July 4, 2019
The Tangled Garden: A Canadian Cultural Manifesto for the Digital Age (Lorimer, 2019)
Richard Stursberg is predicting the imminent death of Canadian media and popular culture.
The former CEO of almost every major Canadian cultural institutions including the CBC is convincing: as a country, we have forgotten our past success in building robust business models of conventional media that produced news, information, sports and entertainment. From the hostility of the Harper and Scheer Conservatives towards “cultural elites” to the posturing of the Justin Trudeau Liberals, the survival of our cultural sovereignty looks a lot like climate change: we are up against it, and we are running out of time.
The media and cultural apocalypse is not hard to see, if you are willing to look at it straight in the eye. Like Naomi Klein implored us in This Changes Everything not to “look away” from climate change, so Stursberg does for Canadian culture in The Tangled Garden, just published by Lorimer.
In written journalism, Canadian news organizations have lost 50% of their advertising revenue in ten years, closing 250 newspapers in small and mid-sized cities. Hundreds of journalists are no longer covering their communities.
Equally in the broadcasting industry, television companies have been in the red every year since 2012 thanks to the same loss of ad revenues to the digital monsters Facebook and Google. Local TV news survives only because, at least for now, Canadian media conglomerates can still cross-subsidize their money-losing news operations with profits from sports and entertainment content, as well as wireless and cable profits.
In the film industry, the apocalypse-deniers tout the surge in movie production in Toronto and Vancouver. They neglect to mention this boom is driven entirely by American film producers like Netflix making American movies for their US audience: our low-dollar and federal tax credits make it all possible. There is no similar boom in making distinctive Canadian movies for the Canadian audience (there has been zero growth in the last 10 years when adjusted for inflation). It’s a great industrial strategy, but not a cultural strategy.
Despite the gloom, Stursberg says there is a way out if only we would return to the fundamentals that worked so well for eighty years beginning with the arrival of commercial radio in the 1930s.
Stursberg describes the winning formula as a garden of Canadian culture, walled off by Canadian media ownership rules and supplemented by laws that only allow American content into the garden if it’s purchased wholesale by Canadian radio, television and satellite outlets, then retailed to eager Canadian audiences. To this day, the profits from this retailing of American culture go straight into financing Canadian news, sports and entertainment.
Stursberg maps out the undisputed success of the walled garden through the eras of radio, over-the-air television, cable, and satellite distribution. The Canadian ownership and retailing model adapted with ease to each succeeding technological revolution. The main delivery platform —-privately owned newspapers, radio and television— delivered the goods largely without public subsidy.
What watered the garden, says Stursberg, was the bipartisan support the from Conservative and Liberal Prime Ministers, starting with R.B. Bennett in the 1930s right up until Stephen Harper scorned it.
Stursberg recounts how Mackenzie King, John Diefenbaker and Trudeau Senior repaired and renovated the garden wall each time a new technology emerged. Brian Mulroney’s culture ministers Marcel Masse and Flora Macdonald maintained the walled garden and even tried to annex the book, music and theatre film industries into it. Their efforts stalled in the face of hostility from powerful cabinet ministers and sensitive negotiations with the Americans over the first Free Trade Agreement.
Jean Chretien gets an honourable mention for wasting no time in applying Canadian ownership and distribution rules to satellite technology the moment the first so-called “death star” appeared. Stursberg favourably compares Chretien’s speedy dispatch to Trudeau Junior’s inaction in the face of disruption by Internet media.
Still it was on Chretien’s watch that the Internet got into the garden. At first the flow of American culture into Canada through the Internet was no more than a pinhole leak. In the late ‘90s, very few media and technology insiders saw what was coming, or wanted to see. The CRTC dismissed any threat to the walled garden, granting a “digital media exemption order (DMEO)” to all media traffic over the Internet in 1999. Meanwhile newspaper publishers began giving away their high-priced journalism for free on websites in the naïve hope that they would maintain digital market share of audiences and advertising revenues. They got the first, but not the second.
