Minister, media and misunderstanding

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This article was published 18/11/2017 (2909 days ago), so information in it may no longer be current.

Earlier this week, federal Heritage Minister Mélanie Joly came to Winnipeg to be feted at a luncheon hosted by the Winnipeg Chamber of Commerce, and heavily supported by the province’s film, television, music and news industries. The latter included the Winnipeg Free Press, a title sponsor.

It’s hard to speak for the cultural industry organizations at this event, but for the Free Press, the mission was quite clear: an opportunity to hear directly from, and talk to, the minister who holds our futures in the palm of her hand.

In September, Joly released Creative Canada, Ottawa’s multi-year strategy for supporting the country’s “cultural and creative industries in a digital world.”

The policy initiative includes a focus on strengthening “public broadcasting and support (for) local news information.” That’s where we come in.

In case you hadn’t heard, the news industry in this country — and, in fact, around the world — is facing a struggle for its very life. For a variety of reasons, we are losing the battle to stay afloat. As a result, we have asked the federal government for help. We are going through an unprecedented period of decline in the diversity of voices in the Canadian news industries.

Newspapers are shutting down. Those that are staying afloat are smaller, both in scope and the number of journalists they employ. Electronic media are similarly affected, unable to employ journalists to do original work.

In the face of this crisis, we have come to learn that Joly does not have even a basic grasp of the nature of the problem we are facing.

In her speeches and comments, she has implied that newspapers in particular, but all traditional news organizations in general, want a government bailout so they can cling to failing business models and resist the evolution to digital.

That is a horribly naive and misinformed perspective. In a bid to bring the minister up to speed on the true state of play in the Canadian news and information industry, I offer her three simple truths that, to date, she seems to have missed:

Traditional media are not resisting the trend toward digital platforms. Newspapers and other traditional media organizations were among the foremost pioneers in bringing real-time information to the information super highway.

In 1980, in a partnership with CompuServe, the world’s first commercial internet service provider, a group of a dozen newspapers, including the Washington Post, the New York Times, the Los Angeles Times and the Minneapolis Star-Tribune, brought a selection of their stories to the internet. Within 10 years, hundreds of newspapers around the world were online.

Although there is still a market for ink on paper, most news organizations (including broadcast outlets) would gladly divert increasing resources to digital news delivery if there was any chance of making money at it. Unfortunately, the nature of digital advertising — fractured, dispersed and rates that are pennies on the dollar when compared to traditional print and radio/TV advertising — makes it virtually impossible for any news organization to pay for the cost of producing the news.

And that brings us to the second point that the minister needs to grasp:

It’s hard to make money online. It’s not just newspapers. Just about every high-profile commercial entity involved in producing a good or service that is primarily delivered on a digital platform is struggling to make money.

Quick quiz for the minister — which of the following companies make money delivering information or services via digital platforms: Snap Inc. (Snapchat); BuzzFeed; Huffington Post; Amazon; Uber.

Answer: none of them.

Technology allows us to order a taxi from our smartphones and then watch a digitally animated car snake its way to our location, but it can’t generate a profit. Uber is losing billions every quarter. In the news and information game, even straight-to-internet publications such as BuzzFeed and the Huffington Post lose money. Ironically, the most profitable digital news sources are not new-age, digital-only publications, but rather venerable organizations such as the New York Times, Wall Street Journal and Washington Post, who have held firmly to their paywalls even while digital upstarts have given the news away for free.

Digital advertising is a game designed to benefit mammoth near-monopolies that control hundreds of millions of unique visitors.

It is the very size of those audiences which allows the pennies charged for digital ads to translate into meaningful dollars. That is why the list of profitable digital information companies, led by the humongous Facebook, is so very short. It is also why digital advertising is not, on its own, a salvation for local news.

And that brings us to the last point that Joly needs to grasp, and fast:

Digital commerce suffocates the diversity of news sources. When newspapers and broadcasters talk to Joly about support to help stay afloat, we do so with a fairly honourable intention: maintaining the diversity of news voices.

Around the same time as newspapers were experimenting with the internet, Canada held a royal commission into the concentration of ownership of newspapers, concerned that it would eliminate the diversity of news voices.

Commissioner Tom Kent warned against a concentration of the ownership of the sources of news, noting that news produced by industrial conglomerates was of poor quality and easily manipulated. What he could not have foreseen was that there would be a concentration of the news content itself, as digital-only news organizations would be set up to regurgitate content rather than generate their own original work.

Even with enormous online audiences, the Huffington Post and BuzzFeed do not employ many journalists, largely because they cannot generate the revenue from digital advertising to support the enormous cost of gathering news.

Instead, they take free content from people willing to trade exposure for their time and effort. Or, they buy content from traditional news organizations such as The Associated Press, The Canadian Press or any number of news services offered by newspapers. Or they steal it from traditional news organizations.

Consider this: the Huffington Post maintains a bureau of only one journalist to cover Ottawa, the same size bureau as the Winnipeg Free Press, which has a much smaller digital audience.

With its tens of millions of unique visitors per month, you would think that HuffPo would have a huge bureau in Ottawa, rivalling the Globe and Mail and The Canadian Press. Nope. Just one person.

The minister needs to know that a digital-only business model does not support quality journalism or lead to the employment of more journalists and it does not translate into a diversity of news voices. That is not just the view of the Free Press; newspapers and electronic news organizations around the world have found that their ventures into digital news have been big on cost and low on financial return.

The result is that today, we have fewer and smaller newspapers and shorter newscasts with fewer stories and fewer journalists working to uncover the truth.

The minister’s response to date when these concerns have been brought up is to pump hundreds of millions of additional dollars into the CBC to expand its digital and local news content. Or to launch expensive partnerships with Facebook to develop a digital news incubator at Ryerson University.

These decisions add insult to the injury for news organizations that are trying to sustain their business models in an unfair digital marketplace. They also confirm that somehow Joly thinks that digital news is somehow different than traditional news.

Digital is the manner by which the news is disseminated; journalism refers to the professional standards for the creation of the content, and that does not change with the platform.

As for the CBC, Canada’s public broadcaster has strayed so far outside its original mandate, it’s hard for many of its expanding roster of employees to remember that it was never intended to compete with existing local news outlets. The CBC was supposed to produce content that traditional news organizations did not offer, and to some extent, it still does that.

However, intoxicated with gobs of taxpayer money bestowed upon it by the Liberal government, the CBC is on a mission to replace private-sector news organizations.

Joly has failed miserably to explain how its gaudy support of the CBC supports her stated goal of supporting local news.

The minister needs to resolve the conflict in logic between demands for traditional news organizations to get on the digital bandwagon, and the grotesque levels of money going to the CBC. If there is a way for traditional news organizations to make money delivering digital news, why does the CBC require so much taxpayer support?

We agree with Joly that digital news is most definitely the future. We know that because traditional news organizations have been working toward that goal for more than 30 years, and in the process have served as the pioneers and innovators of digital news delivery. The minister needs to turn to us for our expertise, not lecture us about failing business models.

If the minister looks closely, what she will find is an industry on the edge of a digital abyss that, under current conditions, she has mistakenly identified as our salvation. Her continued failure to understand how and where news is created is not only failing news organizations, it is failing the nation.

dan.lett@freepress.mb.ca