#MSM Haters Rejoice, Federal Budget Does Little to #SaveLocalNews 

February 17, 2018

The underwhelming response in the federal budget to the crisis in Canadian print journalism was long expected.

Heritage Minister Melanie Joly habitually labels the Press “a failing business model” unworthy of a “bailout.” Finance Minister Bill Mourneau’s own indifference has been ill-concealed.

A year after Joly’s consultant Ed Greenspon documented the dire future of a news industry starved of advertising revenues— findings that were loudly echoed by the Liberal-dominated Heritage Committee— the federal cabinet has approved two limited measures.

The $75 million Canadian Periodical Fund will be expanded by $10 million. The money will undoubtedly do some good for community news outlets that get a slice of it, but Heritage spokespersons were unable to clarify if mid-sized or large urban daily papers will be eligible.

To benchmark the scale of that $10 million figure, recall the industry group Newsmedia Canada had lobbied Ottawa for $350 million to provide a 15% subsidy of editorial costs for Canada’s 100 daily print and online news outlets. The Liberals themselves bestowed a much needed $150 million annually on the CBC.

It would have come at a political cost for the Liberals to subsidize commercially owned news outlets, even if journalism is acknowledged by all as a public good. Opinion polls on public aid were lacklustre. In fact it’s become a Canadian pastime to slag our #MSM (mainstream media) like the Toronto Star (“too left!”), Postmedia (“too right!”), and Bell CTV (“too rich!”). You have to know that the only thing the Liberals want to do less than throw a life line to their nemesis Postmedia is to throw a lifeline to Postmedia and take political flak for doing so.

But even if subsidies to the independent Press were politically toxic to the Liberals, solutions more palatable than government cheques were available. Many policy commentators including Unifor recommended (https://www.thestar.com/news/canada/2017/01/23/tax-law-tweak-could-bring-millions-to-canadian-media-study-finds.html ) closing the digital loophole in section 19 of the Income Tax Act. Aligning the tax rules for online advertising (mostly Google and Facebook) with TV and print advertising would have driven about $250 million of Canadian advertising from Google and Facebook back to Canadian news outlets starved for revenues.

A nice surprise however was the Finance Minister’s announcing a study of tax rules governing charitable status to assist journalism, an idea which he had dismissed only a few months ago. Still, eighteen months after Joly kicked off her public review of Canadian media, Ottawa will begin to study the issue.

As token as these new policy measures may be, the Liberals now acknowledge that journalism is a public good, it’s in crisis, and a solution needs to be found.

That Liberal acknowledgement likely would not have happened without the political noise across the country, particularly in Quebec, and 300 layoffs at community papers closed by Postmedia and Torstar in November.

Canadian newsrooms have shrunk by 25% since the Liberals took office. With more newspaper closures and journalist layoffs in the months to come, we will be having this same discussion at the next federal budget and the 2019 election.

Why the Piracy Defenders Have It Wrong

February 7, 2018

When you get a heated reaction to a common-sense proposition, there is usually something else going on.

So it is with the criticism of Fairplay Canada’s anti-piracy campaign launched last week.

It’s common sense that stealing is wrong, theft has victims, and that the rule of law (and basic morality) demands something be done about it.

But it’s nearly impossible to enforce the rule of law against offshore pirate websites. It’s an endless game of whack-a-mole. Hence, the website-blocking proposal from Fairplay Canada, targeting only “blatant pirate websites.”

Fairplay’s vocal opponents —including copyright lawyer Michael Geist, Open Media, and other Internet libertarians— have had to figure out how to deflect the basic logic and fairness of the anti-piracy campaign.

Geist’s stuff is red meat for the conspiracy-minded. He sees a slippery slope from blocking full-blown pirate sites to government censorship of the rest of the Internet. Lots of Internet fans eat it up.

Geist also says the Fairplay proposal is flawed because there are no judges involved in vetting the pirate most-wanted list before blocking.

As the lawyer Geist knows, CRTC commissioners are administrative judges, hardly an uncommon status throughout Canada’s legal world. They may not have the lifetime job security of the black-robed judges that Geist favours, but they are the expert adjudicators in the telco/broadcasting universe, and they are appointed by the same federal government that appoints their black-robed counterparts. Even if the CRTC commissioners somehow couldn’t distinguish a notorious pirate site from free expression, the Federal Court of Appeal would step in.

