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)

The Insider - - CONTENTS -

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://shat­tered­mir­ 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 an­tional/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.

Lo­cal me­dia

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://dai­ly­ 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://aba­cus­­pa­pers-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.).

Go­ing for­ward

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


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