Ottawa’s fix for the news business will actually hurt it


Unless Canada intends to put most of the news media permanently under some form of government subsidy, Ottawa needs to take seriously its long-term plans for industry sustainability. And that means we don’t force people to offer free news when they’re trying to build a subscription-based business model.

Everyone knows that the technological revolution of the last three decades has had a devastating effect, especially on traditional newspapers. Thousands of jobs have been lost, not just journalists. There are dozens of titles, many of which have a long and striking history, slipping under the wave of change, but just as many titles are ready to follow.

At the same time, the cost of entering the news business isn’t as high as it was when the $ 50 million press was admission. And while its development has opened the door to many dynamic new startups, the federal government still believes it needs to launch many initiatives designed to maintain its news organization. (The suffocating impact on entrepreneurs and innovators is another day’s discussion.)

This includes an annual tax credit of approximately $ 120 million and an annual tax credit of $ 10 million to approved companies. Local Journalism Initiative From (LJI) and an unknown number of online and social media companies Online news law.. The tax credit was initially only five years, but this year it has become permanent. This may indicate the same future for LJI.

But what the government isn’t doing is exactly what the government is doing to create an oversupply of the product they feel they must subsidize to increase the sustainability of the press. Is to find out about.

For example, the Canadian Radio and Television Communications Commission recently approved the broadcast side of Rogers’ acquisition of Shaw Communications.

In between Conditions that Rogers must meet “To increase the total number of journalists employed in the national city television market and double the strength of journalism in Western Canada. An indigenous group of journalists based in all states where Rogers provides news content. Create a news team for. “

It all sounds very positive, doesn’t it? But are there any real benefits apart from the people who are actually hired for these jobs? In other words, let the thousand voices bloom. But does accidentally adding competition to an already competitive market really hurt Calgary Herald, Edmonton Journal, Red Deer Advocate, and Medicine Hat News? Adding another Indigenous News team to Citytv doesn’t make it harder for the Aboriginal Peoples Television Network and other indigenous broadcasters to get the viewers they need to create and grow a viable business model. mosquito?

CRTC already oversees 1,200 radio stations and needs to produce at least 42 hours of local programming each week to promote, and that news is almost always an important factor. And, as you know, radio is free. So it’s understandable that underserved market licenses require news services, but as many as 40 radio stations in Toronto are licensed and at least half get the news free when they don’t really want it. It doesn’t make any sense to offer at. News-based companies are fighting to seduce subscribers within paywalls.

Therefore, while the government is busy working to support news organizations, CRTC undermines opportunities for success by mandating artificial and free consumer oversupply in the news market. I am. It’s no wonder that journalism is at stake. After all, what kind of business can survive by trying to charge for services that government agencies claim to offer to thousands of other people for free?

Next is the online news law. Many of us aren’t sure about the business case behind it, but this concept forces newspapers facing financial distress to indemnify large online companies as public goods. Developed by Over the past year, most of them have signed commerce with Facebook and Google. Seeing that, the CBC and other broadcasters, not facing financial distress, have spoken to Heritage Minister Pablo Rodriguez to include them as beneficiaries and are angry with the criteria. So now, in the way the online news law is made, the CBC is already heavily subsidized and tax is allowed to compete with the very private sector that supports it for advertising. Publicly deserves it.

In short, those who actually came up with this practice and campaigned, that is, journalism-based companies, will almost certainly earn less than expected. Request of CRTC.

If the government really believes in the sustainability of the news business, the first thing the government should do is stop damaging it.

The views expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.

Peter Menzies


Peter Menzies is an award-winning journalist and senior fellow at the Macdonald-Laurier Institute, former vice chairman of the CRTC.