Weekend reads: Think local

Luke Ettinger interviews Village Media CEO Jeff Elgie

Stratford, Ontario (Pat Brennan/Toronto Star via Getty Images)

In the wake of the federal government’s controversial Online News Act, Lean Out has been taking a close look at how the resulting uncertainty is impacting the Canadian media landscape. And in early December, we kicked off a new series, focusing specifically on local, independent, digital-only publications. 

Reporter Luke Ettinger specializes in local news (including, full disclosure, current work with both the CBC and the Local Journalism Initiative). This weekend, he returns to Lean Out to check in with a high-profile innovator in local news.

Jeff Elgie is the CEO of Village Media. He’s been outspoken on Bill C-18, including at Senate hearings. Here, in this edited and condensed interview, Elgie talks about Google’s deal with the federal government, what the loss of Facebook means for start-ups, and how Village Media is adapting to the current climate. — TH

LE: Google has reached a deal with the federal government, to contribute $100 million annually to Canadian journalism. This is something that you advocated for in the past. What’s your reaction to the news? 

JE: The first word I use is relief. Relief in the sense that obviously we were highly concerned that Google could potentially exit news in Canada, like Meta did. Whether it was a $1 deal, or a $200 million deal, or a $100 million deal, the priority for us was to have Google remain. Because they are obviously a large driver of traffic, which is really important. 

I’m happy with the deal. I think it is very different than what the Online News Act actually prescribes. And I think we’ve come full-circle, back to the early idea of having a capped fund that would be distributed centrally — ideally based on journalism expenditure. Which I think are all the right answers. 

There’s a little bit of sadness in my reaction. I think this took a lot longer and it was a lot more painful than it needed to be. I think Google and Meta were always willing to support journalism for the right reasons, and I think the Act set things off in the wrong direction. I think this could have been done faster, easier — and I think that there’s some chance that Meta may have stayed in and we wouldn’t have scared them away. So, it’s a bit of a mixed bag, overall. 

LE: Given that CBC is set to benefit from this fund with Google, how do you react to the news that it is laying off 600 workers and eliminating 200 vacant positions? And full disclosure, I have worked for some time as a journalist with the CBC myself.

JE: It’s always sad news, right? Whenever journalism jobs in particular are lost, it’s never a good day. The CBC is a very large organization with a lot of tentacles and a very complex budget, and I don’t think we fully understand yet the scope of the roles impacted. I will say — because we have job postings out for new markets — we are all of a sudden seeing some CBC staff applying for those positions. 

LE: In our first column in Lean Out’s new series on local news, Jeannine Taylor with KarwathwaNOW.com said she felt that she wasn’t heard, during the C-18 process. You managed to speak at the Senate hearings. Did you feel like your expertise was heard, and taken on board, by the government? 

JE: No. I would say definitely not, at that time. Not up until the Act was passed. I thought the Senate was, generally speaking, dismissive of our position and the position of small publishers, independent publishers, digital-only publishers.

The House and the Senate and Heritage, prior to the Act being passed, had a particular narrative in mind, and didn’t want to hear [anything] contrary to that. Because it didn’t fit with the Act. I think since the new minister has been involved, and since the Act has passed, Heritage in particular has been much more receptive to hearing from us. We have actually met with the minister and have what I feel is a more open line of communication with Heritage, to express our concerns and the position of us as digital publishers in particular — and smaller and independent publishers.

But up until the Act passed, I feel like nothing we said mattered. 

LE: Let’s get to you and Village Media. For those who aren’t familiar, what is Village Media and what is your business model? 

JE: We’re a hyper-local publisher, and digital-only. We’ve been in business ten years. I like to call us a daily newspaper without the paper. We employ newsrooms generally of equivalent or sometimes larger size to the dailies in the communities that we operate in. And we act like a daily. In fact, I would say we act almost like an hourly. We’re publishing very actively on a broad scope of important issues and [offer] original journalism inside the community. Our model business model is reach-based, which means advertising-based. We do not have paywalls, other than on one specialized site on Queen’s Park. We seek to reach a large percentage of the community and then monetize that, through local advertising primarily. 

We’re in 21 cities in Ontario, and then at four other publications in Canada. We also licence technology to about another 130 sites — 120 of which will be in Canada. So, our footprint is going to be approaching 150 sites in Canada, including our licenced partners. 

LE: What about subsidies from the government, like the Local Journalism Initiative? Have you accepted any of those? 

JE: Yeah, we’ve been active participant in the Local Journalism Initiative since it started. We also have benefited from the labour subsidy, which of course just got expanded a couple of weeks back. Both of those programs have been great benefit to us, in terms of helping us expand over the years. 

LE: Do you have any partnerships with organizations like Google or Meta — or have you previously? 

JE: We were one of a dozen or so companies that had content licencing agreements with both Google and Meta. We’ve also participated in various accelerator programs, innovation challenges with Google, for many years. We’ve had a very close relationship and partnership with both of those companies. More so, I would say, on the technology standpoint. Google in particular, early on, supported some of the development of our platform, which we licence now. They don’t ever fund our newsrooms directly, or new market launches in that sense. But we’ve had some great partnerships with them along the way.

LE: You mentioned content licencing agreements. What is that, and how does the government’s deal with Google compare to that deal that your organization had? 

