The Reuters Digital News report on journalism was released in June and MediaPolicy posted observations about both the global results and the Canadian outcomes.
Another month and another report, the July survey results from Pollara titled “trust in [Canadian] media” are available:
The new poll asks some good questions and gets some intriguing results. Here are a few that I found insightful:
With nine out of fifteen million Canadian homes subscribing to cable with a CRTC-capped price on local stations, “legacy” television remains the dominant news provider. Together radio and television broadcasting are heavily favoured by boomers (born before 1965) but clearly not by Gen Z or millennials (born after 1980) who are committed in large numbers to getting their news from organic posts or through hyperlinks on social media platforms. That generation gap is Pollara’s headline observation. But the same data reveals a narrow generation gap in consuming text journalism offered online by newspapers and other media providers. That’s encouraging:
In general, public opinion on “trust” in media often presents as a riddle: individual news consumers appear to equate “trust” of a news outlet with their own loyalty to a news outlet. This poll asked respondents for their top criteria of what they mean by “trust” and pollsters got this result when respondents were asked to pick up to three answer statements:
The respondents’ top ranking of accurate reporting (67%) and unbiased reporting (59%) is a “good” answer, as is the ultra low ranking of “express an opinion that matches mine.” (3% of respondents)
That public altruism is difficult to square with the same question in the Reuters survey which included the answer statements “represent people like me fairly” (65%) and “similar values to me” (56%).
The Pollara poll got similar results to Reuters by finding a gap between news consumers’ trust in their preferred news outlet, versus the ones they dislike or don’t follow (see slide 15).
For a little fun as the long weekend ebbs, try this little exercise: mark each of the top ten Canadian news sites on this slide as “conservative,” “centrist,” or “progressive”:
Again just for fun, you can check your answers against this slide on popularity of news outlets measured by “voter intention:”
To conclude, consider whether there is a correlation between your results and Conservative leader Pierre Poilievre’s positions on news journalists, news outlets, and defunding the CBC.
And have a good week.
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This week MediaPolicy posted again about local television news.
The occasion is that the CRTC is kicking off a new proceeding to reconsider the Independent Local News Fund. The gist of the post is to observe that it’s a very difficult task and asks the disruptive question: who needs news journalism subsidies more than others?
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There is a report out of Australia that Google has renewed its three-year licensing deals with news outlets, keeping the platform from being regulated by the News Media Bargaining Code, the equivalent of Canada’s Online News Act. It’s five year deals don’t expire until 2026. The recent renewals are for recurring one-year terms, inviting some reading of tea-leaves as to Google’s long term intentions.
The value of the deals are not being released, consistent with Google’s strategy of keeping the public, governments, and news outlets in other countries guessing about the value of compensation.
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The CRTC’s June 4th ruling on audio streamer contributions to Canadian media funds was pegged at an unexpectedly high 5% (reduced to 4.65% if you deduct the portion that can be withheld by streamers to spend directly on Canadian music).
If you listened to Michael Geist’ recent podcast interview of ex-Spotify chief economist Will Page (I recommended it last weekend) you know that the streamer industry believes the 5% contribution is outrageous and could provoke global music streamers to at best raise subscription prices or at worst exit the Canadian market.
This week the global music labels chimed in: here is a statement from Music Canada’s Patrick Rogers making the same prediction.
My own view is that the 5% is too high, although I haven’t written at length about that (another day). But note that the streamers and labels are not offering to match lower contributions to any special efforts to make Canadian music discoverable. That’s how Canadian radio does it.
As for the audio streamers’ ability to absorb the 5% hit, obviously the Tech conglomerates YouTube, Apple TV and Amazon are able to fight for market share with no expense spared. On the other hand, the industry leading Spotify does not enjoy that advantage. Instead, Spotify has been raising prices and laying off staff. Its most recent quarterly disclosure announces a 29% profit margin.
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The National Basketball Association has refused to renew its television deal with TNT Sports (owned by Warner Brothers Discovery).
TNT has held the rights for 40 years and was coming off a nine-year deal that included a right-to-match any better offers. Warner said it matched the new offer from Amazon, Disney and Comcast’s NBC Universal. The league said it didn’t. They’re off to court.
