Google news fund seen as not rich enough

TORONTO • Google Inc. has set aside US$ 1 billion to pay global publishers for news content over the next three years, but, when it comes to Canada, only two small digital- only media players are part of the techgiant’s licensing arrangement so far.

Narcity, which targets millennials, and Village Media, a local news operation in Ontario, are among the 200 publishers in Canada, the United Kingdom, Germany, Australia, Brazil and Argentina that have signed up to Google’s News Showcase program.

The media outlets will be paid for blurbs of news items displayed on the search platform. The search giant will also pay to give readers access to selected articles that are behind a pay wall.

It is understood Google is approaching publishers individually, so larger media outlets in Canada, such as Torstar Corp., owner of the Toronto Star, and National Post owner Postmedia Inc., are likely to be approached, said John Hinds, chief executive of the industry group News Media Canada. Less clear is whether they will be in favour of the terms the tech giant is offering.

“With the announcement of $ 1 billion globally there won’t be a lot of money for Canada,” said Hinds.

He estimated $ 9 million would be earmarked for Canada.

That is a fraction of what some countries believe the tech giants should be paying. In Australia, legislation is being developed with the expectation news organizations in that country alone might receive between $600 million and $ 1 billion from Google and Facebook Inc.

Hinds noted the recent throne speech suggests the Canadian government is considering a framework that would require the digital giants to pay for content.

Traditional media outlets have complained for years that they aren’t compensated by large digital platforms such as Google and Facebook, which showcase news items to attract audiences and generate revenue from search and user data.

Governments and regulators around the world, particularly in Europe and Australia, have begun to look at the market power of the big tech firms, and are putting measures in place to help level the playing field.

But the tech giants have pushed back, suggesting that linking to third- party new sites generates little income for their platforms. In response to a mandatory code of conduct being passed into law in Australia, Facebook indicated last month it could stop the sharing of news items on its platform there altogether. In the past, Google has pulled its Google News aggregation site from users in countries where reform measures were consider out of line.

Michael Geist, a law professor at the University of Ottawa and Canada Research Chair in internet and e-commerce law, said uncertainty in Canada over what the government plans to do to level the playing field — and when — could encourage publishers to skip licensing their content at market rates with Google. Instead, they could hold out “in the hope that the Canadian government will mandate payments well above market value,” he said.

But Jeff Elgie, chief executive of Village Media, said joining Google’s News Showcase licensing arrangement was an “easy decision” for the Sault Ste. Marie, Ont.- based company.

“This is a new and meaningful revenue stream for us,” he said, adding that it fulfils an important goal by keeping the “user experience” on Village Media’s website while attracting traffic and hopefully new audiences from Google.

“And in this case, we’re being paid for it,” he said.