An unprecedented deal between Google and the Canadian government could reset the relationship globally between the search giant and digital media.
That’s the view of Sydney-based Robert Whitehead, expressed in an INMA digital platform initiative blog this week.
An announcement ended a six-month standoff over Canada’s Online News Act, and Whitehead says the fact that Google endorsed most of it and held out hope for the rest will shape the way other commercial arrangements between Google and news publishers proceed.
“The Canadian government dealt itself directly into negotiating money on behalf of media,” he says.
Google has agreed to contribute CA$100 million (A$111.76 million) cash annually to a ‘wide range’ of news businesses, and will have the option of dealing with a single collective to allocate the funding across eligible news businesses. The funding will be allocated based on full-time equivalent headcount of journalists engaged, not on their payroll costs, and will be indexed each year for inflation.
Whitehead says it is not clear whether the CA$100 million is on top of direct deals Google has already struck with some news publishers, or whether individual companies can do supplementary deals on top of their share of the cash.
New legislation appears to have addressed Google’s right to pick partners, and avoid penalties such as ‘final offer arbitration’ if one media company holds out.
There is also the possibility of exemption for targeted digital platforms, if they do deals with enough publishers.
The deal also steers the act further away from “looking or smelling” anything like a ‘link tax’, where payments might have been seen to have been made for each article clicked.
“The Canadian government’s deal formally positions its media payment regime as supporting professional journalism based on the number of journalists employed by eligible news producers,” says Whitehead. “It’s not a payment-for-links clicked, volume of audience delivered to either party, article counts, or as compensation for visits diverted from the publisher’s web site because of Google’s use of snippets.”
He says Canadian media appear to have done well financially out of the deal. “The government had estimated Google should be paying Canadian media houses CA$170 million each year under the act. If the CA$100 million collective fund proves to be in addition to the value of the existing deals, the government’s estimate might be achieved,” he says.
“If that’s the case, it would be slightly larger than the Australian deals with Google. In Australia, the search giant concluded a deal with each of the large- and medium-sized media companies and all small publishers. The latter were via two separate collective bargaining deals.”
He says, interestingly the Canadian government announcement said there would be a clause offering an escalation of terms for Canadians if any other country achieves a more favourable outcome.
“The Canadian tally appears to exceed the recently revised collective deal, which covers more than 90 per cent of news publishers in France.
“But there’s a catch. We may never know if someone else does manage to trump Canada. The digital platforms have always fought clauses that require disclosure of the size of deals. Every media contract they sign includes strict commercial confidentiality clauses.”