Major league sports programming is the biggest and most reliably monetized content in television. So much so, that sports-only streamers like DAZN have driven the value of rights steadily upwards. The Big Tech streamers are also in the rights bidding picture, nibbling away. This is a big bite. If Amazon wins this fight, look to other streamers to up their game.
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The great CBC rethink is picking up steam among policy commentators. There’s an intelligent piece from David Skinner here. It touches on too many important ideas to summarize, but it’s well worth the five minute read.
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Errors, omissions, and corrections: three of them in one week (but only one is my fault!).
In a post last week MediaPolicy analyzed an opinion poll conducted by Public Square on behalf of The Hub. My post noted the nefarious fact that only six of the 24 questions —-the Hub article said there were 24 in all— were published. After publication, the good folks at The Hub clarified that the “24 questions” included multiple choice questions. The Hub sent me the full results and indeed no questions or answers had gone unpublished.
In previous posts I estimated that the $200 million figure provided by the CRTC as the total amount of annual streamer contributions to Canadian media funds was likely divided $150 million for video and $50 million for audio. My estimate was an extrapolation from 2022 data available on the CRTC website. When I asked the CRTC to confirm or clarify the $150 and $50 million figures, its spokesperson declined to comment. However in the Commission’s recent Notice of Consultation concerning the Independent Local News Fund, it specifies that the 1.5% tranche from the video streamers’ overall 5% contribution is worth $42 million. Doing a little math, that means the overall video streamer contribution is $140 million, not $150 million. While I am on the subject, I should remind readers that the CRTC’s ruling allow streamers to hold back a portion of the levy to spend directly on their own Canadian content: 1.5% of 5% for video and 0.35% for audio. Accordingly, the contribution figures of $140 million and $60 million will be lower.
I made a howler of a typographical error in my Friday post, it will amuse you. Here’s the corrected sentence, the bold text was missing in the original: “Finally, a third very taboo question is not asked: what’s an “underserved market” after Pierre Poilievre’s Conservatives follow through on their promise to close English-language television CBC stations?”
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The CRTC has launched its long-delayed proceeding to sort out what to do with the Independent Local News Fund.
The ILNF is an $18 million per year subsidy for broadcasts of original local news. It supports 19 independently owned television stations in 13 markets located in small cities (but also Hamilton and St.John’s). Here’s the latest distribution report from the Canadian Association of Broadcasters:
The $18 million comes from a CRTC “local expression” tithe on Canadian cable company revenue, precisely 0.3%. A recent regulatory filing by those stations acknowledged that the subsidy underwrites a staggering 70% of news production costs.
The CRTC created the $20 million ILNF in 2016: until then a smaller $10 million per year fund had been available only to small market broadcasters, regardless of corporate ownership.
Alas the CRTC’s approval of the Rogers-Shaw merger in March 2022 upset the ILNF apple cart. In selling to Rogers, Brad Shaw cut loose his family’s debt-laden Corus Entertainment property, including its 15-city Global News chain. That meant Global lost the annual $13 million in special news funding owed by its former parent cable company.
On the other hand, as a newly “independent” broadcaster, Global had a slam-dunk claim to a share of the $18 million ILNF fund. But based on its size, Global would be entitled to at least half the fund, beggaring the other 19 stations.
Faced with that regulatory conundrum, then CRTC Chair Ian Scott shrugged and said, in so many words, we’ll get around to that later, thanks.
Two years later and here we are. At least two important things have changed. First, Corus and Global stand on the brink of insolvency or else some Houdini-style refinancing. Second, the CRTC has just ordered online streamers to pony up 1.5% of annual revenues for the ILNF, approximately $42 million annually. In theory, the ILNF is now flush.
At least two important things have not changed.
The first is that television remains the top distribution platform for Canadian news journalism.
The second is the economics of local news broadcasting. Canadian conventional television (i.e. local stations that belong to either major networks or independent owners) has been unprofitable since 2012 and more recently in 2023 operated $423 million in the red (a thirty per cent loss margin). Meanwhile, stations spend $379 million on news production. According to a data tabulation prepared by Statistics Canada for Communications Management Inc., 84% of stations lose money, regardless of ownership. These are the inconvenient facts.
