Evidence of meeting #26 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was digital.
A recording is available from Parliament.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
Tell me again, maybe more specifically, what do you do to provide increased competition?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
I think the best choice for increased competition is to look for alternative sources of local news and who can start them up. That means starting up digital enterprises that can operate very inexpensively and that can team with community organizations, with educational institutions and others, to create another local news source that becomes an alternative..
In some cases, particularly where you have locally owned, non-daily newspapers, you have some that would very much like to better serve the community there and better address the local news. There are things that can be done to support them, and to actually provide, as some countries do now, tax credits for hiring new local journalists and provide them training and other things on how to move into digital, social, and mobile media, which are increasingly important, even at the local level.
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
Is that an avenue, then, that we should consider? That's something that Robyn Smith brought up at The Tyee, in the previous presentation—
Liberal
Seamus O'Regan Liberal St. John's South—Mount Pearl, NL
—about philanthropic rules needing to be loosened, seed money, and start-up money.
The chair has just informed me that I have two minutes left, and I have one question that I want to ask you because I think it's an important one, and that is about the experience in Europe with the Google news fund of 150 million euros and using that for seed capital for start-up journalism. Has it worked? How old is it? Is it something we should look at?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
It's fairly young. It has gone through about a year's worth of seed funding. It's hard to tell how effective it is. They are getting start-ups, but there are start-ups that are being funded by many other organizations and groups, and some of them seem to be playing an important role at the local level.
Now, there are some that are important that are playing a role in investigative and national level journalism, but the local level tends to be more community-based funding. Community foundations and others seem to be providing that most often.
In other countries, the Netherlands, for instance, has had a media loan fund to support start-ups, transformations, and other things, and that's helping as well to meet the needs of local communities and minority communities.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
Thank you very much, Madam Chair.
One of the things I heard you say, Professor, was that we could work to focus on not-for-profits as a way of getting more local media. Of course, having sat here for many weeks, it seems to me that they're all not-for-profits, or at least that's what they're trying to persuade us of.
That aside, you made reference to rules in Canada that were not supportive of this. What exactly would need to change in our rules to allow what you're talking about to happen?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
Under the Canadian charities and tax laws, journalism is excluded from charitable purposes. I think the reason that occurred is that in the past it was seen primarily as a commercial activity. It is not specifically enumerated and therefore has not been approved as having a charitable or educational purpose that would come under the charities act and also under being able to receive gifts and tax about gifts. Those issues need to be addressed.
There was a large study conducted a year ago comparing English-based nations, Commonwealth nations, in that regard—the larger ones—and it showed the deficiencies in the Canadian one, but it's mainly enumerating the fact that there can be not-for-profit journalism and that could be a culturally and educationally significant act under charities and tax laws.
Conservative
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
There are many operating under that. In the United States, many are operating under not-for-profit activities. In the United Kingdom, there are some operating under not-for-profit. Australia has been moving that way as well. In Australia, the most notable is The Conversation, which started there and is now also available now in the United Kingdom. There are a number associated with investigative journalism in the U.K.
In the United States, you have things from ProPublica or The Texas Tribune and others that are trying at the state and the more local level to cover things, such as San Diego today, for instance, and others.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
In my own neck of the woods, we've had many of the phenomena you point to, such as local newspapers that are part of larger chains getting away with as little local coverage as they can to justify filling up the advertising. I have at least one example of a start-up that started up because somebody decided to fill a space themselves, without any kind of seed funding or anything like that. Is that the normal competition that can and should happen? Why do we need to interfere with that normal phenomenon?
September 27th, 2016 / 12:25 p.m.
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
It's not necessarily interfering with it. In fact, it should be encouraged. There are many mechanisms to encourage those kinds of start-ups.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
I'm sure the other local newspapers would consider it interfering if I were subsidizing one and not the others.
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
I'm certain they would. One of the central problems of news is that news has never been a commercially viable product. News has always been subsidized: by advertising, by political parties, or by community persons who, for some reason, want to have influence, either for social purposes or for political purposes.
It was only really in the 20th century that advertising became the base of funding for the kind of media operations that we know today. We are moving back to a place where you can produce only a small amount of income that can support a few journalists, a publisher, and a few others, and that is to be encouraged.