Keep in mind the website-blocking proposal is not about legal speech, or even speech at all. It’s the digital equivalent of padlocking a warehouse full of stolen DVDs. The slippery slope argument is a specialty of interest groups like the anti-gun NRA: if you ban assault weapons, they will take away your Derringer, so never mind the carnage.

As we know from recent events in Kenya, an authoritarian government willing to shut down television stations for broadcasting its political opponents does not need a legal slippery slope. They just do it.

But this is Canada, with a powerful tradition of rule of law and freedom of expression, not Kenya, Russia, or wherever.

The other major objection to the Fairplay proposal is nicely summed up by a recent post on our Facebook page: “I would not even attempt alternate sources of streaming if satellite TV was reasonably priced and completely tailored to my needs.”

No doubt “alternate streamers” think cable companies charge too much for movies, and really why can’t they be more like Netflix? Meaning, if we could stream all the movies and sports we wanted for $10.99 per month, we wouldn’t “alternate stream” pirated content.

When you hold that argument up to the light, however, it’s a different story

First, credit where it is due. You have to acknowledge Netflix’s amazing success. It is now the number one Canadian video channel, thanks to its easy navigation tools, massive global scale, and a loss leading monthly subscription rate. Keep in mind, Netflix has never made money and is in billions of debt.

But you can’t get most second-window hit movies on Netflix, which is what gets pirated. Neither does Netflix stream the international football games that draw so much pirate traffic because they cost too much to re-sell for $10.99 per month. Our cable companies, by contrast, pay top dollar to buy these hit movies and big sports feeds and so they re-sell them for what they are worth.

Nevertheless, if our media companies should be more like Netflix, they certainly are giving it a shot. Up against the Netflix colossus, Bell Media is competing with Crave TV ($7.99 monthly). Rogers and Shaw launched Showmi at $8.99 monthly, but it went bust. Bell just launched its free short-video app Snackable TV.

The irony is that is that even at $10.99 Netflix is priced too much for some people. Around the globe, Netflix and other streaming companies lose $30 billion annually to pirate sites, and climbing every year.

Movie-theft is not a victimless crime

January 30, 2018

The opposition to Fairplay Canada’s campaign against movie-thievery arrived on-cue, and off-key, as expected.

The industry coalition of Canadian unions, guilds, broadcasters, and film studios is asking the CRTC to stop the whack-a-mole game of chasing offshore pirate websites and institute an effective geo-blocking regime that stops the most blatant theft sites. Twenty countries including Great Britain, France, South Korea, Portugal, Spain, Norway, Greece and Denmark have already done what Fairplay is proposing: protect their own cultural industries from thieves.

The Fairplay Coalition, including the media unions Unifor, ACTRA, IATSE, and the Director’s Guild, wants a stop to the job-killing drain of $500 million annually from the Canadian movie and TV industry.

Predictably, the apologists for the big rip-off claim to speak in the name of Internet freedom, using the tired gun-nut argument that if government curbs the freedom to be extreme, then tomorrow we will be living in a police state. To quote Open Media’s Laura Tribe, “it will be an official Internet censorship committee…and open the door for overreaching censorship in Canada… like using a machine gun to kill a mosquito.”

Well, it hasn’t happened in any of the democracies that have taken action.

University of Ottawa copyright prof Michael Geist, the best known libertarian voice for a world wild web, says that a website blocking law would be without judicial oversight. He’s wrong: the Federal Court can review any CRTC action.

He casts doubt on the actual size of the massive revenue leak, meaning it might only be $250 million instead of $500 million: as if stealing fewer millions would be okay.

More to the point: do the Internet libertarians have any clue about the impact on honest hard-working Canadians toiling in our TV and film companies that are losing these millions?

Film set hairdresser Peggy Kyriakidou is one such media worker.

“Making a decent living in the film industry is a struggle,” said the single-mother working in Toronto’s film business for the last 25 years.

