The Challenges facing Print Media: Is Copyright Reform part of the Answer?

This year Canada is required to review and potentially update its copyright legislation. The passage of the Copyright Modernization Bill in 2012 included a statutory five year review. That formal review has not yet begun—it is scheduled to start in late fall—but in the meantime other work that could impact the review of copyright law is taking place. Among these are the cultural policy review that Heritage Minister Melanie Joly has committed to undertake, and a review on media industries, conducted by the Parliamentary Standing Committee on Canadian Heritage.

The Standing Committee held hearings over several months on the state of the Canadian media and in June issued its final report and recommendations under the title “Disruption: Change and Churning in Canada’s Media Landscape”. While not specifically related to the copyright review, the media industry report looked at a number of issues relating to the health of the media industries, print and broadcasting, and made 20 recommendations. None directly implicate copyright legislation review, but many, if implemented, would have an impact on what is an important (but threatened) copyright industry.

In Canada, as elsewhere, daily newspapers are dying on the vine. (One blog predicts that most British papers will cease print editions before the end of the 2020s). The Standing Committee reported that the number of daily papers in Canada had dropped from 122 to 102 over the past five years. Employment in the Canadian media sector has dropped by 16,500 jobs since 2008, almost half of them in print. The same phenomenon has taken place in the US, UK and other countries. In the broadcasting sector, while it is still profitable, local news coverage (which for most broadcasters in Canada is a condition of licence) has declined in quality and quantity.

The crux of the problem, widely known, is that the advertising dollars that in the past supported print journalism and linear television broadcasting have migrated rapidly online. But more than just shifting online, the bulk of those revenues have not gone to the content creators, but instead to the content indexers and aggregators, and social media platforms. This was one of the key concerns highlighted by Jonathan Taplin in his new book, “Move Fast and Break Things: How Google, Facebook and Amazon Cornered Culture and Undermined Democracy”. In the words of Duff Jamison, of the Alberta Weekly Newspapers Association;

“I do think that copyright laws were designed before we had this mass digital distribution of content. They probably need to be reviewed and brought up to date…. We put in a possible suggestion. If you click through to a journalist’s story, then at that point perhaps that journalist and the newspaper that employs him should receive a payment. There are ways to get at this.

The two companies, the two oligarchs really, Facebook and Google, take 75% of the digital revenues in Canada. It’s an enormous amount. That’s money that once underpinned our business model. There needs to be some approach through copyright… Is there some way of enacting that type of regulation, which would allow for a better split between the Googles and the Facebooks and the newspapers that are actually generating that content? A great deal of Internet traffic is going to news sites.”

He was echoed by Bob Cox, Chair of the Canadian Newspaper Association;

“We need updated copyright laws to protect original work. Papers invest heavily in original journalism, which is then shared, reused, and rewritten by others, often for commercial gain, because the two-decades-old fair dealing law does not take into account the ease of digital reproduction. If newspapers were compensated for their original content and the investment was protected for longer, it would be a significant boost to our revenues.”

Everyone in the news business can identify the problem, but solving it is not so easy. Taplin doesn’t really have an answer for the print media, although he argues for breaking up the big internet monopolies and for a clearer definition of fair use in the US. In Europe, there is a movement to establish a “publisher’s right” that would give newspaper publishers rights over their finished product, the daily and digital editions. There has been talk of a “snippet fee” (opponents call it a tax) that would require a payment by aggregators for linking to news content. All of these measures have pros and cons.

Although it made twenty recommendations, the Standing Committee did not come forward with any proposed changes to Canadian copyright law (having heard arguments both for and against bringing in changes) but instead turned to the tax code to propose the establishment of a tax credit to compensate print media companies for a portion of their capital and labour investments in digital media. It also proposed that daily and free community newspapers be eligible for support through the Canadian Periodical Fund. This fund currently provides $75 million annually in subsidies to a wide range of Canadian publications—magazines and weekly newspapers.

Newspaper publishers went one better and proposed the establishment of a $350 million annual fund to help publishers offset the cost of hiring journalists. The proposed subsidy, funded from general tax revenues or from a tax on digital ad revenues on intermediaries like Google and Facebook, would contribute 35% of a journalist’s salary up to a ceiling of $85,000.

Tax code amendments, subsidies, tweaking copyright legislation—these are all possible remedies to help level the playing field for news content industries, but some are more doable and palatable than others. The proposal to directly subsidize major newspaper publishers generated criticism for a couple of reasons; reluctance to bail out large corporations owned, in some cases, by very wealthy entrepreneurs and concern over media receiving funding from government lest it compromise journalistic integrity and media independence. Prominent Canadian journalists, particularly Andrew Coyne of the National Post, spoke out against the publishers’ proposal on this basis. Bob Cox, speaking for the publishers, responded in an op-ed claiming that the funding would in effect be “fenced”, i.e. limited to payment of journalists’ salaries in order to preserve staffing in news rooms. Cox admitted that the decision to seek a partial government subsidy was difficult;

“We have done so only after failing in efforts to get changes in taxation, copyright and other areas that we feel would level the playing field with other media companies, particularly the digital giants that are vacuuming up vast amounts of money from Canadian advertisers and giving very little back to communities across the country.”

To date, with one exception, the Trudeau government has said only that it would study the Committee’s recommendations (and it has not responded to the publishers’ proposal for subsidization of salaries). Prime Minister Trudeau did say almost immediately after the release of the Committee’s majority report that his government had no plans to introduce an “internet tax”, (a tax on broadband providers) which was a separate Committee recommendation designed to support the creation of more Canadian content on the internet.

There is no simple answer and no single remedy to solve the challenges facing news media, especially print. One thing that everyone can agree upon is the importance of a healthy and independent media industry for the effective functioning of democratic institutions. As Winston Churchill once said, as I quoted in an earlier blog,

“A free press is the unsleeping guardian of every other right that free men prize; it is the most dangerous foe of tyranny.”

 This has never been truer than in the current political environment.

© Hugh Stephens 2017. All Rights Reserved.