Canadian Heritage Committee on Nov. 17th, 2016

[Ken Waddell]

Some problems lie with the newspapers themselves. I alluded to that earlier. That is, they have become less relevant to people. You have to have people on the ground to have the local stories.

All the news aggregators, all the websites, the CBC, and everything else get a lot of their news leads from local newspapers, whether in a small town, in a small city, or even in a big city. A standing joke in the newspaper business is “we should listen to the radio station this morning so they can read our stories”.

The newspaper is the foundational bedrock of story generation or story gathering, and we may not have done as good a job on that as we should have. I think that is foundational. Without the newspapers in the local communities—and there are 650 community newspapers in Canada, plus dailies and larger papers—we're going to lose a lot of credible, verifiable newsgathering.

If you took out the newspapers, if you shut down every newspaper in Canada tomorrow—

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

There's no more journalism.

[Ken Waddell]

—the websites, big cable TV, and so on would largely collapse.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I want to ask a question to Casey, Mikle, or Bruce.

How important are advertising revenues? Are they down?

[Casey Lessard]

Bruce, do you want to answer that? You probably have a closer perspective on that.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Maybe your partner can read your lips.

[Casey Lessard]

Can you hear what we're saying? We can't hear you.

[Bruce Valpy, Managing Editor, Northern News Services Ltd.]

Could you repeat the question, please?

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

The question is, how important is advertising in your network of newspapers? You are also online if I'm not mistaken.

[Bruce Valpy]

Yes.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

What is the share of advertising revenue that's important to you, and has it gone down lately?

[Bruce Valpy]

Advertising makes it happen. Advertising allows us to do our reporting. It's the essential business model. If nothing comes from these hearings but the understanding that having CBC sell advertising on their web products—

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Unfortunately, we can't hear you anymore.

I understand you are speaking of the 12% that remains available online and that CBC/Radio-Canada is grabbing away from you.

I'm going to switch to Mr. Lever. You mentioned the term “programmatic purchases”. It's the first time I have heard it from a witness. I would like you to share with us what this new reality is.

Can I say, basically, if I put a title on what you're going to say, that advertising online is on some sort of an auction basis? People bid on it until it's sold, and this is why it is so popular.

[Mark Lever]

It is now very much a commodity market for online.... I would say the CBC is a challenge because it is a coast to coast network. It focuses around local content that can be bought with the press of one button, as opposed to disparate.... It's a problem for an independent newspaper like us, not being part of a chain, which would have been very cool to be a part of 10 years ago.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Please tell us how the programmatic principle works.

[Mark Lever]

It's simply a bidding war. You set your campaign. It's an automated, real-time bidding campaign, just like a commodity market. You set your price to what you want to pay for a campaign, the markets, the eyeballs you want—this is the advertiser I'm speaking of—and the campaign gets run on those platforms.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Is this system for internationally sold advertising spots, or is it also for CBC/Radio-Canada or your own websites?

[Mark Lever]

I would say it has changed dramatically in the last 12 months. More and more, the top 10 digital advertisers on our site—and I'm sure it's the same for our competitors—are programmatic networks, but they are paying less. Local advertisers are moving to those because of—

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Let me interrupt here.

[The Chair, Liberal, Hedy Fry]

I'm sorry. We've gone well over the seven minutes, Mr. Nantel.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Okay.

Thank you.

[The Chair, Liberal, Hedy Fry]

Mr. Breton is next, for the Liberals.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Madam Chair.

I am very thankful to all the witnesses for joining us today. You have all mentioned that community media are media that unite us, that bring people together in remote regions and rural communities. You said it well: the current transition we are going through in terms of the media put some of them in jeopardy. That's worrisome. I am personally from a region where community newspapers are in the same situation.

You talked to us a lot about your challenges and the problems you are all experiencing. Still, some nice initiatives have been taken. I congratulate Mr. Crowfoot on the shift made by the company he manages.

Since you had only five minutes each for your presentations, I would like you all to take turns and suggest to the government ways to go through this shift, which is inevitable for the media. I will give you an opportunity to talk about that some more.

We will begin with Mr. Crowfoot.

[Bert Crowfoot]

I was listening to French and couldn't understand it. I caught the last part in English.

We've survived because we sold advertising 33 years ago. The other nine newspapers, when the program was cut, the native communications program, didn't run as a business model. They ran as a service model. They provided the news locally, so when the program was cut, they had no resources. We were selling advertising, and we've survived for the last 24 years.

Advertising has always been a struggle for us. We've managed to survive, but as advertising sales went down, we basically made do with what we got, and staff were trimmed. We converted to models that didn't.... To produce a paper, to print it, and to mail it cost us a quarter of a million dollars. Switching to digital saved those costs. Generations, readers, are changing. Like I said earlier, youth and a lot of people are going to mobile devices as opposed to hard copy, so we're trying to follow those trends.

[Pierre Breton, Liberal, Shefford, QC]

Mr. Waddell, go ahead.