“The work isn’t steady and our incomes are dictated by the profitability of the studios. It’s tough making ends meet. Stealing movies makes it so much harder.”

Bell Media CTV’s crime reporter Stéphane Giroux sees it the same way:

“We’ve had layoffs at the Montréal station and we work hard to deliver important local stories under tight budgets,” said the 25-year veteran on the Québec news scene.

“People imagine broadcasters are rolling in money, but only a handful of local TV stations in Canada turn a profit. Our owner makes money on its movie business that it spends on local news. We can’t afford to have millions stolen by pirate websites.”

It’s look-in-the-mirror time for us all, not just Mr. Geist. Is it okay to steal from Bell (which employs 50,000 Canadians), Rogers (25,000), Shaw Communications (20,000), or Québecor (10,000) because they are “big” and “they can afford it.”? Peggy and Stéphane would say no.

How many Canadian media workers have to pay the price for piracy before we stop taking the name of Internet freedom in vain?

The Torstar Postmedia Swap: Collusion By Any Other Name

December 8, 2017

On September 28 when Heritage Minister Melanie Joly announced she was doing nothing for local news, but that local news was nonetheless a “pillar” of her vision for media, I said to myself: it’s going to take bodies, lots of bodies.

Here are the bodies: Postmedia and Torstar announced on November 27th they were swapping local weekly and daily papers. Thirty-six of them immediately closed, 21 by Postmedia and 14 by Torstar, including dailies the Orillia Packet & Times, the Barrie Examiner, Metro Vancouver, and Metro Winnipeg. Three hundred journalists and media workers were fired.

The swap and close was a workaround federal collusion laws. It is of course, collusion by any other name. Both Postmedia and Torstar claim they had no idea the other would close almost all of their newly acquired papers, despite doing exactly the same thing at exactly the same time.

The closings were driven by plunging newsmedia revenues. Postmedia consolidated its Ottawa footprint as Torstar mostly withdrew from the capital region. Torstar consolidated in the Niagara and Kawartha regions as Postmedia stepped back.

Postmedia’s Paul Godfrey was not especially skilled in his corporate humility, wasting no time in (correctly) blaming Minister Joly for her inaction. Annoyed, the Minister shot back that the closings were “cynical.”

Torstar meekly protested that it was not creating news deserts (only news monopolies).

The news deserts aren’t far away. When Torstar bought the Cambridge Reporter in 1999, a Torstar executive told me that “we didn’t buy [the Reporter] just to close it.” This despite the Reporter being a competitor to Torstar’s larger daily in Kitchener

Four years later, they closed the Reporter.

The federal Competition Bureau announced it will investigate the latest swap and close.

Don’t expect much. In 2014 Black Press and Glacier Media did the same thing, swapping and closing a long list of weeklies in British Columbia. The Bureau did nothing, likely because advertisers still have lots of ways to reach consumers, including television, radio, Facebook and Google. And on the reader side of the equation, losing access to a free commodity doesn’t sound much like a restraint of trade.

Mind you the political atmosphere in 2017 is different from 2014 and the change in government makes interesting speculation about what the Competition Bureau might do. The Trudeau government has been embarrassed by its lack of action on local news and a scapegoat could be just the thing.

Meanwhile, nothing has changed the basics of the local news problem. Google and Facebook have irreparably broken the link between advertising revenue and journalism. The Liberals are either going to do something about this or watch journalism die on its watch.

It’s time for the Liberals to put ita money where its mouth is and save local news. They’ve been offered a full menu of options by Unifor, Newsmedia Canada, its own consultant in the Shattered Mirror report, and notably by the Liberal-dominated parliamentary Heritage Committee.

It’s not just financial assistance that’s needed. It’s leadership. If it weren’t for Postmedia and Torstar’s collusion, many of those 36 local papers might have found new community owners, including employee co-ops, and survived a few more years while the Liberals make up their minds about saving journalism.

In fact, the Liberals could even think about a quid pro quo. In exchange for serious federal assistance to local journalism, news companies planning to close local papers would be obliged to provide public notice of closing, repudiate collusion aimed at creating news monopolies, and co-operate in the transition to community ownership.

That would be federal leadership.