Canadian Publishing Group Says France Has The Right Idea, Presses For Its Own Google Tax
from the dividing-by-almost-zero dept
Canada is more than just a calmer, more apologetic version of the United States. It’s its own thing. But, more accurately, it’s a Britain + France thing. While Canada shares a common border with us, it’s still more Europe than US of A.
Every so often we’re reminded of its ties with the other side of the pond. This is one of those times.
French regulators recently decided Google owed French news sites for all the traffic it sends to them. It mandated “negotiations” between Google and French newspapers, but insisted the negotiations begin with Google getting out its wallet.
It appears Canadian lobbyists agree with France: Google owes them money.
A Canadian news industry advocacy group says that Canada would do well to follow France’s example in forcing internet search giant Google Inc. to pay news publishers for their content.
I guess this depends on how you define “do well.” This could backfire severely, resulting in no new revenue streams and fewer site visitors. Just ask Spain. That’s not “doing well.” If this means the group thinks it’s advisable to follow France’s example, it’s also wrong. But that’s the direction journalists are being steered by their advocates.
News Media Canada chief executive John Hinds said Thursday that the federal government will need to take a leadership role if the power dynamic between Google and publishers is to be changed.
This isn’t the first time Canadian journalists have demanded tech companies pay them for the traffic they send them. Three years ago, a Google tax was pitched to the Canadian government — one that included Facebook and Netflix in a proposal to tax companies who helped bring Canadian content to site users around the world.
Things are tough all over, thanks to a radical shift in, well… everything… since the beginning of the coronavirus pandemic. Hinds somehow believes an advertising giant will provide for everyone during a time when everyone’s advertising revenues are down.
Hinds said the collapse of advertising rates in the face of the COVID-10 global pandemic, at a time when people are reading news sites at higher rates than ever, highlights the problem.
“I think it’s a fundamental thing: We need to be paid for our content. We need to be compensated,” Hinds said.
Fair enough. Let your readers do that. If they’re not interested, it’s really not up to a bunch of other companies located elsewhere in the world to make up the perceived difference. Everything sucks everywhere at the moment. Wringing a few bucks out of Google isn’t going to reverse anyone’s fortunes. And the more newspapers that convince governments Google should pay for sending them traffic, the less they’ll all be making individually.
A Google tax isn’t a revenue stream. It’s not even a trickle. Here’s Nate Hoffelder’s estimate of how Google’s “billions” in profit would actually pay out for rent-seeking newspapers:
Google is making under 4 cents per search, and turning a profit of around a half a cent per search.
Of course, that is an average across all of Google’s search results, and it includes search terms and even whole verticals which are not monetized (Google News, for example). And that is also a global average and not based on EU revenues, so it is not 100% applicable. (And those calculations are based on a bunch of unsupported assumptions.)
Leaving those caveats aside, the point that matters is that news publishers want Google to pay for the use of their links and snippets. This means that Google would need to take that 3.7 cents and divide it between all of the relevant links returned with each click of the search button (after taking a cut for itself).]
Efforts like this are counterproductive. They’re unlikely to reverse the fortunes of failing news concerns and far more likely to convince US tech companies to avoid providing specific services for certain countries. If Canadian publishers want what France has, they’re only going to end up splitting the disappointment.