Media
A Fight Between Zuckerberg and Trudeau Batters Canada Media Outlets
(Bloomberg) — Canadian media companies are caught in the middle of a standoff between Silicon Valley and Prime Minister Justin Trudeau’s government, with their audiences unable to access news on some of the world’s most popular social media platforms.The government passed a law to try to force Meta Platforms Inc. and Alphabet Inc.’s Google to pay publishers in return for linking to news stories, an attempt to boost an industry that has suffered from massive losses of advertising revenue. The big technology firms are pushing back hard. Meta has blocked all links to news content in Canada on Facebook and Instagram to avoid making payments; Google has threatened to remove news from search results.
But the stalemate is battering entrepreneurial news outlets that relied on Facebook to reach their communities, including small organizations that are sometimes the only providers of local news in rural parts of Canada. It’s a warning of the possible consequences for other governments in the US, UK and elsewhere pursuing similar legislation to aid journalism.
A 100-mile stretch between the towns of Woodstock and Saint Andrews, in the eastern province of New Brunswick, is practically a news desert — an area ignored by national publications and underserved by regional newsrooms. So local journalists filled that gap by posting news and communicating with readers directly on Facebook. Since August, however, followers of the Facebook pages of the River Valley Sun newspaper and other publications have been greeted with messages telling them they can’t see the posts, because they’re in Canada.
For reporters at the River Valley Sun and nearby CHCO-TV, the dispute with Mark Zuckerberg’s Meta took away their main online distribution channel. Unlike larger news companies that used Facebook merely to direct traffic to their websites, the Sun didn’t have its own site before the news block. CHCO, a small independent television station, used the social platform far more heavily than its simple webpage.
“Facebook gave us something that was pretty amazing. It allowed us to be big-city media in a small town,” said Theresa Blackburn, publisher of the River Valley Sun in Woodstock, a town of about 5,500 people. “It allowed us to not have to worry about a website. It saved us huge money in those first days. It gave us an instant platform that we could easily network through. It helped us grow.”
For nearly two decades, Blackburn has watched the erosion of local newsrooms in New Brunswick — part of the decades-long global disruption of newspapers, television and radio as advertising moved to Google and social media. In Canada, 500 outlets have closed over the past 15 years, according to the government, providing the impetus for Trudeau’s Online News Act.
Trudeau based his law on Australia’s news media bargaining code, which required digital platforms to negotiate deals to pay outlets for news. Meta temporarily restricted users from seeing news in that country in 2021, but lifted the ban once amendments made the law less stringent. Both Meta and Google ultimately cut deals with multiple news companies, and the code has led to “massive changes” in the media industry, raising more than A$200 million ($133 million) annually, said Rod Sims, a professor at Australian National University.
But if Trudeau was betting on Meta and Google backing down, he may have miscalculated. Both companies warned from the outset that they would pull news from their platforms if Canada’s law passed. Meta followed through with its threat, while Google said it would do so when the law officially comes into effect — expected no later than Dec. 19 — unless the regulations are changed.
Removing news from the world’s most popular search engine would hurt media outlets even more than Meta’s move. Google is the biggest single driver of traffic for many publications. “If Google prevents people from searching for us, it’s going to be catastrophic,” said Blackburn.
To try to solve the impasse, Trudeau’s government proposed specific dollar contributions equal to at least 4% of their annual Canadian revenue — that’s an estimated C$172 million per year for Google and C$62 million for Facebook. Both companies stood firm, arguing they don’t see much financial benefit themselves from news — that they’re actually providing a service to media outlets, large and small, helping them reach readers, potential subscribers and advertisers.
Meta has said that posts with links to news articles make up less than 3% of what people see on their Facebook feeds. But for users like Amy Anderson, a reader of the River Valley Sun, news kept her on Facebook for longer. “Honestly I’m spending a lot less time on Facebook because I don’t see a lot of things there that are of value to me,” she said. “I like the friend and family updates, but after 10 minutes, I’m done. There’s really nothing to read.”
Facebook turned the Sun – a free monthly paper with a circulation of 6,000 – into a daily online news outlet. Its Facebook page attracted nearly 19,000 followers and monthly page views of up to 800,000, almost the equivalent of New Brunswick’s population. After Trudeau’s law passed, Blackburn shelled out thousands of dollars to create a website, money she could have spent on freelancers and coverage. The site received about 60,000 page views per month so far.
For CHCO, Facebook was a way to reach more residents outside of its base in Charlotte County, along the border with Maine. Social media brought more people to its weekly live bingo games, boosting sales of bingo card books that support its operations. Advertisers were able to see from the station’s 28,000 Facebook followers that it had a large, engaged audience, said broadcaster Vicki Hogarth, as smaller stations like hers don’t have those numbers at their fingertips. “But we won’t get any new advertisers, I would imagine, at this point in time.”
The revenue hit from Meta’s move is already significant for digital publications like Ontario-based Village Media Inc., which runs local news sites in smaller and mid-sized cities where newspapers have either closed down or suffered from a huge decline in quality. The company suspended all new hiring and community launches in anticipation of Facebook’s move, which later led to its traffic dropping 12% to 14%.
“The business of publishing in general is not a high-margin business. So when you start taking away 10% to 15% of your top line revenue, it’s a pretty significant impact on the business,” said Jeff Elgie, its chief executive officer. Reduced traffic and revenue mean Village Media will no longer reinvest its operating profit into launching new markets, Elgie said, and it runs the risk of multiple market closures. If Google also blocks news links from search results, or makes news harder to find, the revenue hit would be even larger, he warned in a memo to his staff earlier this year.
Many journalists at smaller outlets see the legislation as a battle between two Goliaths: the major organizations that already dominate Canada’s media landscape, and the US tech giants. Some media companies are trying to change Canadians’ habits by publicly urging them to download their mobile apps to access news directly, rather than through social media. (That list includes Bell Media, which owns BNN Bloomberg Television and operates it in a partnership with Bloomberg News.) But many smaller or newer outlets don’t have that option.
The government “threw a big punch,” said Patrick Watt, CHCO’s station manager. “So of course, Meta punches back. They did that without considering what was going to happen down here at this level.”
Heritage Minister Pascale St-Onge said her government is holding its ground because Canadians want Alphabet and Meta to pay their fair share to support journalism. “What we’re doing here is correcting a power imbalance between tech giants and our media sector,” she said. “I’m confident that it’s going to help not only our national news outlets, but also local and community news organizations.”
Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.
Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.
Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.
Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.
Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.
Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.
Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.
As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.
Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.
Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”
In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.
The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”
This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.
Media
Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition
Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.
One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.
However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.
In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”
Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.
For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”
The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.
Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.
Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.
Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”
Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.
Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.
As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.
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