Open letter to The honourable Mélanie Joly, P.C., M.P., Minister of Canadian Heritage
Re: The Canadian Government’s response to the Shattered Mirror recommendations report (Disruption: Change and Churning in Canada’s Media Landscape)
Canadian journalism stands at a precipice.
Its role as the guardian of a healthy and safe democracy, and of Canadian cultural heritage, is in question. The future facing the Fourth Estate today is unprecedentedly challenging. We are reminded of this in the Report of the Standing Committee on Canadian Heritage tabled at the House of Commons on June 15, 2017 based on https://shatteredmirror.ca/ The Shattered Mirror findings.
But there are also unparalleled opportunities for Canadian journalism that were conspicuously absent from the narrow scope of the report — including innovative ideas on new sustainable business models and insights from Canadian technology companies looking to help media capitalize on technological and social disruptions.
I, my colleagues, and my company are all Canadian taxpayers and we are not alone in the concern that the recommendations you offered didn’t show the full picture. The Public Policy Forum leaned heavily on the crutch of old models and outdated assumptions, ignoring innovation happening both here in Canada and abroad. It confined its report to an emergency Government reactionary measure that’s likely to be unsustainable in the long-term.
The committee sought to spend our tax dollars on something we, as members of the publishing community for nearly two decades, know will not work. There are real challenges facing newspaper and magazine publishers. Still, they have had over 20 years to transform for the digital age and turn new profits. Only a few have done it successfully.
Transition from print to digital
The other day, I ran across a marketing campaign by an http://www.news.com.au/national/why-your-news-corp-newspaper-smells-like-popcorn-today/news-story/c6477f8b1d4417dfc552ac6df22d04c4 international legacy publisher in a market similar to ours in Canada. They encouraged the purchase of their printed newspaper by scenting the pages with popcorn. A novel idea, perhaps. But completely out of touch.
The publisher actually bragged about how the scenting took nearly 30 hours and involved eight printing presses at six different locations. It used 147.6 tonnes of paper, 3137 kg of ink, and 200 kg of popcorn scent. Hundreds of trucks travelled a combined distance of 200,000 km to distribute the printed newspapers to more than 30,000 retail outlets. This runs contrary to so many environmental sustainability initiatives their government supports.
The Forum’s recommendation report never mentioned the impact of print on the environment. Given that Canada is the leader in driving the environmental agenda on this continent, shouldn’t Canadian media be encouraged to pursue more eco-friendly business models?
What can be done to build robust business models for legacy print publishers in Canada?
To successfully transition from print to digital, one needs to embrace and understand the reader. It is unfortunate to see how many publishers are still operating with the old school mentality of “I create content, and they will come.”
Further, one cannot fear change when it comes to this transformation. Is digital cannibalizing print in some cases? Yes. Is this a reversible trend? No. What should a publisher do? Get involved in understanding what this trend means for an existing business, engage with technology companies, including Canadian ones, and start working on initiatives, which have quality content (core competency) and readers at the centre of each decision-making process.
Speaking of content... Readers today are swimming in an ocean of information. A lot of it is of little to no value to most readers. A lot of it is commoditized. And taking the laws of supply and demand into account, a lot of the same content combined with the lack of willingness of people to pay for redundant content, yields little to no revenue to producers and distributors of said content.
In the new, digital world, there is no single source of revenue which leads to sustained profitability. Diversification of business and distribution models is key. And no, a bailout from any government source is not one of the diversification pillars in this world.
The report instilled uncertainty and doubt about the future of local media, which was nothing short of fearmongering. When publishers pulled their content from local markets, many citizens were left with only one source for news — something that goes against the notion of a need for plurality of opinions, which media and government should both be encouraging. Thankfully, broadband internet allows for uninhibited access to information, and it was comforting to see that the Government declined the recommendation to add additional levies to it — levies that would have burdened Canadian taxpayers.
Local media is not dead now and never will be. In fact, it’s being reborn in new forms and revitalized by young, talented entrepreneurs who understand its intrinsic value to its community — a value that can be monetized in creative new ways.
Take http://dailyhive.com/ Daily Hive in Vancouver, Calgary, Toronto, and Montreal as just one example. What started out as a humble blog by two friends eight years ago has grown into a profitable business that has never received external funding. I recently interviewed one of Daily Hive’s founders, and he said,
“Looking at our Facebook pages you’ll see some articles with hundreds or thousands of comments, and you wonder how that is even possible. But it's so cool, because you have a community that actually wants to talk to one another. So it's creating this real sense of community and seeing it becoming stronger and stronger.” Farhan Mohamed, Founder and Editor-in-Chief, Daily Hive The Government together with industry players needs to encourage and support local news outlets of all kinds in the future by:
• Encouraging innovation and citizen engagement;
• Creating a favourable economic regime to allow for qualified start-ups to get through a ramp up period;
• Creating hubs, where these local news outlets can pair up with other start-ups and community organizations to collaborate.
