August 30, 2020
The Canadian Association of Broadcasters (CAB) is warning the public, and especially our federal government, that the journalism-sustaining ad revenues that pay for radio and TV news are about to get clobbered by the double whammy of the Internet and the Covid-induced recession.
The precarious survival of broadcast news, especially local news, is hardly a secret to industry analysts.
But for the last five years most public attention has been focussed on the fate of “print” newsrooms. No question, 270 newspaper closures in the last 10 years is hard to ignore. Any news junkie could tell you local newspapers have closed in small and mid-sized communities across the country. Even in large cities, news coverage has either shrunk or been filled out by syndicated news from outside the community.
Just as the Public Policy Forum riveted policy-makers’ attention on the dire prospects of Canadian newspapers in its 2017 report “The Shattered Mirror,” the CAB has released its own bell-weather analysis in CMI’s prosaically titled report “The Crisis in Canadian media and the future of local broadcasting.” It’s considerably shorter reading than the Shattered Mirror, with a bullet-point executive summary.
Here’s a spoiler alert: the Internet has been blasting Canadian radio and TV for years. Covid is turning it into a perfect storm.
CMI predicts a $1 billion shortfall in advertising revenue in the next two years because of Covid. With fifty per cent of the nearly 800 private radio stations already operating in the red prior to Covid, and seventy per cent of 95 private television stations in a loss position for several years, it’s not adventurous to project mass closures of broadcasting stations. The loss of local news, already hugely impacted by newspaper closures, is the grim reality of what’s in store for our democracy.
The CMI Report’s author Ken Goldstein —the veteran media analyst based in Winnipeg— says the long-term erosion of broadcasting’s advertising revenue caused by the Internet means even a “V” recovery from the Covid recession will not result in a real recovery of broadcasting revenues. Covid is merely accelerating the pre-pandemic decline.
CMI predicts between 50 and 200 money-losing radio stations going off-air, and an unspecified number of TV stations (some network TV stations are obliged by CRTC licences to keep operating until 2022).
The at-risk stations are likely to be small and independently owned. They can’t spread overhead or lean on profitable sister stations in the same ownership group, unlike stations operated by large media networks owned by Bell Media, Quebecor, Rogers and Corus. The vulnerable stations are more likely to be in the Atlantic, the West or in Ontario outside of the golden horseshoe.
For decades, Canadian broadcasting thrived, and now merely survives, on a multi-layered system of cross-subsidization, beginning with money-losing small market stations sharing in the wealth from stations in major metropolitan areas. The same cross subsidization effect transfers profits within large ownership groups from cable divisions to broadcasting operations, and within broadcasting operations from sports and entertainment channels to local TV.
Additionally, Canadian television broadcasters make healthy profits by retailing popular American shows —-think the NFL Super Bowl or the Oscars—- to pay the bills for local journalism.
But that industry profit, which allows for cross-subsidization of local radio and TV news, has been completely disrupted by the foreign Internet giants: Netflix, Amazon, Google, Facebook, DAZN…..the list gets longer every year.
What CMI is saying is not just that many money-losing independent stations won’t survive Covid, but that the cross-subsidization capacity of big media like Bell or Rogers to keep their smaller regional stations afloat is fast eroding.
If you’ve endured the steady stream of bad news from our “print” media conglomerates —- like Postmedia and Torstar—- you will see evidence of the fact that Canadian journalism is not going to be saved by economies of scale. Corporate consolidation is merely resisting the gravity of decline.
If there is a glimmer of hope, we do seem to have a Heritage Minister —-rookie Montreal MP Steven Guilbeault—- who gets it and wants to fix it, not always a given in a cabinet role that seems to be treated as a training assignment.
But convincing the responsible cabinet Minister to legislate solutions is only the first step in dealing with a problem as challenging as the survival of Canadian media. Without sign-off from the PMO and senior cabinet ministers, the media file goes to the bottom of the Parliamentary pile.
The Liberal government has been studying the vexing problem of media and local journalism for five years now. In 2017 a Liberal-majority parliamentary committee told them what to do. The CRTC gave them options in a major report issued the same year.
The government appointed a blue-ribbon committee that in early 2020 gave them a roadmap for legislative reform.
Now the Prime Minister just has to decide if he wants to do something.