice was to either take advantage of the digital revolution, establish an online presence, and continually innovate and stay ahead of the curve, or, conclude and insist that this whole “internet thing” is just a fad that will go away on its own – this while continuing on with business as usual. It doesn’t take a genius to figure out that many media outlets chose the latter option to their detriment. In fact, this was showcased very recently with TVA choosing to broadcast harder in the face of the digital revolution even as they are forced to lay off a third of their workforce due to poor business decision making. Again, their choice, not mine.

In fact, the article even points out that there has been an enormous growth in digital startups in 2015. People are seeing hope that a startup is possible. As you can obviously tell, I started up Freezenet, so I would certainly qualify as a startup operating in Canada. I’m far from alone on this as I’m just one example, but there’s a pretty clear trend here. It’s why I say that when legacy media decides to snub the digital revolution, my default answer is that I hope it works out for you, but if it doesn’t, you only have yourself to blame.

In addition to this, it’s worth pointing out that the CBC is highly dependent on government funding. It’s why the CBC won’t really be threatened with bankruptcy in all of this. When the government cuts the checks in the end, the reaction of the CBC losing access to Facebook being either a shrug or a “that’s a pity” response is understandable. At the end of the day, they’ll still get their money one way or another, so why should they care?

Private legacy media giants will similarly not exactly fold under the pressure. The thing is, they will get hurt and the chances of cutbacks are pretty high when those internet dollars stop flowing. Still, they’ll make do without.

The problem here is that smaller players are invariably going to get choked out. That’s where I’ve personally been seeing the bankruptcies starting to take hold. A lot of smaller outlets are owned by larger companies and have been gasping for air for some time now. When things are good, the revenues get sucked out of the business. When times are bad, they are on their own. Other players are going to be equally challenged. They may not have that venture capital debt weighing them down, but they aren’t exactly rolling in millions, either.

So, it isn’t exactly a surprise that some of them are speaking out about the pain they are suffering under the Online News Act – even if they aren’t all that clear on the details of what is going on:

One of those small news organisations is River Valley Sun. When Theresa Blackburn launched it in 2019, her goal was to be an ‘ultra local news source’ for her community across the Western Valley of the eastern province of New Brunswick, along the Saint John river.

The outlet serves the approx 25,000 residents of the region, which spans between the rural towns of Perth-Andover and Nackawic. Starting as a monthly printed paper, Blackburn’s outlet became a daily news outlet during COVID-19 to cover all the developments of the pandemic to an underserved community. Its circulation is around 6,000 copies, distributed in 93 locations in the region.

The River Valley Sun didn’t even have a website, so their news articles were posted directly on Facebook. “Facebook helped us and gave us the space to put our stuff without having to spend the resources and the time in learning how to make a website, which I’m doing now, obviously, but Facebook allowed us to get our message out,” Blackburn says.

With a follower count of almost 19,000, Blackburn says their weekly engagement was quite healthy before the Meta blackout. Then, in early August, Blackburn saw their online traffic essentially disappear overnight.

“We’ve seen so many small newspapers and small radio stations and little outlets die horrible deaths before the government finally stepped in,” Blackburn says. “We have a situation where we in the news media have been decimated by the Googles and the Metas of the world and people are blaming the government, but I wish they would start blaming Meta because Meta has been taken [advertising money] out of our communities and never given it back.”

Uh, pro tip to Blackburn: the reason why people are blaming the government is because the fault rests entirely on the government – and by extension, the moron lobbyists pushing this bill in the first place. The government wrote a bad link tax bill. When it was debated, the government flatly ignored the warnings of experts and small businesses. When the platforms confirmed everyone’s suspicions by pointing out that their businesses do not, in fact, depend on news links, the government and stupid lobbyists insisted it was all a bluff. When the government passed the law, all the critics predictions came true and platforms began blocking news links. The Online News Act forced the platforms to make a sensible business decision. If you can’t (or won’t) understand that, then that’s not a people problem, that is very much a “you” problem.

