It’s time to let the advertising model die, and start imagining and rebuilding a news industry that is audience-driven.
As news goes, the most noteworthy thing Heritage Minister Mélanie Joly said about supporting Canada’s cultural industries last week was that the government has no interest in subsidizing unviable business models for journalism. Bravo.
The newspaper industry had asked for support to help “make the transition” to digital. Paul Godfrey, chief executive officer of Postmedia Network, said after Joly’s announcement, “We’ve never asked for a bailout.” In anticipation of the grand unveiling of the cultural policy framework, however, news industry advocates had argued for pretty much exactly that: five years of assistance so they can figure out a model that has eluded every outlet that is still relying on ever-shrinking advertising revenue to pay its way.
Look, we don’t relish the erosion of critical journalism infrastructure — especially newspapers, which, for all their sins, remain the primary sources of original fact-based reporting in the country. But we also believe it’s time Canada experienced and embraced the full extent of the digital disruption of the news industry. It’s time to stop reminiscing and to set about reimagining and rebuilding.
Ed Greenspon, head of the Public Policy Forum and co-author of the non-bailout bailout article, doubled down in his response to Joly in Policy Options. “The models that would enable existing news organizations and, notably, digital start-ups, to produce sufficient revenue to finance journalism, have not emerged, and a great deal more experimentation will be required.”
We respectfully disagree. Discourse Media has spent the last two years experimenting and researching models that are emerging in markets that are farther along the path of digital disruption. We think the revenue models are there. Look at how the New York Times has shifted away from advertising dominance by focusing on serving its audience, as opposed to chasing clicks. The Grey Lady now generates 57 percent of its revenue from its audience, not advertisers.
Follow the stories of new digital startups in Europe, such as Spain’s El Español and Holland’s De Correspondent. They have built profitable and growing outlets based on audience membership revenue. Note how the Texas Tribune has weaned itself off heavy reliance on philanthropic dollars by developing a hugely popular events series. All these examples have one thing in common: they are focused on creating real value for their end consumers rather than chasing the page views and clicks that advertisers favour. They focus on deepening engagement with their audience rather than attracting as many eyeballs as possible.
As the Times’ internal strategy group wrote in a January 2017 report, Journalism That Stands Apart: “We are, in the simplest terms, a subscription-first business. We are not trying to win a pageviews arms race. We believe that the more sound business strategy is to provide journalism so strong that people are willing to pay for it.”
This is something Canadian news publishers should know better than anyone: the advertising revenue model that has long supported journalism is dead. Facebook and Google earned 70 percent of Canadian digital advertising dollars in 2016 and their market share is growing fast. These two giants accounted for 85 percent of digital advertising growth in the US last year.
The future is clear, as is the solution: it is time to concede that advertisers have left the building, and to start seriously investing in audience-centred strategies to pay for journalism.
So, what is the role of government? If you accept the premise that an inevitable shift from advertising to audience-centred revenue is under way, then any funding intervention that extends the life cycle of advertising models is counterproductive. Whether or not we call them a bailout, the ideas proposed by our industry so far would delay the inevitable and decrease competition between outlets at precisely the time when they should be battling to prove their worth to Canadian audiences by creating real value for them: “journalism so strong,” as the Times would have it.
Already, Canadians are spending $115 million per year on digital news media products. Based on how comparable markets have evolved, we believe that spend could grow to $345 million within 10 years. Any policy intervention in the public interest should focus on strategically accelerating the transition to putting our audiences first, and nurturing competition between outlets to capture their part of that growing market.
To that end, we travelled to Ottawa with a bold idea for the federal government a couple of weeks before Joly’s landmark speech. We proposed that the government explore a “citizen news voucher” that would permit all Canadian adults to direct $100 of their income taxes each year to support journalism content. (Our proposal is an adaptation of a concept championed by Robert McChesney of the University of Illinois.) Every Canadian adult would be entitled (but not obliged) to allocate their voucher to any eligible news outlet of their choice: print, broadcast or digital.
Canada has a long tradition of investment in public broadcasting, and in providing subsidies or incentives for content creation through instruments like the Canada Periodical Fund. In other words, Canadians largely (although not unanimously) accept the notion that journalism is a public good that merits taxpayer support. As Greenspon wrote, “The media policy bridge was crossed decades ago.”
The problem is that, decades later, there is very little that federal policy addresses: the CBC, some magazines, some community newspapers and not much else. That policy bridge needs to be crossed again because, as we told the government, the threats to the health of Canadian media are so dire, and the consequences for our democracy in not successfully addressing those threats are so severe, that the time for small measures is past.
We agree with Joly that it is not up to government to pick favourites. The voucher proposal addresses that concern by empowering citizens: it shields journalism from political influence, avoids simply subsidizing failing business models rather than fostering new ones and remains strictly responsive to the will of the people. It’s a funding model that is nondiscriminatory and platform-agnostic, based on criteria that favour small media over large and start-ups over legacy media. It seeds a new mainstream that privileges diversities — ethnic, economic, geographic, ownership, subject matter — over the conformities of our current mainstream that Canadians increasingly are not interested in consuming.
Eligibility standards would be set by an independent body authorized to design criteria that are calibrated to promote an open and vibrant media system with diverse viewpoints, to remain platform- and content-agnostic and to focus exclusively on the production of public service journalism. Special weight could be given to Indigenous media and/or media that serve geographic regions that are underserved by existing outlets. A cap could be placed on amounts going to any one organization, thus limiting the extent to which the funding could unduly favour large newsrooms and/or established brands over smaller, less well-known media brands.
So if you live in, say, Guelph, and you miss your Mercury, if someone wants to start covering city hall properly and starts a small shop that qualifies for the voucher program, you’d see actual journalism happen in your town again and you could direct your C-note to that. Maybe that small shop would add a court reporter — more journalism. Maybe in Nanaimo, you’d start to see a revival of your Daily News in a different form. There would be more funds for your Tyee and your National Observer and iPolitics and Discourse and many, many others. Maybe someone other than an Irving could do journalism in New Brunswick. And all of this would be built without advertising, because, as we’ve come to learn the hard way, advertisers don’t care a fig for news, they just want eyeballs. But we need news, and this is a citizen-powered way to pay for it.
We recognize that — in both cost and complexity — this is an ambitious ask. In dollar value, Canadians could end up committing the government to spending as much money to support smaller, community-based, local, Indigenous-led, multilingual digital media from all walks and all corners of Canadian life as we currently spend on our monolithic national broadcaster.
But that would be their choice to make. It would be up to Canadians to support the media they want in the form they want it in the places they live in and care about.
Canada, once a world leader in the counterintuitive practice of peacekeeping in the aftermath of warmongering, could be a world leader in investing in journalism not just as a public good, but as a fundamental public right. Our constitution guarantees our right to a free press. The only free press worth having is one you’re prepared to pay for.
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