“Hitler would have loved social media”
So said Disney CEO, Bob Iger, last week, receiving an award from the Simon Weisenthal Center for his work against racism and anti-Semitism. He meant, of course, the ability to use these platforms for hateful propaganda. There are so many reasons to be enraged about the social media monopolists these days: terrorist incitement videos, enabling dictators to corrupt our elections, selling our private data without informed permission, and on and on. But there is another reason that should be higher in policy-makers thinking.
They don’t pay taxes.
For a century, Canadian governments have fought to provide support for an independent and sustainable Canadian media and culture sector. They created the CBC to fight the dominance of U.S. radio beaming into Canada. They funded arts and culture organizations and blocked tax writeoffs by Canadian corporations for advertising on U.S. TV and in magazines. They created several funds and organizations to help back Canadian film and television production. They insisted pop radio play Canadian artists and ensured Canadian cable, broadcasting, publishing and magazines were Canadian-owned.
Whether you are a Canadian cultural nationalist, whether you agree that the state should have intervened in this fashion so often or not, this is the system we have built over many decades. It is now the essential foundation to our culture industries sector.
Social media threaten to wreck it.
Few people know how astonishing are the profit margins and percentages of market domination that are held by the major platforms. Here are two breathtaking stats: 65 per cent share and 80 per cent margin. Those are market experts’ estimates of share of ad revenues and the profit margins of the social media duopoly in Canada. No other ad business in the world has that stranglehold, no other media business earns one quarter of those stratospheric profit margins.
Unlike them, their Canadian television, newspaper and magazine competitors pay taxes.
In an excellent new examination of the digital Trojan Horse that we have dragged into our democracy, The Tangled Garden, by lifelong Canadian cultural leader, Richard Stursberg, he estimates that if these monopolists were taxed and regulated at appropriate levels it would generate billions of dollars annually in tax payments and new Canadian film and digital production. Billions of dollars.
One small arithmetic example of what is wrong with our querulous politicians weak-kneed stance:
Netflix will have an estimated 8 million Canadian subscribers by next year. We each pay them between $120 and $170 per year, or well over one billion dollars. The incremental cost to Netflix in adding Canada to its U.S. business is trivial. Estimates of their profit margins in Canada range between 75 and 85 per cent per year. By avoiding paying corporate tax and not collecting HST they deprive Canadian taxpayers of an estimated $500 million a year.
No legislative change is required to fix this, Ottawa can simply declare them a broadcaster under existing law. Why are the Liberals so terrified of doing so? If they had acted when Minister Melanie Joly was frightened into silence at the beginning of their term, Canadian taxpayers and our cultural sector would be nearly $2 billion healthier.
The implications of their refusal are very real for Canadian employees and companies. How could Canadian newspapers, television program producers and networks ever compete with such a monopoly business model? Profit margins in single digits are rare in the entire industry today. And they pay taxes.
Hundreds of millions more is wasted in allowing tax writeoffs to Canadian advertisers on American platforms. Again, experts estimate that $500 million to a $1 billion in tax revenue is lost annually, because we fail to treat them as what they are: simply American-owned content distributors.
Beyond these astonishing sums of money leaching out of Canada, there is accelerating impairment of our domestic media culture as a result of this unfair playing field, tilted in favour of the giant social media monopolists.
Our television networks and print media have not been profitable in years. Our domestic digital media players get bought or crushed by the behemoths. Surely we should now demand better answers from our politicians, as an election is only a few months away.
Robin V. Sears is a principal at Earnscliffe Strategy Group and was an NDP strategist for 20 years. He is a freelance contributor for the Star.
https://www.thestar.com/opinion/star-columnists/2019/04/14/the-crushing-impact-of-social-media-freeloaders.html
Recent Comments
Our local network of agencies has found your research so helpful.
very good post, i certainly love this web site, keep on it
I just couldn’t leave your website before suggesting that I really enjoyed the usual information an individual supply on your visitors? Is gonna be back often in order to investigate cross-check new posts
If most people wrote about this subject with the eloquence that you just did, I’m sure people would do much more than just read, they act. Great stuff here. Please keep it up.
A colleague in the field told me to check out your website.
However, it is virtually all done with tongues rooted solidly in cheeks, and everyone has absolutely nothing but absolutely love for his or her friendly neighborhood scapegoat. The truth is, he is not just a pushover. He is basically that special variety of person strong enough to take all of that good natured ribbing for exactly what it is.
How do I subscribe to your blog? Thanks for your help.
Good post. I study something more difficult on different blogs everyday. It’s going to always be stimulating to learn content material from other writers and observe a little bit one thing from their store. I’d prefer to use some with the content material on my blog whether you don’t mind. Natually I’ll give you a link in your web blog. Thanks for sharing.
Thanks so much for this, keep up the good work 🙂
have already been reading ur blog for a couple of days. really enjoy what you posted. btw i will be doing a report about this topic. do you happen to know any great websites or forums that I can find out more? thanks a lot.
Hello there I am so delighted I found your weblog, I really found you by mistake, while I was searching on Google for something else, Anyhow I am here now and would just like to say cheers for a remarkable post and a all round exciting blog (I also love the theme/design), I don’t have time to browse it all at the moment but I have book-marked it and also included your RSS feeds, so when I have time I will be back to read a lot more, Please do keep up the superb work.
35790 232163some truly interesting information , well written and broadly speaking user genial . 45507
I want to see your book when it comes out.
I like this weblog very much so much great info .
Thank you, I have just been searching for information about this topic for ages and yours is the greatest I’ve discovered till now. But, what about the conclusion? Are you sure about the source?
Some genuinely choice content on this site, bookmarked .
834531 277773I discovered your weblog website on google and check a couple of of your early posts. Continue to maintain up the really very good operate. I just additional up your RSS feed to my MSN News Reader. Seeking forward to reading more from you later on! 276853
With this issue, it’s important to have someone like you with something to say that really matters.
Just wanna admit that this is extremely helpful, Thanks for taking your time to write this.
Substantially, the post is really the best on this laudable topic. I concur with your conclusions and will eagerly watch forward to your future updates.Just saying thanx will not just be enough, for the wonderful lucidity in your writing.