IT’S TIME TO LOOK AT THE GOOGLE MONOPOLY
Corporate failures may leave just the Mother Corp.
John Honderich, the chairman of Torstar, has a problem: His flagship publication, the largest metro daily in the country by circulation, is dying. And hardly anyone cares.
The Toronto Star is not flatlining (I hope). But it has been shedding newsroom staff at an alarming rate, from 470 a decade ago to 170 now. And it’s not that absolutely zero persons, anywhere, give a hoot: The members of the Commons Heritage Committee, who have been hearing testimony about the travails of Canada’s newspaper industry, presumably care. It’s their job to care, after all.
But generally speaking, as big issues go, this one barely registers. It’s below Montreal’s pit bull ban. It’s below cute animal videos. It’s a thermocline layer below Donald Trump’s soft-porn cameo. We know this, naturally, because there’s so little chatter about it on Facebook and Twitter.
The phenomenon isn’t limited to Honderich’s Star, of course. Postmedia chief executive Paul Godfrey shared essentially the same story with the heritage committee last spring, not long after the company merged newsrooms in markets where it owns two daily newspapers, and laid off 90 staff.
Friday, Rogers Media killed the print editions of four of its magazines, including Canadian Business. Maclean’s magazine will henceforth be printed once a month, rather than weekly. The strategy, according to Rogers, is to “double down” on digital. Translation: We need to do this for less money, because it’s all we can afford any more.
Local TV began moving out of small Ontario cities years ago.
It is, as far as the eye can survey, a media universe ruled by Google, Facebook, Twitter — and in Canada, the CBC.
The first has an effective monopoly on Internet searches, capturing the associated ad revenue. The second has an effective monopoly on community engagement, endearing photos of our children and, increasingly, display advertising in markets large and small. The third has an effective monopoly on political chatter and breaking news. The fourth announced last week it is setting up an op-ed division.
That said, the Mother Corp. receives $1 billion annually in federal subsidy. Its funding is waxing, courtesy of the Trudeau government. It aggressively sells advertising — indeed, stomps with gigantic feet all over the national ad market, in competition with industry.
How long, given these enormous structural advantages, until the CBC is the only game in town? And how healthy will that be for Canadian democracy, and taxpayers?
The Commons heritage committee is examining, among other factors, the concentration of media ownership. This was the hue and cry last spring when Postmedia merged newsrooms in Ottawa, Calgary and Edmonton. It was equally top of mind when Torstar shuttered the Guelph Mercury last January.
The headline, with each successive retrenchment, is fewer professional journalists, fewer independent editorial voices, less diversity, a narrower band of opinion. These are legitimate concerns. What’s missing in the discussion — especially in the lazy, driveby shootings of traditional media that have become de rigueur on social media, when they bother to think of us at all — is that this is at root an editorial reaction to an advertising revenue problem, not the other way around. Google and Facebook especially are efficient vehicles for selling low-cost, targeted advertising. Kijiji has consumed what used to be the classified ad market.
Tough luck, is the free-marketer’s response: Be a better competitor. Which is fair. Media companies should be able to offer ads that compete on process, price and result with the systems of the digital giants.
Beyond that, however, are two important questions. The first is whether this can now evolve quickly enough to prevent a cascading series of corporate failures that leave the CBC, distributed via Facebook and Twitter, as the only provider of professional news reporting in Canada. The second, assuming the answer to the first question is no or maybe not, is what should be done about it, if anything.
Government ownership of newspapers is a non-starter, on principle; one China People’s Daily — or indeed, one CBC — is enough. A mandated subscription minimum for professionally gathered news, which would effectively transform newspapers into regulated utilities, would be little better and impossibly complicated to introduce.
But a third remedy — a more robust anti-trust regime that pushes back hard against monopolistic behaviour in digital ads, as regulators in Europe continue to try to do — remains an option in Canada, as it does in the United States.
U.S. Federal Trade Commission staff found in 2012 that Google had abused its monopoly power, at the expense of its competitors and consumers. But the FTC wrapped up the probe in 2013. The federal Competition Bureau took a look at Google in Canada. It wrapped up last April, taking no action.