The Commission plans a big rethink of local news funding some time in 2025 but in the meantime, they are going to figure out the ILNF. It seems to be avoiding the simple solution which would presumably be thus: subsidize Global stations in the same manner as the other 19 stations. The injection of cash from the online streamers permits that.
Instead, the Commission is ruminating big changes to the distribution of the news production subsidy.
The first question is whether online news broadcasters —those without a CRTC license governing over-the-air television signals— could become eligible for the ILNF. The possibility of admitting registered Internet broadcasters suggests a proliferation of applicants to the ILNF, even American-owned in theory. It also raises the brain-teasing question of whether the video-heavy news websites run by licensed broadcasters are eligible too.
The second question posed by the Commission is whether ILNF dollars should be prioritized for French language news and for “rural, remote and underserved communities.” Up until now, ILNF funds have been dispersed on the basis of independent ownership status. Out of curiosity about the potential definition of “rural, remote and underserved communities,” I put together the spreadsheet below (ILNF recipients in red). Feel free to respond to me with corrections:
Finally, a third very taboo question is not asked: what’s an “underserved market” after Pierre Poilievre’s Conservatives follow through on their promise to close English-language CBC television stations?
The riddle of news production subsidies will not be easily solved by the Commission, especially in the context of this new proceeding for the ILNF.
Television news is part of a larger news ecosystem, including online, print, and radio. Support for news journalism consists of several overlapping federal and provincial government programs, public broadcasting, Google’s licensing payments and CRTC levies. As well, the eligibility criteria is not uniform: for example television news websites are ineligible for federal dollars.
The Commissioners have their work cut out for them.
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It’s possible that readers of this space have figured out that I start my day with the Globe and Mail. The print edition home delivered, thank you very much.
That’s for many reasons, including the beat reporters who do such a good job covering media policy (a shout out for Marie Woolf and prior to her Alexandra Posadzki and James Bradshaw). It amazes me they can get a handle on complex regulatory issues as adroitly as they do. Journalists, like lawyers, are quick studies (but paid so much less).
The Globe’s Editorial Board, now that’s a different story.
In response to the CRTC’s $200 million Canadian content levy on foreign streamers last month, the Globe advocated for the full deregulation of Canadian broadcasting. Instead, financial aid for Canadian drama programming, musician development and local news currently tithed from major Canadian broadcasters and US streamers would be replaced by federal subsidies created by…. defunding English language CBC television.
As you can see, it’s a meaty editorial. And well salted. The beneficiaries of Canadian content tithes are snidely identified by the billionaire-backed Globe and Mail as “assorted worthy groups.” Yes, those would be independent Canadian television producers, Canadian bands, small market radio stations, and independent television stations broadcasting in small and mid-sized cities.
Then there are the factual errors: “Netflix already spends substantial sums on Canadian content,” says the Globe. They do? Name a figure. Name some Canadian originals Netflix made. Somebody’s been reading off of the Hollywood Motion Picture Association’s lobby notes.
More cogently, the editorial argues that broadcasters’ and streamers’ ability-to-pay the regulatory cross-subsidies of key cultural and news content identified in the Broadcasting Act is not what it once was and that burden ought to be shifted from media companies and their customers to governments and their taxpayers.
The editorial reads very much like an opinion column or six you might have read under the byline of Andrew Coyne, the Globe’s libertarian-in-residence. I’m tempted to rebut further in the interest of perspective and context, but I already did.
By coincidence, this week MediaPolicy published two posts which bear upon the issues raised in the Globe editorial. The first is my argument that the Online Streaming Act, which updates the Broadcasting Act for the Internet era, rests on consensus liberal values shared by most Canadians. So perhaps we can stop carrying on like it’s a winner-take-all culture war to be fought between ideological hostiles.
The second post offers some thoughts on a recent opinion poll on news funding, commissioned by the conservative opinion website The Hub. My conclusion is the same: there is more we agree upon than disagree on Canada’s media policy. Let’s take the heated debate down a notch.
The new co-CEO Troy Reeb is trying to buck up shareholder and employee morale by saying that Corus can replace the profitable lifestyle television programming it just lost to Rogers with new US shows and that Corus still has a vibrant schedule of Canadian shows for Canadian audiences.
