Struggling Canadian News Agencies Ask Government For A 'Google Tax'

from the loads-gun,-points-at-foot dept

It never fails (although the proposed solution often does): when faced with the struggles of operating news organizations in the internet era, far too many industry leaders suggest someone else should pay for their failing business models.

The favorite target is Google. Google has somehow destroyed the profitability of news media companies by creating an incredibly successful search engine. Even though its search engine directs users to news agencies' websites, there are those in the industry that believe incoming traffic isn't enough to offset their perception that the search engine somehow piggybacks off their success, rather than the other way around.

So-called "Google taxes" have been passed into law in countries around the world. In every case, they've been a disaster. In Spain, new agencies begged to have the law rolled back after losing traffic from Google searches. Having seen what didn't work in Spain, Austrian lawmakers floated the same idea, proposing a tax on SINGLE WORDS in search results. The latest bad idea is an EU-wide "snippet tax," because it worked so well in Spain, Spanish newspapers begged the EU to step in and block Google from killing its news article search results in Spain in response to the proposed tax.

With all of this data to go on, you'd think the idea would be dead. But it isn't. The EU wants to spread its stupidity across several countries. Meanwhile in Canada, a meeting of minds over the fate of Canadian media companies has culminated in the same exact aneurysm.

Tax changes, better copyright protection and fees imposed on Facebook and Google are among the solutions being touted to help rescue Canada's ailing news industry, internal reports show. Those suggestions were prominent in closed-door sessions with news leaders conducted by the Public Policy Forum, a think-tank the federal government has hired to suggest policies in support of Canadian journalism during a period of digital disruption and reporter layoffs.

So, there's also a "Facebook tax" proposal, one that originates from the country's ongoing efforts to support local creations and content. Those pushing a form of Google tax are suggesting this would be no different than the government's levying of fees on cable companies whose programming didn't contain enough Canadian-made content.

"Perhaps this could be [a] concept … applied in the digital space, establishing charges on news aggregators and foreign content producers such as Facebook, Google, Netflix and National Newswatch to subsidize made-in-Canada content."

Perhaps. It's definitely a "concept" and one that could be "applied" to digital space… but only if the Canadian government wishes to see foreign content producers pull out of the Canadian market. (And, as the CBC notes, the think tank quoted doesn't appear to know that National Newswatch is actually a Canadian media company. That kind of "thinking" is going to get in the way of itself if these are the minds crafting new media policies.)

And there's really no explanation for this:

"Canadian policy-makers should consider whether copyright laws that govern file-sharing in the music industry could be applied in the news industry," with some arguing for a 24-hour period of exclusivity.

Exclusivity is impossible to guarantee on the internet, so unless the legislature is willing to criminalize this form of… I don't know, infringement(?), then there's little that can be done to guarantee 24 hours of exclusivity to any media company. Not only that, but the web is world-wide, and Canadians are free to bring their eyeballs and clicks to foreign sites not subject to any ridiculous 24-hour exclusivity "rights."

As for the file-sharing, I don't even know where to start. Are newspapers going to sue readers for sharing paywalled content or posting links to Facebook? Is unauthorized consumption of news the new piracy?

Better suggestions are made elsewhere in the report, although these still rely on taxing others to prop up struggling industries.

Change tax rules to allow philanthropic support of journalism by charitable or non-profit foundations. "Under existing rules, it becomes difficult to establish the type of independent, non-profit news model that has proven so successful in the United States through ProPublica," says the interim report. Create tax incentives and exemptions to encourage coverage of local news. Investors, for example, could get special tax credits for putting money into local, non-profit digital news startups. Review the role of the government-financed CBC, which has moved into digital news space and — according to some publishers — has undermined the private sector's abilities to attract ad dollars. (The CBC has since proposed that it abandon all advertising, relying solely on increased public funding.)

In every case, there's a look to Canadian citizens' pocketbooks to subsidize media entities that, for whatever reason, Canadians haven't felt like supporting directly.

This is still in its discussion phase, but the summary report points to a lot of bad ideas bubbling to the top. If Canada wants to turn news media into government-subsidized industries, it's going to do at least as much damage to the quality of reporting as their current financial struggles. Any perception of indebtedness to the government will work against these agencies, undermining their reporting and creating doubts of impartiality in the minds of their readers.

As for the various taxes of US companies to subsidize falling Canadian newspapers sales, hopefully a longer look at the proposals will reveal the unintended negative consequences of these plans before both Canadians and Canadian media companies pay the belated price for their short-term thinking.

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Filed Under: business models, canada, google tax, news, snippets