Why Canada’s media industry is in more danger than you think — and what we can do to save it

Toronto Star– In the Tri-Cities region of Metro Vancouver, which encompasses the ethnically diverse cities of Coquitlam, Port Coquitlam and Port Moody, two duelling newspapers used to battle each day to get the best stories.

But the Tri-Cities Now paper shut down in 2015, leaving the region with a population of more than 234,000 to rely mostly on one source, the Tri-City News for local coverage.

At least 250 Canadian newspapers have shut down since 2013, turning swaths of Canada into “news deserts,” where there are few or no journalists covering those communities at all.

“People have assumed that it is because our business is in terrible shape. Actually, we’ve had more readers — print and online — than we’ve ever had,” says Richard Dal Monte.

Dal Monte had been the editor of theTri-City News for 19 years, leading a small team of journalists to win numerous awards for human interest stories and scoops that held local governments to account, such as a report about a city official stealing $175,000 in taxpayer money.

Dal Monte got his layoff notice on April 1, while he was in the midst of directing COVID-19 coverage that saw online page views multiply threefold from October 2019 to April 2020.

Richard Dal Monte was the editor of the Tri-City News for 19 years, leading a small team of journalists to win numerous awards for human interest stories and scoops that held local governments to account. He got his layoff notice on April 1, while he was in the midst of directing COVID-19 coverage that saw online page views multiply threefold from October 2019 to April 2020.

“Even before the pandemic, we were covering big stories that led to huge gains in readership. But it doesn’t translate to revenue,” he said in an interview from his home office, where he now works as a freelance editor and writer.

The first sign of trouble came in the 1990s when the appearance of Craigslist and other free online listing sites meant that newspapers’ classifieds revenue dried up.

In retrospect, newspapers could’ve done more to protect the value of their work to attract paying subscribers, says Tim Doyle, professor of journalism at Centennial College in Toronto, who has worked as a media executive leading digital transformation at many of Canada’s major newsrooms.

“We eagerly moved forward as the internet was gaining hold, and most media outlets put their content online for free.

“And fast forward to today, advertising dollars have just disappeared, hundreds of journalism jobs have been cut, and as for local news coverage, there’s less of it in some markets, and none in some,” Doyle told the Star.

“Our audiences keep growing though,” he added.

Stories like these show that the media industry has reached the point of “market failure,” says News Media Canada, a group representing major print and digital publishers in the country.

Market failure is an economic predicament where free market forces like supply and demand don’t function as they should. This means that the media’s ability to act as watchdogs and support participation in Canadian democracy has been significantly eroded.

Time is running out to save the publications that remain and to support media startups that provide reliable information to Canadians, journalists say.

Last month, News Media Canada issued a report requesting that the federal government allow outlets to band together to bargain collectively with American tech giants, impose a code of conduct on “web monopolies,” and enforce that code with large financial penalties.

This model would help the struggling industry take on the “monopolistic practices” of American tech giants and level the playing field at no cost to taxpayers without the need for new user fees or subsidies, the organization said.

Google and Facebook currently collect around 80 per cent of digital advertising revenues in Canada, which makes it difficult for all other players to compete, according to the report.

“Their products are free, and they charge well below-market advertising rates, while gathering up all the user data which is what they need to sell advertising cheaper than anybody else,” said Jamie Irving, vice-president of Brunswick News Publishing and chair of News Media Canada’s working group.

The main revenue model that has supported the content Canadians rely on to understand their communities is no longer viable, said John Hinds, CEO of News Media Canada.

“Newspapers used to sell local ads to support local newspapers, which would hire local reporters to cover local news. What has happened is this cycle has been broken and billions of dollars are siphoned off to California,” he said.

This has led journalists to give up and change careers.

“I’ve been on the layoff list three or four times during my career and managed to keep my job only because others took buyouts,” said a 40-year-old Ontario-based journalist for a Postmedia newspaper, with more than a decade of experience. “Now, I’m working on transitioning out of journalism,” said the reporter, who requested anonymity as the job search is ongoing.

The constant stress of looming layoffs and reality of poor career prospects was the major reason the reporter chose to quit journalism, but as a person of colour, the reporter also had to deal with increasingly plentiful racist and hateful online comments.

“I’ve made peace with it, and there are things I won’t miss,” the person said.

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In September, the federal throne speech announced that Canada will pass a new law compelling companies such as Facebook and Google to pay for the stories, music and videos from outside sources that appear on their platforms.

“Web giants are taking Canadians’ money while imposing their own priorities. Things must change and will change,” said the speech read by Gov. Gen. Julie Payette.

But while News Media Canada represents the views of executives at most of Canada’s major media companies including Torstar,not all journalists agree with their proposals that Ottawa is now weighing.

Anita Li, a former journalist, says media leaders must take responsibility too for how they failed to anticipate how digital disruption would impact their revenue.

Anita Li, a former journalist for the Globe and Mail, Toronto Star, CTV, and other outlets, switched to full-time work as a media consultant in 2019. She wanted to help outlets reach revenue sustainability given that news industries around the world are struggling financially.

“I agree that Google and Facebook dominate the online advertising market, and that’s been a scourge for media industries all around the world including Canada, and they should face intensive scrutiny and possible regulation,” she said.

“But media leaders must take responsibility too for how they failed to anticipate how digital disruption would impact their revenue, and work to explore alternative business models. These proposals to challenge Google and Facebook seem so belated,” she said, adding that Canadian media leaders should focus on diversifying their revenue streams beyond advertising.

For its part, Kevin Chan, Global Director and Head of Public Policy for Facebook Canada said it is willing to hold discussions with Canadian media leaders to find solutions.

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“We want to work with news organizations and governments to support the development of sustainable business models. Over the past three years we have invested nearly $9 million in partnerships and programs in Canada, such as the Facebook-Canadian Press News Fellowship, and we’ll continue to do more,” Chan said in a statement.

A Google Canada spokesperson rejected allegations in the News Media Canada report that Google owed hundreds of millions of dollars to the news industry, and said the report ignores the value Google has given to publishers, including sending five billion visits to Canadian media sites each year.

“The Canadian advertising industry is dynamic and competitive, and we compete and collaborate with thousands of other companies in this space,” the spokesperson told the Star, without addressing the concern that two companies earning 80 per cent of digital ad revenues amounts to a monopoly.

While the problems can seem insurmountable, all Canadians should care about the struggles for a more equitable playing field for media businesses, says veteran photographer Tim Krochak.

Krochak started his journalism career at the Winnipeg Sun in 1992, at a time when a mid-sized city like Winnipeg had multiple outlets competing and pushing each other to higher standards. This is no longer the case with the closures of many Manitoba papers.

He now works for The Chronicle Herald in Nova Scotia. The newspaper used to boast a sizable photo department, but now operates with a skeleton crew of three photographers and no photo editor. Krochak was laid off in March, and was called back to work when the newspaper needed staff to cover a horrific shooting spree that killed 22 people.

When shooter Gabriel Wortman started his 13-hour crime spree on April 18, which began with impersonating a police officer, Canadians were desperate for information and national news outlets couldn’t send staff to the region because of COVID-19 quarantine rules, Krochak recalled.

“It was Canada’s worst mass shooting, and all the coverage relied on people who live here and who still do journalism here. It’s super important because you become the eyes and ears of the world at that point.

“People should know what the heck is going on,” Krochak said.

“People want news more than ever, but who’s going to pay for it?”

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