Unifor National President Lana Payne, a former journalist, issued a statement in which she said “the media sector is under extreme threat, and we are at a critical juncture where we need life-saving intervention, including a plan from every single political party in Canada, to save local news. We would expect this necessary plan to receive all party support so that media workers can see this country supports fact-based journalism and democracy.”
Unifor represents Global TV employees across the country.
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Last week MediaPolicy updated you on Paramount’s sale to Skydance Media.
There’s more activity in Hollywood this week. Netflix issued a positive quarterly report, solidifying its position as the runaway industry leader.
Elsewhere, debt-burdened Warner Brothers Discovery is reported to be considering splitting the company in half, but not into its pre-merger constituent parts. Instead, the reshuffle would cut loose studio production and the Max streaming platform, debt-free from the struggling cable business.
If you have a taste for digging deeper into music streaming and CRTC regulation, there’s a Michael Geist podcast with guest Will Page you should listen to. MediaPolicy has posted before about Page, Spotify’s former chief economist and current proxy spokesperson. He’s got some definite opinions, specifically he is opposed to any and all regulation of music streaming and he wants to tell you why.
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Last week the conservative opinion website The Hub collaborated with the pollster Public Square to publish a public opinion survey in support of three public policy recommendations, posed as an alternative to the Liberal government’s program to address market failure in Canadians news.
Despite the gloomy headline it’s a refreshing dialogue, more constructive than the position taken by The Hub’s preferred candidate for Prime Minister, Pierre Poilievre. If elected, Poilievre plans to “defund the CBC,” repeal the 2019 federal aid to written news journalism, “kill Bill C-11” (which authorizes mandatory subsidies to broadcasting news), and kill Bill C-63, the Online Harms legislation. So much killing.
Less bloody minded, The Hub proposes to replace Ottawa’s $35 million per year Journalism Labour Tax Credit by greatly expanding its companion Reader Subscription Tax Credit. The Hub also recommends making for-profit news organizations eligible for charitable donations and converting the CBC into a national wire service for local news.
The first two recommendations are built on the Public Square survey, of which six of the 24 questions and answers have been published while the other eighteen have been withheld. [Note: Public Square has clarified that the “24 questions” include sub-field responses to the six questions in total.]
The poll identifies a lack of trust in subsidized media, the jump off point for The Hub recommending a larger role for private choice in allocating subsidies. In a nutshell, the polling results suggest a low level of public awareness of the existing Labour Tax credits that subsidize journalist salaries but, at least hypothetically, a real public concern about the risks of government funding of news journalism.
This leads The Hub to recommend that policy makers prioritize subscription rebates and charitable donation write-offs as better public subsidies than the federal Labour Tax Credit’s that currently reimburses news outlets for 35% of journalist salaries.
Because The Hub anchored its recommendations in the Public Square poll, the survey deserves a closer look. Where I am going with this is to suggest that regardless of the merits of the recommendations, building them on the foundation of a poll on public trust in media neither advances nor undermines them. Declining trust in media and other civic institutions is a decades-old trend, an intractable problem that has very little to do with news journalism.
The Public Square survey is thankfully not one of those polls torqued with loaded questions about the federal government’s media strategy (I could point toa few others).
But it’s the nature of the polling beast that questions drive answers. When it comes to detailed policy issues, it’s difficult for a pollster to phrase a question for a broad and relatively underinformed public audience that isn’t interpreted by respondents in very different ways.
trust in news outlets
When respondents were asked by Public Square to choose a general statement that comes closest to “your views of the news in Canada,” the available answers included “most of the news is biased,” “I don’t get the truth from mainstream news,” or conversely “I know I’m getting the truth from mainstream news.”
Putting aside the fact there is no statement querying public trust in “non-mainstream news,” the trouble with the question is that it’s like sticking a thermometer in the ocean and declaring the results to be a weather report. Does anyone really expect to get “the truth” from all news stories and all news outlets all of the time?
By contrast, when Reuters polled on “trust in media” it carefully asked if respondents “think you can trust most news, most of the time.” The results, while far from encouraging, ran about 20% higher than the Public Square findings.
Another vexing topic probed in the Public Square survey is public attitudes towards government funding of news journalism (despite important funding details and newsroom practices enforcing editorial independence not being well known).
