Increasing numbers of media businesses are turning to readers to fund the news. The hope is that reader revenue will make up for the loss of classified and display advertising to digital behemoths such as Google and Facebook.
Yet convincing citizens to spend money on the news they consume has proven difficult, to say the least. As the latest figures from the Digital News Report by the Reuters Institute for the Study of Journalism show, the number of those paying for news has stagnated.
That is, except for one country which garnered international attention in 2023 as a test case for the struggle between policymakers, publishers and platforms over how to ensure a financially sustainable and secure future for journalism.
This year, Canada bucked the trend of other liberal democracies with a four percentage point increase in the number of people paying for news, from 11 per cent in 2023 to 15 per cent in 2024. The rise is due entirely to Anglophone Canadians, as the number of Francophones willing to pay has stayed unchanged.
The rise comes after a year in which the decline of commercial media, the shutdown of news outlets and cuts in journalism jobs in Canada were brought into sharp focus by government efforts to force big tech companies to pay for links to news published on their platforms.
The cost of legislation
Canada’s Bill C-18 (the Online News Act) was modelled after Australia’s 2021 News Media Bargaining Code, which ended up funnelling more than AUD$200 million per year to the news industry from Google and Meta.
As in Australia, the Canadian legislation was intended to redistribute money from platforms. But it came at a cost. Rather than pay, Meta pulled its funding for journalism in Canada and blocked news on Facebook and Instagram in summer 2023, resulting in a significant drop in visits to smaller news sites.
Read more: Bill C-18: Google and Meta spark crucial test for Canadian journalism
Google also made noises about pulling news from its services, but eventually negotiated an exemption from the Canadian legislation by paying $100 million a year to the country’s news industry.
The fight over Bill C-18 meant journalism, its future and how to fund it were consistently in the headlines in Canada, with politicians, civic leaders and media executives stressing the importance of a vibrant and healthy news industry.
Local subscriptions stagnant
The rise in the numbers of those paying for news in Canada may be seen as a hopeful sign for English-speaking countries like the United Kingdom and Australia that more people are recognising the value of journalism and are willing to fund it.
But it is too early to rejoice. This year’s jump is making up for a drop in 2023, bringing Canada back up to where it was a couple of years ago.
Whether the increase is helping local news outlets is also debatable. While the bigger Canadian titles have attracted more subscribers, the report found local subscriptions are hovering at 10 per cent of news subscribers.
It is even more challenging for global media, as the report found 43 per cent of Canadians subscribe to international news brands such as The New York Times or The Washington Post.
As the Reuters Institute Digital News Report has consistently found, it looks like “winner takes all dynamics” are at play when it comes to reader revenue.
News for the cost of a cappuccino
There may also be a simple reason behind this year’s rise. Internationally, the news industry has been heavily discounting subscriptions as publications struggle to attract new paying customers. Canada is no exception.
Over the past year, major titles have heavily discounted subscriptions, offering monthly packages for about the price of a cappuccino. One journalism start-up went as far as offering a 96 per cent discounted subscription rate.
Perhaps more worrying is that the report found 28 per cent of Canadians would not pay more than $5 a month for a news subscription.
It’s doubtful these discounted rates can bring in enough money to make up for a loss of advertising or the lack of Facebook traffic, even with some funds from Google and more Canadians paying for the news. Not surprisingly, the federal government has recently stepped in with more money for local journalism and for subsidies for journalists’ salaries through the Local Journalism Initiative.
As other countries, as well as states like California in the United States, look to bring platforms to heel and pay for news, Canada serves as an example of the unintended consequences of policies designed to help, rather than harm, the news industry.
A version of this article first appeared in the Digital News Report: Australia.
Alfred Hermida receives funding from the Social Sciences and Humanities Research Council. He is a co-founder and board member of The Conversation Canada.
This article was originally published on The Conversation. Read the original article.