I don't discourage commercial activities. The problem is that they tend to work better in larger communities or at the national level, because you can get a large enough group of people who are willing to pay for it. You have groups like Mediapart, in France, that are very successful as commercial organizations doing national investigative journalism, but it doesn't work very well in a community where you have 1,000 people, and only 100 people are willing to pay to have the local news.
You have some financial issues that come in there, but I am certainly not saying that only not-for-profits should be there.
Conservative
Peter Van Loan Conservative York—Simcoe, ON
A lot of what we've heard has been the opposite equation of what you are saying, where the bigger outlets say they can't compete because if it's national or international news, everybody gets it off their Facebook or the Internet, and it's only the local news—what's happening in their neighbourhood—where they have to go to local papers.
Torstar, for example, is bleeding red ink on their major flagship publication, the Toronto Star, and, anecdotally, all of that survives off the money they get from their local publications.
We've heard a lot of evidence suggesting the opposite: that local is the one thing that is viable, at least on the print media side of things.
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
In the print media today, local news in daily newspapers is still supported by advertising, and I don't disagree with that. The problem is that this only works effectively in under 100 Canadian cities. In other cities, they are just barely scraping along, trying to make it. Look at the 1,000 or so non-daily papers across Canada. Most of them are extremely small. Yes, they are getting some local support and some local advertising, but the cost structures of print are killing them.
What they need is to be able to find ways to transition over the coming 10 years to digital, so that they can remain viable as a digital operation when their print advertising declines. The advertising even in local papers is declining, and you can see it coming that they, even in non-daily, will get to the point in another decade or so where they are not going to be very able to survive in their current forms.
Liberal
The Chair Liberal Hedy Fry
Thank you very much, Mr. Van Loan and Dr. Picard.
We now go to Mr. Nantel for the New Democratic Party.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Thank you, Madam Chair.
Thank you, Mr. Picard.
Just as in the case of Jean-Luc Picard from Star Trek, I will not assume that you speak French just because of your last name.
Do you speak French?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
I speak some, but very poorly. I apologize.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
It's okay.
I know how intensively you've worked all across the world in other countries on these important issues we are facing now. As you said, there has always been sponsoring of the news, no matter what system we are in now. What you are suggesting now is that in order to have regional news, we should help existing media.
I have been super-impacted by the presentation of GoGaspe.com. It's in a region in Quebec called “la Gaspésie”, and they have decided to unite, on a website, various media and specific offers related to that region. Do you think such hubs are one of the best ways to go?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
I think they are a useful way to go, and they make it possible to share more information and to share the infrastructure costs of operating along the way. That certainly is a useful way in some places where you have a tight community that will co-operate.
One of the big problems in the news business has been that publishers in particular—and others—didn't like each other very well, for political reasons or other reasons, so they didn't want to co-operate. Now they are being forced to do so, and in the digital environment, networking and co-operation are very natural. You're seeing much more working together in the digital environment, because it's useful.
That's the kind of thing where you can actually bring together both commercial and non-commercial players and have them co-operate in a way that becomes very effective, and it doesn't give an undue advantage to either of them.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
We hear more and more—especially as Mr. O'Regan said about The Tyee—about the not-for-profit philanthropic journalism. I guess, for such a specialist as you are, one may feel vulnerable in saying that the information is related to some goodwill. You've spent your career observing this. I keep having these Spotlight feature film sequences in my head. What should we do?
Professor, Reuters Institute for the Study of Journalism, University of Oxford, As an Individual
I think you need to do a number of things. I think one needs to help existing enterprises that are there, but not to the point that they make it difficult for new enterprises to appear. That's very often been the problem. If you just throw money at the existing ones, they use it to keep out the others. You need to have competition.
One of the essential problems, if you look at daily newspapers today in Canada and the United States—and actually, in most of Europe as well—is that only about 10% to 15% of the cost of the newspapers has to do with news. Everything else is non-news: the printing press, the building, the trucks. All of these things are very expensive. That's why publishers really would like to get out of the print business, but they don't want to get out of a business that's still making money. They are still making money. It's about half the rate of what they made 20 years ago, but it's still a higher return than most other businesses, so they want to be in it.
On top of that, there's a prestige factor there, and there's an influence factor that they want to maintain. That is important. They also have the existing infrastructure for collecting news. If that can be used to improve the local news, if that can be used to make sure there's more local news provided and be part of it, then it should be part of it. But it cannot be the only solution to what is happening in the future.