On that point, Public Square asked respondents to choose from among a number of key statements such as “government paying journalist salaries” and “I trust the government to decide which specific news media qualifies for funding.” (Emphasis added).
I’m betting 99% of Canadians have no idea that the gatekeeper of subsidies under the federal Qualified Canadian Journalism Organization program—including The Hub’s favoured Reader Subscription Tax Credit— is not a “government” official but in fact an independent advisory board of journalism professors and retired journalists. That independent board has successfully avoided controversy since the program began in 2019. Its denial of QCJO status to Rebel News is the exception that proves the rule of its independent gatekeeping.
But putting aside my nitpicking, the most important thing I can say is that the decline in trust in media is as about as relevant as whether teenagers respect their parents. Declining trust is decades old, world-wide, applies to all civic institutions and is far worse in the United States which sports no public subsidies to news journalism at the federal level with only a handful of state programs.
To hammer that nail, consider that the Canadian decline in trust in media began well before the Trudeau Liberals’ first foray into news subsidies in 2019. No, the decline in trust problem is better understood as a rise in civic alienation problem, and a deeply concerning one.
But let’s get back to the recommendations.
in us we trust
In recommending news media subsidies channeled through readers and donors, I believe that The Hub grasps that the task of any successful program of publicly supported news journalism is to engage the 85% of Canadians who say they won’t pay for news. Yes, that includes some news junkies who perversely insist on free content. But the cohort we must be most concerned about is the vast majority of Canadians: casual news consumers who will never pay but must remain engaged in our liberal democracy.
That’s why The Hub’s recommendation of juicing the Liberals’ Reader Tax Credit is appealing. The idea is to put government dollars in reader pockets so that individual Canadians choose which news outlets get subsidized while getting their own content for free.
The current version of the federal Reader Tax Credit is anemic: it’s non-refundable at 15% of paid subscription dollars, capped at $500 in subscriptions (i.e. reducing income taxes owed by $75). The Hub would enhance it and make it refundable like political contributions. In this way, casual news consumers, presumably heavily represented among low-income earners, would be incented to take out a subscription.
It’s an appealing public policy tool with its emphasis on private choice. There are some design challenges that come with it. Will Canadians in this target audience be patient enough to wait up to 18 months for their rebate? What about Canadians that don’t earn enough to bother filing income tax returns? It would help if Revenue Canada would publish a demographic analysis of who has been claiming the current subsidy for the last five years.
There’s one other thing we should be clear-eyed about when advocating for reader tax credits. While reader subsidies are likely to reward editorial excellence, they will also reward partisan reporting of the news. Reader subsidies will weaponize the existing practice of newsroom editors chasing and retaining readers by publishing content that appeals to their prejudices, not necessarily their eagerness to reconsider them.
donating to journalism
Aside from rejuvenating the Reader Tax Credit, The Hub also recommends exploiting the Liberals’ 2019 changes to the tax code that made donations to non-profit news organizations eligible for income tax deductions. The recommendation is to extend this charitable status to for-profit news organizations. This is currently the practice in the United States.
Pursuing more donor dollars is worth considering. La Presse has had great success with it, soliciting small donors while keeping subscriptions free.
But as many of the Public Square survey respondents would undoubtedly point out, donations are a significant funding source that might influence the independence of news reporting. Beware the angry philanthropist donor! Again, maybe that’s just a design challenge: like political contributions, charitable funding of news journalism could be capped at modest donations.
At the end of the day there is some public policy experimentation that can be usefully carried out over the next few years for funding news journalism, searching for the right mix of subsidies that limit the dominant influence of any one source.
On that note, allow me to put in a good word for the existing Journalism Labour Tax credits, the direct salary subsidy claimed by news organizations that have been vetted by the QCJO adjudicators as engaging in professional journalism covering original news.
The headcount subsidy is a reliable policy tool in an industry that has always hired journalists on merit in a competitive labour market; jealously guarded newsroom independence from publishers and advertisers; and given great respect to the autonomy of the journalist within the newsroom hierarchy. And I agree with those who believe in rigorous newsroom standards, including binding commitments of news organizations to professional standards.
a CBC news wire
Then there’s The Hub’s third recommendation: don’t defund the CBC. Rather, re-cast its mission critical into a mandate to cover local news as a publicly owned news wire service. That’s a riff on a similar proposal made last year by Peter Menzies and Konrad von Finckenstein. My onlyhesitancy about this proposal (as a full-throated fan of public broadcasting) is what does that mean for the rest of the CBC’s news and entertainment programming?
