Canadian Heritage Committee on May 25th, 2010

[Mark Jamison]

We underline that while government investment is appreciated and important, total government investment in the magazine industry in Canada by all levels of government collectively is less than 4% of the industry's value.

Federal policy on magazines is working. Over many years, Canada has developed and refined its magazine policy into quite a sophisticated set of tools. In the digital economy these tools will need refining but not replacing.

On the one hand, we have modest government investment that has garnered a high level of success. On the other hand, we have a completely open world marketplace for magazines here in Canada within which our Canadian publishers have been successful. To ensure that the success continues in the digital economy, we will need to update and refine the current tools, not replace them.

When we say that federal policy is working, here is the proof. The number of Canadian magazines continues to grow. Canadians want Canadian content, and magazines are delivering this. With this reader interest, magazines drive economic activity across Canada and create high-quality jobs.

Canadians spend about 41% of their money on Canadian titles when they purchase magazines. Canadian magazines also have 80% of the subscription market in Canada. This compares very favourably, for example, to the percentage of film time and television time devoted to Canadian content.

In this slide you see how the growth of print magazines over the last decade has parallelled the growth of the Internet. Even through this economic meltdown, magazine readership has been very steady.

In addition, magazines are read by everyone. A common theme and discussion is that young people are abandoning the print medium, but nothing could be further from the truth. The largest segment of print magazine readers are in fact people between the ages of 18 and 24. As you can see, it's pretty steady across all of the age groups.

However, as Canadians demand more access to Canadian content in new and different ways, our magazine publishers are responding. As time spent on the Internet increases, time spent on consuming other media will change. Magazine brands are responding to Canadian expectations by creating enhanced content on websites, blogs, Twitter, Facebook, and whatever else they'll invent next week that we don't know about. We want to show you how this is evolving.

Here is an example of Canadians' capacity to work together. Magazines Canada launched the digital newsstand just late last year. With 145 titles participating in both official languages and reader response growing, the project is supported in part by the Canada Periodical Fund. It demonstrates how this public-private partnership can achieve results in a digital economy.

The digital newsstand and related websites provide Canadians with options to access Canadian-created content. These digital formats also allow publishers to enhance core content with links to related sites, government information, business opportunities, and so on.

New platforms allow smaller publishers greater reach at home and abroad. Our magazines take Canada's cultural business commerce, communities, and policy ideas everywhere in digital. An example is Sky News, a small-print circulation magazine based near Belleville, Ontario. It's devoted to astronomy, with a very dedicated print readership of about 5,000 per issue. This is typical of small niche magazines. Look at what happens in the digital age: it is now attracting astronomy geeks worldwide.

Quality Canadian content has always been exportable, and now in the digital age it is much more portable. It's early days for this digital newsstand, but it is already opening doors for magazines of all types to reach even more readers at home and abroad. This will only grow with the right public-private nurturing, and we thank the Canada Periodical Fund for its help with that.

Unfortunately, Jocelyn couldn't be here, but I have to talk a little bit about Clin d'oeil. It's a proven magazine brand with a strong market in Quebec. It's a fashion and beauty magazine that shines in many different ways. One of them specifically is that it has also become a broadcaster; it is no longer just a magazine. It is doing all the Twitter, all the blogging, and everything you can imagine, but it is also the broadcaster of a web series called “Comment survivre aux week-ends?” Now in its second season, this series has been downloaded almost 1.6 million times. The story line comes from stories in the magazine, and there are other related things. Music and other story lines are also available. It's typical of where magazines are going. They're becoming portals for all types of content: film, music, as well as long-form magazine journalism.

When we talk about platforms, we have to include face-to-face events, and Cottage Life in Ontario represents that. The story here is the value a magazine like Cottage Life brings to businesses that advertise in the magazine, true of many magazines. Because Cottage Life is read by cottagers, it attracts advertising from Canadian businesses interested in that market, as does its show. A lot of business is done by people who share in a community built around this magazine. Without the magazine, its live show, its web presence, and other extensions, a lot of Canadians would be mail ordering for cottage supplies from U.S. businesses instead of buying them from Canadians. This is a point we really need to underline: the value of brands and making business happen.

The Alberta Venture brand is a regional business-to-business and business-to-consumer powerhouse. On multiple platforms it drives business, celebrates Alberta's business leadership, and promotes Albertans who demonstrate excellence. Readers across Canada also appreciate this brand, and it puts them in touch with issues and innovations by Alberta business people.

I want to end with Hockey News on this portion, apparently because Canadians like hockey--until last night. Hockey fans have found Hockey News a very important part of their lives. Hockey fans get updates, news dailies from up-to-the-minute scores, and so on on their PDA devices. That PDA download is something in the neighbourhood of 500,000 of just the platform and 4.5 million page views monthly.

So in a world of digital platforms, print, online, TV, radio events, mobile iPads, where's Canadian content in Canadian consciousness? Right up front. Let's take a look at this one for a second. Step aside American Idol; five Canadian magazines beat out hot American TV shows like American Idol in audience, and by a long shot. Millions and millions of people read Canadian magazines.

