Facebook vs. Australia — Canadian media could be the next target for ban

kizafair February 23, 2021 No Comments

Facebook vs. Australia — Canadian media could be the next target for ban

Shortly after Facebook nuked news from its platform in Australia, I spent an hour on the phone with Kevin Chan, head of public policy for Facebook, Inc., in Canada.

He told me he’s “working really hard to prevent that outcome in Canada.” In other words, if Ottawa follows Australia and tables a bill forcing tech giants to share revenue with the news business, Facebook would drop the A-bomb on Canadian journalism as well.

Chan would prefer to work out partnerships with Canadian journalism. He said Facebook gave $10 million to various news projects in the past four years. He pledged “in 2021, we’ll do quite a bit more.” But don’t put a gun to our head, he basically said, or we’ll fight back.

Render unto Caesar

I actually share many of Chan’s views. Here’s one. Last fall, the lobby group representing the news industry in Canada published a report Levelling the Digital Playing Field that contends a law similar to Australia’s would garner $620 million per year in Canada. It also says “such a pathway would make up for much of [our] revenue decrease,” implying that the web giants somehow divert advertising dollars from the news business.

This premise is false. What actually happened is that Google and Facebook have much better adapted to the digital era the business model that helped legacy media thrive in the analogue era, when print and the airwaves ruled the world.

Scan of a line from the Washington Post annual report in 1972: ... a quality product to our audience and a quality audience to our advertisers ...
Quote from The Washington Post Company’s 1972 annual report which sums up the 20th Century media business model. (Washington Post), Author provided

A quote from The Washington Post Company’s 1972 annual report sums it well: “… a quality product to our audience and a quality audience to our advertisers …” Newspapers and broadcasters were attention merchants. They’ve been spectacularly upstaged by the web behemoths.

Four out of every five dollars Google earns are ad dollars. In the case of Facebook, it’s 98 per cent! In 2020, their advertising revenues represented a formidable $310 billion worldwide, including $7.6 billion in Canada alone.

Advertising revenues reached $7.6 billion in Canada in 2020 for Facebook and Google combined.
Advertising revenues for Google and Facebook over the past three years, in millions of Canadian dollars. (Data from Facebook and Google annual reports, and the Canadian Media Concentration Research Project), Author provided

Journalism is worth something

While I applaud their success, Google and more critically Facebook must in turn acknowledge some of that success rests on the shoulders of others. The attention they sell ads with is generated, in part, by news content. I asked Chan, how much. “Zero,” he answered. The value, to Facebook, is in the social link. “It is not true that news has value for Facebook.”

And this is where we diverge. In the scholarly journal About Journalism, Tristan Mattelard documented, play by play, how Facebook courted news organizations in order to attract quality content on its burgeoning platform.

Last fall, I estimated 5.3 per cent of Facebook ad revenues between Jan. 1, 2018, and June 30, 2020, had been generated thanks to news content. I’ve repeated the exercise during the past weeks, but with a larger sample of 1.9 million posts published in 2020 on Facebook pages administered in Canada.

Data from 2020 show news posts drive less interactions than other posts on Facebook
Number of posts and sum of interactions from media and non-media pages in 2020. (Data from CrowdTangle), Author provided

There’s a lot of news on Facebook. Just short of 20 per cent of all posts in my sample were from media pages, from CTV News to the Lake Cowichan Gazette. But news is Facebook’s broccoli. It drives far less interactions than the viral content usually found on the platform.

Only 7.3 per cent of the total interactions in my sample was from media pages. I apply this more reasonable proportion to Facebook’s advertising revenue in order to estimate that Mark Zuckerberg’s company made $210 million thanks to Canadian journalism in 2020.

I acknowledge this figure is an imperfect estimate. It is based on the few data Facebook allows researchers to access. But it is the least imperfect one. When asked by a La Presse journalist about it, Chan said my methodology was based on “incorrect hypotheses,” making my “conclusions erroneous.”

Chan told me Facebook doesn’t sell ads with content. More interactions don’t translate to more dollars. I understand that: if I read a Le Devoir article three times, it doesn’t bring in more advertising dollars. Facebook sells eyeballs.

Yet, those eyeballs turn to Facebook, in part, to know what goes on in their community, their province, their country. It’s in that sense that I don’t believe news has zero value to Facebook. Justin Osofsky, Facebook’s vice-president of global operations, wrote in 2013 that, “People come to Facebook to not only see and talk about what’s happening with their friends but also read news and discover what is going on in the world around them” (my emphasis).

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