One of the things that The Hub’s proposal doesn’t address is television and radio news, especially local TV news. Television remains the number one choice for Canadian news consumers.
Up until its recent tithing of US streamers to support broadcast news, the CRTC’s approach has been to mandate Canadian TV networks to produce news, at a mounting and considerable loss, while requiring cable companies (and now streamers) to subsidize non-network television stations. Television companies are also not eligible for federal QCJO payments, even for their news websites. Given the leading role that broadcasters play in our news ecosystem, The Hub might have weighed in on this as well.
What’s positive about The Hub’s venture into the policy debate about market failure and subsidies in news journalism is that we are now debating the “how” rather than the “if” of a public policy response. I hope that means we are getting past the fantasy that there’s a full-fledged market solution hiding behind the nearest bush, if only we could stop public policy makers from propping up newsroom “grant farmers” and force them to innovate or die.
All of The Hub’s proposals are subsidies and I congratulate them on their policy courage. As for role of market solutions, some of the most successful innovators in the Canadian news scene —the Globe and Mail, La Presse and Village Mediacome to mind— are in receipt of subsidies. This hasn’t stopped them from innovating en route to achieving financial sustainability.
As a final word, let’s not forget about our festering “trust in news” problem. As I suggested, the root of the problem is rising social alienation and is beyond the ability of newsrooms to solve on their own.
If we want to get at declining trust in media in a direct way, we would do well to expend public resources on educating young people on how news journalism is made and how to view it with a critical eye.
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“The Peaceable Kingdom” (Painting by Edward Hicks, c.1832) – cover art from Will Klymicka’s book Multinational Citizenship
July 15, 2024
The goals of Canada’s Broadcasting Act, updated by the Online Streaming Act Bill C-11, tell us a lot about who we are.
The bill has a long list of policy justifications for involving the state in cultural creation and discovery, beginning with the mission “to serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.”
In other words, we regulate media for the betterment of Canada, not solely to satisfy the individual appetites of Canadian consumers.
What are we, Canada? Answer: a liberal democracy engaged in a never ending conversation about a society based on the individual rights and freedoms entrenched in our 1982 Charter and, on the other hand, the rights of provinces, language communities, and Indigenous peoples inscribed in the 1867 act of confederation, treaties, territorial claims and the Charter.
The dialogue about who we are takes place as much in Tim Horton’s as it does in the House of Commons. The artistic rendering of who we are takes place in mass media, as does the political debate. The Broadcasting Act regulates some of that mass media: video and audio news, sports and entertainment programming.
Lately, the legislation has been hotly debated, questioned, misrepresented, doggedly defended or just plain misunderstood. In my book on Bill C-11, Canada vs California, I wrote about the mechanics of broadcasting regulation, but also I offered thoughts on why both supporters and critics are drawn to debating it. I posted an earlier version of that chapter, “Telling Canadian Stories,” on MediaPolicy.ca.
There’s yet another angle on explaining our riveted attention to media regulation and, believe it or not, it’s liberal rights theory.
Yup, liberal rights theory and media regulation. You roll your eyes.
Stay with me for a moment.
The reason why the connection between liberal philosophy and the Broadcasting Act is more relevant than might first meet the eye is that Bill C-11 has become a flashpoint for a culture war between the governing Liberals and the Opposition Conservatives.
The bill didn’t start out that way. In fact the Conservatives initially supported the bill when it was tabled in the House of Commons in 2020 by the governing Liberals as C-10. Conservative MPs said the bill was long overdue and that the Liberals’ attempt at updating the Broadcasting Act might be too cautious. At the time, Conservatives supported regulating YouTube and other big content sharing platforms.
It wasn’t surprising that at first Liberals and Conservatives were on the same page about the bill: they had shared more common ground than they had disagreement on the Broadcasting Act, dating back to 1968.