Why are we doing so well? Once again, it's Canadian content. Our success in achieving this is in a crowded marketplace. It should be underlined that there are over 100 titles available per Canadian of all types, foreign as well as domestic, and we compete in a global marketplace right here at home.

We give a lot of credit to the Canada Periodical Fund, now in its new iteration. It has been redesigned to provide magazine content creators with the flexibility to manage funds strategically, for example, to reach Canadians and international audiences with homegrown content on multiple digital platforms. We think it's key. We would like to see it reinforced as we move ahead. We would like to see it retain its current funding level, including the $15 million the Government of Canada ensured it had going into this round. We would like to see that renewed.

To close, succeeding in a digital economy, we'd like to see a robust CPF continue. We believe the Canada Council is doing a great job moving to the digital age. We are looking for copyright reform that supports creators so they will stay in Canada while ensuring ease of access to Canadian users of our content as well as international users.

We believe in-career skills development is absolutely essential to help our competitiveness in the digital age, and we believe supporting industry collectives to drive innovative marketing distribution and monetization will really help us.

Finally, we'd like to thank you for your time. We appreciate the Government of Canada's investment, and we invite you to join Friends of Canadian Magazines in either language.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

We'll now move to questions. There will be one round of questions of five minutes each.

Mr. Rodriguez, please, to lead off.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you, Mr. Chair.

Good morning and welcome. Thank you for coming.

I will begin with you, Mr. Jamison. These figures are impressive and interesting. I am even surprised because we often hear that in this digital age, there is less space for print magazines and people are turning more and more to the Internet, to the digital media.

And yet you have told us another story, it is a good news story today. Magazines Canada is presenting good news today.

[Mark Jamison]

It is good news. The statistics support it. I think we do a lot of “perception is reality” assessment. But the bottom line is that print is as strong now as it has been for the last five years, and the projection over the next three to five years is that the decline will only be about 1.3% in consumer uptake of print magazines.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I was also surprised, when you referred to age groups, to find out that young people are also big consumers of magazines.

What type of magazines do you people near the 20-year-old mark read?

[Mark Jamison]

All magazines, certainly all Canadian magazines, are very niche oriented, so whatever interests people in a particular age group is what they'll be going to. Interestingly, technology and computer magazines are very popular in print, and young people read a lot of those magazines. Canada does not specialize in celebrity magazines per se, but we certainly have a lot of interests, such as Canadian history and various niche products.

Young people do not seem to have focused in any particular area, but they do have their own interests, including the astronomy magazine I mentioned.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you.

Mr. Ingles, I would like to mention the issue of copyright. This is a bit of a technical issue, but I would like to comment on some aspects that both you and the representative from the Canadian Association of Research Libraries talked about.

You said that you are in favour of the “notice and notice” solution. Is that correct?

[Ernie Ingles]

Sorry, I'm not sure I know what you mean by “notice and notice”.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you. “Notice and notice”, or “avis et avis” in French, meaning that a notice is sent in the case where there has been an infringement of copyright.

I have here a text that says that you “encourage a 'notice and notice' approach to dealing with possible misuse of copyright materials on the Internet. An ISP should not be expected to 'take down' a website that may contain an authorized copyright material”.

This quote is taken from your documents. Do you know what I'm referring to?

[Ernie Ingles]

I'm afraid I don't. I'm going to have to get back to you on that.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I am talking about the whole issue of fair use.

[Ernie Ingles]

Yes. I'm trying to think of a way of explaining it--in such a fashion that even I can understand.

I suspect that when dealing with copyright there are many perspectives. I'm afraid one of the things that will happen when the new act comes in is that no one will be totally satisfied.

We believe strongly in fair dealing, particularly within the context of our membership, which is an educational, research-based membership—the Canadian Association of Research Libraries is part of the university construct in the country. We believe that through various mechanisms, not the least of which is the fair dealing clause that exists in the Copyright Act for private study, research, etc., mostly we are in compliance with copyright as it exists today. However, when and where we may or may not be in compliance, we are supporters of fair application of the collectives in terms of tariff. We also, in many of our digital licences—in fact, almost all of our digital licences—negotiate and pay for rights to do the kinds of things that we think need to be done.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I will ask you another specific question. Does that mean that you are absolutely against digital locks? Are you saying that there is room for this in the legislation providing that fair use has priority over digital locks?

This is a very technical aspect, but I am very interested in your answer.

[Ernie Ingles]

I think the answer is yes. I won't pretend to be an expert in that area. We have others who are, and we can get back to you. But, yes, we believe we have a certain package of rights under fair dealing, and where we don't have those rights, either through fair dealing or licences, we would apply those locks. But I have to admit, I am not an expert in that area.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Okay, but fair dealing should overrule the digital locks.

[Ernie Ingles]

Yes, where fair dealing is an issue or provided for.