JE: These are deals that both Google and Meta structured while the threat of the Act [was coming] about. I think it was their hope to pre-emptively come to an agreement with the industry that was acceptable. But the industry didn’t think it was enough, I gather. Or there weren’t enough people captured, which is fine. 

Meta’s agreements end this month. Basically the deal was as soon as the legislation came into effect, these contracts could be cancelled and then replaced with something new. Or, in the case of Meta, just cancelled because they’re out [of news in Canada]. In Google’s case, we have an ongoing content licence agreement with them that presumably will be replaced with the new deal with the government.

It’s hard to say how they will compare. We’re not allowed to talk about the value, because we’re under NDA in both cases. We don’t know enough yet about the final regulations of the Online News Act, and in particular the distribution of those funds — the $100 million from Google. 

Until we understand that distribution, it’s hard to say whether the deal with Google will be better or not. I suspect in some cases it will be worse, and in some cases it will be better. Village has expanded a lot since we first signed deals with Google, and the new fund is likely based on journalism expenditure. So, it could be a better deal for us. But I will say that when you take into consideration the impact of Meta leaving … our view is that overall the industry is, in most cases, going to be worse off. 

LE: You recently told the Law Bytes podcast, hosted by Michael Geist, that there could be a platform that comes along and takes advantage of the lack of news on Meta platforms like Facebook and Instagram. You hinted that Village Media could be planning something in this space. What did you mean by that? 

JE: Oh, you picked up on that. [Laughs] We are working on a project. We’ve been working on it for a year now, for a lot of reasons. Partly because of our concern that Facebook would pull out. Historically, for us anyways, from a local news standpoint, Facebook has been the dominant and best channel for social. Outperforming Instagram, TikTok, LinkedIn, you name it, Twitter. 

What we’ve witnessed over the years is that Facebook has had this generally rocky relationship with the news industry. To the point that it seems the feeling of the day impacts the performance of news in the Facebook algorithm. Compared to five years ago or so, organic performance has deteriorated and it’s continued to deteriorate. Once in a while it will bump up a little bit, but overall the trend has been deterioration. 

Our view, even prior to them pulling out, was that they are getting further and further away from news. And the quality of the information that you’re finding on Facebook, outside of being connected to friends and family, is deteriorating. Lots of misinformation. Lots of bad actors. Lots of focus on entertainment. Not really what I think a lot of people are looking for. Especially in smaller communities, where you want a connection to what’s going on in town. You want to know about what’s happening at City Hall. You want to know about the latest event that’s coming up. You want to read things about the people in your community. 

So, we decided that we should undertake a new project, which we’re calling Spaces. It is effectively a hyper-local community network. Think about it like the best of Facebook groups and Reddit and Nextdoor, but integrated it into a local news environment. 

Our market is generally adults in the community who are settled. They have a home, they have a job, they have kids that are looking to be connected to other like-minded people in the community, at a deeper level, in a safe and regulated environment. Let’s say you are really into gardening, our view is we should be able to create these spaces for gardeners to be able to meet each other and connect. Look at it like a Facebook group, or even an old-fashioned bulletin board, or a forum. But with a much more modern toolset that’s like the social channels we’re used to today. Combined with the moderation and regulation that a local news team can provide. 

This is now with our development team. We have spent over a year in planning, research, prototyping, high-fidelity design, and it is now in the build phase of it. We’re probably many months out. I’m hoping for a pilot in the summer and then a launch next fall. But our view is that it has the potential to dramatically change the trajectory of local news and make for a very viable, high-margin business model. If it works. 

We look at it and say, “If there’s even a 10% chance that it might work, we have to try.”Village can support that development initiative out of our operating profits, and we think it could be the best thing that we’ll ever do. 

LE: Village Media suspended expansion in the spring, ahead of the passing of this legislation. Where are you at now with hiring? 

JE: We 100% paused all hiring, other than replacements. And we paused any new community expansions in May in anticipation of Meta potentially pulling out, or Google pulling out. When we figured Google was going to sign a deal, we did post for new jobs in some markets in Southern Ontario.

Our view is that right now we’re casting a net to see what kind of talent is out there and looking to potentially re-enter expansion in early 2024. It takes time to find talent, and interview them. And then, based on the final outcome of Google in particular, we would consider expanding again in 2024. 

New publication development has historically been Facebook. Even though, long-term, Google refers more traffic. The trick for us is we’re frantically trying to figure out how we can still build markets up in the absence of Facebook — this is our Spaces project launch. Will we find enough comfort that we can do that, in order to launch these markets? It’s not confirmed. It’s us anticipating what is coming down the pipe, as well as some changes in the industry. So, we’re just preparing to possibly re-enter an expansion phase. 

LE: I want to touch on public trust. How do you hope news organizations like yours can build that? 

JE: As a local news organization, I would say we build trust by being factual. Making sure that we’ve got good reporters and good editors. Being consistent. But also giving back to the community and participating in the community. That’s a big thing that Village does. We get very actively involved in community organizations.

We cover a wide scope of information. And we carry very little opinion — once in a while, a letter to the editor, a column. But very much, we are a fact-based news organization.

I don’t think, generally speaking, that we have a trust issue. I think national has trust issues. I think in markets where you don’t have a strong local news presence, you have trust issues. And look, there’s always someone who doesn’t trust you, or doesn’t agree with your journalism — even if it’s factual. But I don’t see that as an issue for us at the local market level. As long as we’re invested appropriately in journalism at that market level, then it doesn’t concern me.