Why the Link Tax (Bill C-18) Would Never Have Saved Sing Tao’s Print Newspaper

The CBC recently published an article about a closing newspaper. While Unifor suggests that C-18 would have helped, there’s no evidence of that.

More propaganda is being pushed to sell Canada’s link tax legislation (AKA Bill C-18). The latest push is exploiting the shuttering of Canada’s largest Chinese language newspaper, Sing Tao. Reports suggest that 83 people are getting laid off as a result. Still, the paper isn’t going away entirely. Instead, they are going digital only.

The report comes out of the CBC which notes that older readers are increasingly becoming comfortable with digital only news. Indeed, this shift has been a long time coming as older generations are increasingly the last members of the audience still even remotely interested in physical newspapers. So, it probably isn’t a surprise that the newspaper made this shift in the first place.

It’s a logical decision that makes sense, it seems that a member of Unifor is trying to latch onto this story by arguing that Canada needs Bill C-18 (it doesn’t). From the CBC:

Carleen Finch, president of Unifor Local 87-M, the union representing 43 of the 83 laid-off Sing Tao workers, says staffers were “completely blindsided” by the move.

“I think to them it was a huge culture shock,” she said. “I think that many of them believed that it would eventually happen but they never thought it happen this early.”

Finch is concerned the end of the print edition will leave some readers behind.

“I realize the company seems to think that the younger generation are using their phones, but I think there’s still a very large generation out there that like to have that tactile feel of a newspaper and want to find out what’s going on in their local communities,” she said.

The problem with these comments is three-fold. First, the news organization isn’t closing entirely. Second, the newspaper already got through explaining how half of their senior audience has become accustomed to reading the news articles online, so the organization is simply adapting to an increasingly digital environment. Third, the attitude that it’s just younger generations using phones and that nothing beats the tactile feel of a physical newspaper is also the very attitude that is ultimately killing a lot of news rooms.

Numerous news organizations simply refused to believe that the internet was ever going to take off. When the audience increasingly migrated over to the digital environment, many still stubbornly refused to believe that there was anything to this whole “internet thing”. So, a number felt that the loss of readership would be temporary until the internet fad finally faded away. Obviously, that never happened. So, as the readership continued to slip, rather than get a decent web presence, some simply proclaimed that the physical newspaper will be a medium that will never be beat and pushed the physical paper. Eventually, a number found themselves surprised that they were wrong on that unbeatable gut feeling and saw people packing up their boxes as the company folds.

It’s one thing to simply proclaim that you are never going to abandon the physical newspaper as a business. As long as that business can find a way to make it work in a business sense, then no one is stopping them. However, if that business clings to this outdated model and rides it into bankruptcy, then really, that business owner has only themselves to blame because the signs of where things are going were ridiculously obvious for well over a decade and a half now.

It was then that we see a sell job of Bill C-18:

Finch says the shuttering of the print edition comes during a challenging time for media.

Bill C-18, which would make tech giants such as Facebook and Google pay for reusing news produced by professional Canadian news organizations, has stalled.

When it announced Bill C-18, the federal government said the legislation would ensure Canadians have access to quality, fact-based news at a time of rising disinformation and public mistrust.

“We have to as Canadians start to support journalism and local media and make sure that we are following through on making our voices heard,” Finch said.

It’s unclear who said that second paragraph – the CBC or Finch – but regardless, it is simply wrong. Social media platforms and aggregators aren’t actually “reusing news produced by professional Canadian news organizations”. What they are offering are links and snippets – posted on their platforms at the direct requests of the publishers in question. Further, Bill C-18 demands payment for not just linking, posting snippets, or thumbnails, but also merely “facilitating access” to news. This can include, but not limited, referencing that news organization, linking to their home page, or even merely mentioning that news organization by name anywhere on the site.

As for the third paragraph, the Canadian government is free to proclaim that Bill C-18 would somehow help the fight against disinformation, but the actual effect is that smaller, independent news organizations would get further choked out of the process – pushing them off that financial edge when they discover that it costs money to form cartels to negotiate a link tax with aggregators and platforms. If anything, the legislation would only really help the largest publishers in the business get a forced market advantage.

Further, Google rightfully pointed out that Bill C-18 could very easily be used to fund misinformation campaigns. We re-examined the legislation and concluded that those running troll farms and state sponsored misinformation campaigns can very easily exploit the law for their financial gain. So, if anything, Bill C-18 would make online misinformation worse, not better.

Taking a more wider look at these arguments, one question comes to mind: would Bill C-18 made a difference in the closure of the physical newspaper part of the business? Probably not. After all, the business owners already noted how there is a general movement towards digital only markets, so if Bill C-18 actually somehow passed before the Summer break, the legislation would never had made a difference. There’s just too little time between a theoretical passage of the legislation and today. It was going to happen passage or no passage.

A counterargument might be that Bill C-18 might be able to somehow save other print outlets out there on the verge of going under. The major problem with that is that large tech giants like Google and Facebook have little to no part on the print operations of these publications in the first place. At the end of the day, if you, as a business owner, have a print operation that is increasingly unprofitable, and an online presence that is generating more revenue, there is going to be a point where it makes no sense to keep printing newspapers no one is even going to read.

You could get a massive influx of cash from Google and Facebook coming your way and it will never move the needle in saving print journalism. It just makes going digital only more attractive – if it has any net benefit at all. At the end of the day, many of these outlets are businesses. If it costs money to produce a product, you are going to need a return. If that return is not attractive, then the fat gets cut. No amount of throwing money at this is going to make a difference on that.

A follow-up argument might be that Google Adsense pays mere pennies on the dollar and it isn’t financially viable. First of all, no one is saying that Google Adsense is the only way digital only websites can get advertising. Many businesses online swing their own deals with advertisers and news outlets have been doing that for decades now. Second, if you are still sticking to Adsense not paying enough, then maybe the country should have a conversation about this. I’d be on board with that given that I know all too well about the accusations that was sparked by Project Bernanke. The thing is, Bill C-18 utterly and completely fails to address this, let alone begin to solve that problem.

Some might argue that such a debate can be handled later and that the link tax might be a good temporary solution for the shortfall the media is experiencing more immediately. That might have been a promising argument a few months back, but not now. Already, Facebook has notified publishers in the US that they will no longer be paying the link tax. After looking internally the prominence of links to major news outlets in their main feeds, a study found that this took up a mere 4 in 1,000 posts. These are signs that the free ride is already coming to an end. There is every reason to believe that Facebook might eventually move to do the same in other countries as well.

On so many levels, it’s hard to see how Bill C-18 would have changed the situation here, let alone the situation of other news print operations. There is simply no logic here if your goal is to get companies to print more newspapers. You are pushing a product that increasingly few people even want in the first place. This is a problem that is only going to get worse. No amount of throwing money at this is going to make a difference. Additionally, the move away from paying for links should signal that this push for such laws is going nowhere fast. What’s more, even pushing for laws to force platforms to link to news organizations is simply unconstitutional in many countries and would be a very tough sell in Canada at best. There’s good reason to believe that most judges would be skeptical about a law that contains compelled speech.

Yes, it may be sad to see another print operation shuttering operations. At the same time, though, readers and employees saw this one coming. It was not a matter of if such a decision was going to be made, but when. Pushing Bill C-18 in response to this story is just nonsensical from our perspective.

Drew Wilson on Twitter: @icecube85 and Facebook.

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