What is even worse is the idea that the news organization in question posted all of their articles on Facebook, not even bothering with their own independent website in the first place. I can understand a single person operation trying to start a business by just growing an audience on Facebook, but after a while, you need to create your own website. It doesn’t have to be amazing, but it can be something basic so that you can further grow your audience and, more importantly, better control the intellectual property you are generating.

The very idea that this person grew a following of 19,000 and didn’t bother with creating their own website screams of being lazy. Yet, Blackburn is accusing Facebook of stealing the companies product. I hate to be the bearer of bad news, but by posting your stuff on Facebook like that, you gave Facebook your content. They stole nothing from you. This is basic critical thinking skills we are talking about here.

Others were much more measured with their response:

David Walberg is the Executive Director and CEO of Pink Triangle Press, a Canadian independent media organisation which publishes Xtra, a digital magazine focused on LGBTQ2S+ communities. Since August, they’ve also had a complete blackout on Facebook and Instagram for their audiences in Canada.

The magazine, which has over 56,000 followers on Facebook, has suffered massive declines in traffic. As of October, Walberg says that Xtra’s organic post impressions on the platform, which would have been in the many hundreds of thousands in a normal month, have dropped by over 75% whereas traffic referrals from Facebook users in Canada are down by 90%.

“We are a smaller publisher so we really rely on what we call “discovery” for people to find us,” says Walberg. “A lot of people who need the kind of information that we provide to the community may not know our brand name, so we really relied on Facebook in particular, but also increasingly on Instagram, for people to find out about us.”

Since the Meta blackout, Walberg says that Xtra’s traffic referrals from Facebook users in Canada have dropped by over 80%. “The internet has been a game changer for people in our community, particularly people who live in more remote areas, to connect with the community and to not feel alone in the world,” he says.

For some reason, the journalist writing the article started calling the news link blocking a “blackout”. It’s not the worst terminology I’ve ever seen – I mean, “news throttle” is a much more dumb term to use. Still, it’s bizarre that some outlets are allergic to the idea of calling a spade a spade. The platforms are blocking news links. I don’t know why this is such a hard thing to figure out for some journalists out there.

At any rate, Indiginews, a well known lobbyists for the Act, also noted the massive drop in traffic they are receiving:

The Meta blackout has also affected IndigiNews, an independent digital news outlet doing journalism for Indigenous people, by Indigenous people. Publisher Eden Fineday says that over 40% of their total traffic came from Facebook before the Meta blackout.

“In Canada, at least in my experience, a lot of Indigenous communities connect with each other on Facebook,” she says. “That just became the default way of connecting.”

IndigiNews Instagram analytics show they had 54.7% fewer accounts engaged in August 2023 compared to July 2023 which coincides with the blackout.

What the article ultimately highlights – albeit quite inadvertently – is just how much harm is being inflicted by the Online News Act. The smaller of the two major platforms affected by this is already causing this much harm as it is. In the extremely likely event that Google does the same thing, the harm is going to not only be greater, but serve as the second part of a one two punch for news outlets. The evidence laid out here isn’t at all surprising. The harm the Online News Act is currently inflicting on these outlets were predicted by people like us a long time ago. To the surprise of none of us, the harm is happening exactly as predicted.

So, the natural question then becomes, what can be done to reverse all of this? The solution is also equally obvious: rescind the Online News Act. Some supporters will respond by saying that this is an unworkable solution. To that, I say that, well, then maybe your business model is equally unworkable. Enjoy watching your business model go “splat” because you refuse to do the one thing that might remotely help your business out. Again, in that scenario, that’s a “you” problem.

Until the government finally comes to their senses, bankruptcies and loss of revenue and traffic will continue to be a running theme for media outlets all over Canada. In the mean time, we’ll continue to see the media companies either realize how screwed they are or continue punching themselves in the face. Unless change happens, the harm will not only continue, but get much worse in the weeks and months ahead – and there will be no winners to show for it.

Drew Wilson on Twitter: @icecube85 and Facebook.

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