Good afternoon. My name is John Hinds, and I am the president of News Media Canada.
We represent over 700 daily community and weekly newspapers from across the country, from coast to coast to coast, in both English and French. We're very pleased that you're holding these hearings because it's a critical time for the newspaper industry. Our currency is our content, so a good copyright regime is crucial to our business.
As you are aware, we are an industry that is facing a huge challenge as our business model has been disrupted. We're in the process of moving from a traditional industrial business where most revenue was from print advertising to a digital model where revenues come from readers and advertisers.
The one challenge the industry does not have, however, is a reader challenge. Canadians are consuming more and more newspaper content, with about 88% of people reading every week. They are obviously changing how they consume our content, although print is still read by about six in 10 Canadians every week.
Newspapers in Canada remain the biggest source of news in most communities, employing almost two-thirds of working journalists in the country. As you're aware, good content is expensive, particularly investigative and public interest journalism, which I think we would all agree is important to the functioning of a civil society. The newspaper industry continues to make big investments to produce quality fact-based stories in every community in this country.
However, we have a big challenge. As an industry we need to be able to get a return on the substantial investments that we make. Unfortunately, under the current copyright regime, this is becoming harder and harder to do. As we adapt our businesses to the realities of the digital market, we need to have a better way to protect that investment.
Historically, newspapers have complained about “rip and read” by our competitors at local TV and radio stations. At the time we understood that this was the price to pay for being a leader in news. However, the situation in the digital world is a totally different game. Free riders such as Google News and other aggregator sites are making no investment in content yet are making millions from our content. It's a sad fact of the Internet that many companies, large and small, old and new, Canadian and foreign, systematically scrape and republish newspaper content for commercial purposes, without payment or permission, and the current copyright regime allows it.
I would venture to say that each of you makes use of a news aggregator service in your parliamentary office. What's happening today is that our content is being scraped, copied, and distributed by commercial organizations, which then profit from displaying newspaper content without permission. It's clear that readers and advertisers value the editorial content from newspapers that appear on third party websites, platforms, and search engines, and this brings enormous value to these parties. In addition, publishers are increasingly seeing that these third parties are becoming substitutes for the original publication.
A free and independent press can only exist if there's adequate revenue to pay journalists, editors, photographers, and freelancers, among others. Today this arrangement is being eroded by a loss of revenue. The majority of the advertising revenue goes to search and social media. In addition, we see the unauthorized and unremunerated large-scale use of publishers' content, and the lack of legal recourse to deal with large-scale infringements.
Press freedom is not just a function of law; it depends on a market that can generate sufficient returns to the huge financial investment required to cover the large legal and commercial risks of the news business. A strong and vibrant market with meaningful rewards for success is an essential component of a strong, independent, and free press. In order for publishers to continue to produce news, analysis, investigative reporting, features, opinions, and to cover institutions such as Parliament, there has to be fair value exchange between those who produce content and those who distribute it.
What we are seeking is a change to the balance of the law, with publishers having control over their content and being provided with legal protection and clarity. We hope that any new legislation would provide legal protection by introducing rights to protect the unauthorized reproduction and distribution of publications in the digital space.
This is something we see in film, music, and software, whose works are copyrighted. The law gives the creators of content in those industries the legal right to decide how and when their content is made available, and perhaps equally as important, to enter into fair and appropriately negotiated agreements with users. We would like to be clear, however, that this is for commercial purposes only. Any new right would have no impact on anybody's right to link or share articles. Publishers, of course, encourage their readers to link and share their articles through multiple share buttons on a website or application.
We've been continually told by members of the government that we need to embrace new business models. Canada's newspapers have made an important transition to digital over the past decade, with high degrees of innovation and large growth in audiences. We've embraced the digital age, and many newsrooms now contain as many technical staff as editorial. However, large-scale exploitation of the content by third parties without prior authorization/remuneration, makes it difficult for publishers to sustain quality independent journalism.
It's essential that Canada's copyright regime catches up with today's realities and allows publishers the right to control the commercial use of their content.
Thank you.