In this episode, the hosts delve into the implications of Bill C-18, a Canadian law aimed at addressing the changing dynamics between tech giants and news publishers. They are joined by Ricard Gil, an associate professor of business economics at Queen's University, who provides insights based on his research on similar laws in other countries.
The episode begins by examining how the relationship between tech companies and news publishers has evolved over the past decade. While advertising revenues for news media have declined, tech companies have experienced significant growth in ad revenue. To rectify this imbalance, the Canadian government proposed a "link tax" through Bill C-18, which would require tech companies to pay news publishers for each link posted on their platforms.
The hosts explore the implementation of similar regulations in countries like Belgium, France, Germany, Spain, and Australia, highlighting the mixed results. For instance, in Spain, Google shut down its Google News service after the introduction of a link tax, leading to a decrease in traffic for news publishers, particularly smaller outlets.
The episode emphasizes that the impact of the link tax in Canada is likely to be similar, with smaller news outlets bearing the brunt and potentially facing closure. Critics argue that the government's approach fails to consider the nuances of online news consumption and its impact on smaller outlets.
Furthermore, the hosts discuss the reluctance of tech platforms such as Google and Meta (formerly Facebook) to comply with the link tax, as it may not align with their business interests. They suggest that the conversation should focus on evaluating the actual impact of referral traffic from tech platforms and the resulting revenue loss for news publishers.
While the future of news consumption may involve individuals downloading apps from individual news outlets, the episode highlights that the loss of referral traffic will still significantly affect smaller outlets. Larger publishers, benefiting from brand recognition and direct traffic, may fare better, but the overall impact on the media landscape remains concerning.
The hosts stress the importance of considering the actual value of referral traffic and the behavior of news consumers in discussions surrounding the link tax. They predict that the outcome of the link tax in Canada may favor legacy media outlets that have struggled to adapt to the internet, while newer, smaller publishers may suffer.
In conclusion, this episode sheds light on the potential consequences of Bill C-18, emphasizing the need for a more nuanced approach to address the challenges faced by news publishers in the digital age. The power dynamics between tech platforms and news publishers emerge as a crucial factor in this ongoing debate.