The consultative process
In this age of overregulation, it is encouraging to see that our Government is taking a position of inviting the industry to work together on solutions. But the consultative process that led to this report seriously neglected a number of major stakeholders who could have certainly helped the committee to form a more complete picture of the obstacles and opportunities that lie ahead for Canadian media.
What about readers?
We so often hear technology and content aggregators blamed for disrupting incumbent publishers’ legacy businesses. But Google and Facebook did not disrupt media by themselves. People did. Canadians began to choose what to read, and how, where and when to read it. Faced with a wealth of options, their willingness to pay for news changed too. But their voices are conspicuously silent in the Forum’s report. Especially the 86% mailto:http://abacusdata.ca/newspapers-in-peril-canadians-unworried/ of citizens who believe they would still be able to get the news they need if their daily newspaper went out of business.
Local news, major media outlets and technology leaders
Organizations that were directly affected by the recommendations from the report were also not invited to participate, including local news media organizations like Daily Hive, and broadcasters like the CBC. When I saw no mention of the public broadcaster, I wondered if CBC had declined to participate in the study so, naturally, I asked CBC directly. The response I received from Jennifer McGuire, General Manager and Editor-in-Chief of CBC News was as follows:
“Honestly, we weren't invited to be part of the process, although there were insights that I would have happily contributed. Some CBC managers attended some of the regional events and
CBC did write a response to the report. We're now engaged in the conversation and open to continuing the conversation.
“It's not like the issue has been fixed. I think we all agree that it's a complicated time, and my own view is that the Shattered Mirror report opened up a really important conversation. I don't believe it addressed some of the issues that the industry is grappling with, and there wasn't a real economic solution. The frame was really from a newspaper viewpoint, so in my personal opinion, there were gaps.”
What’s more, technology companies like ourselves could have offered a different — and perhaps more positive — perspective. We devote all of our time and resources to coming up with new ideas to help the publishing industry thrive.
Promoting Canadian content
Canadian content occupies a unique position within the North American landscape. It’s difficult for publishers to compete with what’s commonly referred to as the cultural imperialism of American content. So, it was truly refreshing to see the Government, which has been known to prop up failing businesses in the past, took a more rational approach by choosing not to “bail out industry models that are no longer viable,” shifting the focus instead on “supporting innovation, experimentation, and transition to digital."
By exchanging the anticipated handout with a commitment to evolve the existing $74.8M Canadian Periodical Fund (CPF), the Government will help ensure that Canadians have access to diverse Canadian content in both print and digital forms wherever they live.
This is a great first step and I hope the Government will also start looking more carefully at how the CPF resources get allocated. For example, will it continue to subsidize postal delivery of printed copies or, instead, sponsor innovation? I understand that it’s difficult to take revenues away from a Crown corporation, as that evolving CPF will have a ripple effect on other organizations like Canada Post. But it’s time for these institutions to transform themselves, because when it comes to the impacts of technology and social change, no organization is immune.
Here are some ways to support the distribution of Canadian content:
• Set up programs which contribute to meaningful transformation to digital for content producers;
• Establish clear guidelines for funding allocation, which is based on the level of various forms of innovation outlined in the request for funding;
• Foster collaboration of content producers (publishers, journalists, et al.) with technology providers by supporting educational programs (webinars, campaigns, innovation hubs, etc.).
Clearly, based on your response to the report and proposed agenda, you recognize that a mammoth piece of policy needs to be addressed – an undertaking the Public Policy Forum certainly wouldn't be able to tackle, especially with so many stakeholders missing from the table.
Various acts will need to be amended on an ongoing basis to keep pace with technology changes. I applaud your recommendation to engage the industry as a whole so we can work together to bring our legislative framework into the 21st century.
A healthy media ecosystem is vital to a thriving Canadian democracy. It’s time for legacy media to rewrite itself from the ground up and make hard decisions in terms of leadership, vision, economics, and cultural transformation. And it needs to work in tandem with Canadian technology companies whose mission is to help grow and sustain quality journalism in this country.
We at PressReader are ready to roll up our sleeves and participate in Government and industry initiatives to evolve the CPF and other regulations to strengthen Canadian media and quality content creation.
Thank you for your time and consideration. I look forward to hearing from you.
Kind regards, Nikolay Malyarov
EVP, Chief Content Officer and General Counsel