Harper was elected in 2006 and Stursberg marks the next nine years as a crucial era of “malign neglect” of the walled garden. The lucrative specialty television market —-its profits underwriting local news operations— was undercut by Harper’s “pick and pay.” The DMEO was extended yet again, allowing Netflix to run riot in the Canadian garden. Harper even appeared before cameras touting Netflix, granting them unregulated freedom in the garden and vowing there would never be “a Netflix tax.” In Opposition both the Trudeau Liberals and the Mulcair NDP, bereft of any cultural rudder, fell in line.
You get the feeling that Stursberg takes for granted the Harper Conservatives’ hostility to cultural nationalism but is utterly disgusted by the passivity of the Trudeau Liberals.
He is unsparing in his scorn for Trudeau’s first culture minister, Melanie Joly, who adopted Harper’s “no Netflix tax” mantra and dismissed newspapers as “failed business models.” What she would never acknowledge is that newspapers around the world will never overcome the success of Google and Facebook in cornering the online advertising market. Advertising revenue covers 80 to 90% of news costs and Canadian newspapers have lost half their life-sustaining advertising revenue to the Silicon Valley web giants.
Stursberg is equally scathing about the Trudeau government’s inattention to the intrusion of Facebook and Google into the garden. He reads the familiar list of charges against big tech: hoarding advertising revenues, monopolistic business practices, privacy abuses, and a soft touch on fake news and anti-social content. In stark comparison to the Europeans who have moved quickly on these issues, Stursberg points out that the Liberals ignored it all for three years until recently, regulating political advertising on Facebook and other social media platforms. Stursberg quite reasonably speculates the government has been captivated by the extraordinary Google and Facebook lobby on Parliament Hill that began in earnest in 2016.
And finally, no description of the cultural apocalypse is complete without mentioning that Netflix is only the flagship in the invasion of foreign Internet TV death stars Disney, Amazon, Apple, CBS Alliance, Comcast NBC Universal, and DAZN Sports.
Lest we despair and “look away” from the apocalypse, Stursberg offers a solution. Tend the garden. It’s easier said than done after a crucial decade of neglect and infestation by foreign Internet companies, of course.
Stursberg begins with written journalism. He pans the recent federal budget commitments totalling $645 million over five years as badly structured and just too little money, given the advertising losses that continue to mount. He would double the funding and make local television news eligible for support as well.
The way to pay for it, he says, is for the federal government to rejig its cultural spending and regulation. That begins with extending the existing tax rules for writing off advertising expenses to include online media. “Closing the loophole” as it is sometimes known, will sweep $900M annually into federal coffers. Add the collection of sales tax on Netflix and the other US video streaming death stars: you are well over a billion dollars for the cultural piggy bank.
But how to deal with the Death Stars? In a significant change to the walled garden principles, Stursberg says we should admit we aren’t kicking Netflix out of Canada any time soon, nor are we about to nationalize them. Instead, we should do what all cultural nationalists have been calling for since the DMEO was first invented: require Netflix and its imitators to follow the same spending rules as our domestic broadcasters.
At the moment, the CRTC requires Bell CTV, Global, Rogers and TVA to spend 30% of their budgets on local news and Canadian documentaries, sports and entertainment shows. A similar obligation on Netflix and other Internet broadcasters will bring an explosion of CanCon production like we have never seen.
There are a few loose ends in the Stursberg manifesto. Not the least of which is what to do about Facebook and Google’s dominance of the digital advertising market without any requirement to fund journalism.
But we have a federal election in six months. Already we have a vague promise from the Liberal Heritage Minister Pablo Rodriguez to do something about American web giants:
But his out-of-the-blue tweet is a long way from addressing the full Stursberg manifesto. Let’s hope that it doesn’t take as long for Canadians to recognize the cultural crisis as it has taken to acknowledge the climate crisis. Don’t look away.