[The Chair, Conservative, Gary Schellenberger]

Thank you. We'll carry on.

Madame Lavallée, next question, please.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Thank you.

Mr. Ingles, you are not the first person from the field of literature or libraries to come before us and set out the issues within the world of documentation as they relate to digitization. It is my understanding that there were four issues of interest. I would like to hear your comments on that.

I will present the first three and then talk about the fourth, i.e., copyright.

The first issue is the digitization of documents. I take it that, when you talked earlier about documents, you were not only referring to written documents, on paper, but other forms of documents as well. The digitization of documents, if I understand correctly, is the first issue. For representatives of the book or publishing sector, the problem is one of content, but that is not an issue for the library sector.

The second issue is Google. We know that Google has digitized millions of books, whether in French, English or Spanish, and sent letters to publishers stating that, if they objected to that, they simply could take the company to court. The industry in Quebec is waging a major battle against that. I would like to know whether you were affected by Google's actions, and what your response was .

The third issue is government assistance. You told us that you received a $200,000 grant to support the creation of software.

[Ernie Ingles]

Two hundred thousand dollars.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Two hundred thousand dollars, okay. You received $200,000 to create a software tool to assist in digitizing collections, but you say that if there is one recommendation we should come away with, it should be that the government needs to take a leadership role and invest in the digitization of our documentary heritage. What more would you like?

The fourth issue is copyright, but we can get to that if we still have time. Let us begin with the first three issues on which I would like to hear your comments.

Have I properly identified the issues?

[Ernie Ingles]

Very well indeed, actually.

As you said, the first challenge is digitization. In many ways, it's the easiest, but it's very expensive. It's easiest in terms of technologies involved. Those are sophisticated today. We know what we're doing and we know how to do it, but really it's just the cost of doing it.

The interesting thing about it, however, is that it's also a job creator, because we need to set up our sites and we need to utilize those sites in terms of doing that mass digitization--and the mass is huge.

In Quebec, just as an example, some of that digitization capacity is being developed by our first nations, so it's becoming job creation in the Quebec context. So there are some really interesting spin-off benefits, but it is a huge challenge for us.

Of course, just digitizing something doesn't make it accessible. It doesn't lead to its discovery. In and of itself, that's another item.

I don't want to leave you simply with the idea that the retrospective digitization is all of the problem. My colleagues here have talked very persuasively and very articulately with regard to the digital or electronic versions of those magazines, and I applaud them for that.

I hope they're considering the preservation of those files, not for five years, not for ten years, but our challenge within the research library community is to think of that preservation for 500 years. That is our challenge. I think we are the only ones in the country thinking in those terms. That's where trusted digital repositories come into the fray.

Google has been an interesting component of our lives. Access to all of the Google files is not yet a part of our service array in Canada. It probably will be, but there are still legal things to overcome.

But it worries me as a Canadian, perhaps not in my current role, that much Canadian content—thank heavens not as much as they think—has been digitized by Google, and we're now going to have to go in and somehow buy it back, retrieve it from another foreign repository. That gives me a certain amount of angst, I have to admit.

We would like to see more government assistance, particularly in making in-roads into those huge digitization projects that I mentioned. There's a lot of content out there. We think that content can be re-purposed in many ways by the cultural sector, the private sector, education, all sorts of things. Whether it's $1 million or $10 million or $500,000, as we nibble into it, it's an important--

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

I apologize for interrupting you.

Are we finished?

[The Chair, Conservative, Gary Schellenberger]

Yes, we're finished.

Mr. Angus, please.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you. This has been a fascinating discussion.

Mr. Jamison, there's a book called Free: The Future of a Radical Price. Much of our discussion has been about the dangers of people using cultural goods they've never paid for. While I was in the magazine business for 12 years, for every magazine we sold, 10 people read it. That's a pitiful rate of return.

With respect to getting shelf space, our stuff was usually taken off the shelves and trashed before we ever sold anything. With many magazines I knew, rack space was almost impossible, so they had to find creative ways to sell. From what you've described, it seems that the Internet is creating phenomenal opportunities for Canadian magazines, not just to hold their own and find markets but to find international markets.

How do you see the role of digital in terms of equalizing the playing field that has been skewed against small magazines in this country?

[Mark Jamison]

The digital platform in itself is levelling the playing field because the efficiencies to get to market are much better. The Canada Periodical Fund, in its old iteration, basically paid for postal costs. Today the Canada Periodical Fund can be used to look at other forms of distribution, including digital, so a lot of cost is taken out there.

The digital newsstand I described is mainly inhabited by smaller magazines, and they are selling their magazine subscriptions. These digital platforms aren't giving the product away. When you see the uptake in other parts of the world, however small it is at this time, you see that potential.

The big challenge is monetization of all these platforms in the longer term. Right now it's money going in, hopefully with money coming out. It has been slowed by the economic downturn--those impacts still affect us tremendously--but the long-term opportunity is there for the smaller niche product to thrive, no question.