That changed very suddenly in 2021, as I map out in my book. Soon enough Pierre Poilievre swore to “kill the bill”. As a consequence, some version of deregulating Canadian broadcasting is sure to find its way into the next Conservative Party election platform. The Conservative messaging in its opposition to C-11 is currently so libertarian, so hostile to any state regulation of media, that it appears to endorse a wide open global market for cultural content without any special rules to foster Canadian content.
How liberal rights theory fits into all of this is that the cultural mission operationalized by the Broadcasting Act —-which is resisting the market power of American programming by subsidizing and promoting Canadian content—- is in fact an act of small “l” liberalism. And dare I say, in the end as Canadians we are all liberals. Fundamentally we agree upon this: that all Canadians are equal to each other as human beings. That is the taproot of liberal rights.
If so, as liberals we ought to be able to agree on many shared values in cultural legislation, even if we disagree on many points of their application through regulatory activity.
Now what I know or can explain about liberal rights theory, especially as it applies in the real world to cultural legislation, could fill a thimble.
But the writings of renowned Canadian political theorist Will Klymicka are a guide to how to do this.
During the 1990s, Klymicka published a robust theory of liberal rights, as distinguished from the minimalist version offered by students of the great 19th century philosopher Jon Stuart Mill. He was writing at a time of great uncertainty, including genocidal violence, between national majorities and minorities in Yugoslavia and Rwanda. And of course, in the same time frame Québec came within a referendum whisker of leaving Canada.
Klymicka’s project was to explain a theory of minority cultural rights within the framework of a liberal society, a creed that he believed already existed but was poorly articulated.
The starting point of any liberal society will always be the familiar set of personal liberties but, Klymicka wrote, it has to move on from there to build political institutions that mitigate the inevitable cultural domination of the majority “nation” over minority nationalities, ethnic communities and equity-seeking groups. That’s important, he wrote, because the liberal conception of human freedom is about choice, including the freedom of individual members of minority groups to consume culture that is especially meaningful to their pursuit of a good life. The hard-line liberals, such as J.S.Mill, demanded that minority groups assimilate into the majority and, to make that a credible demand, fell back on disparaging minority culture as parochial, illiberal or backward looking.
You may have guessed that Klymicka never considered the application of his writing to Canada’s cultural legislation which stresses the importance of minority culture on two levels.
The first is making breathing room for the culture of English-Canadians as a minority within an American dominated continental market for cultural goods.
The second is creating the same space for the culture of French-speaking Canadians, Indigenous peoples, anglophone minorities, and other domestic minority groups hoping to protect their mass media culture from domination by English-speaking and other majoritarian cultural content.
When you describe the goals of the Broadcasting Act as the pursuit of those public policies, I believe that most Canadians, and most Canadian political parties, see it the same way. The devil is in the details of applying the principles. I speculate, with a careless disregard for taboos, that what roils the debate is the single-minded devotion (and success) of the Québec political class in using the Broadcasting Act for one of the things it was designed to do: strengthen the ability of Québec to protect its French language culture.
Not everyone will read Klymicka’s manifesto, Multicultural Citizenship (Clarendon Press, 1995). It’s dense stuff with a $100 cover price (and not easily available from public libraries). As the next best thing, I recommend Andy Lamey’s The Canadian Mind, an engrossing anthology of essays that includes a chapter on his mentor, Klymicka.
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The Ontario government has announced it will spend $25 million of its advertising budget on news media outlets certified by the federal QCJO program for original news reporting.
That’s a quarter of the province’s annual $100 million advertising budget for government ministries and major agencies. Because of the QCJO requirement, the new spend will go to paper and online “print” media but exclude television and radio broadcasters (including their news websites).
It wasn’t disclosed how much of an increase the $25 million represents within the province’s existing ad spend on print media. Searching for a proxy comparator, a Globe & Mail story noted that the federal government spends about $1 million —-one per cent— of its $89 million ad budget on print media (and $10 million on television advertising). Illustrating that, here’s a graphic from the 2023 federal report on Ottawa’s ad spend:
Print media’s 2023 share of the federal ad budget is quite different from “pre-Internet” days; the earliest data that I can find on the federal website is for 2002 and reveals that the print media share of federal ad spending was 22%:
News Media Canada lobbied for the new policy and so applauded Ontario’s move upwards to the 25% share of spend. Spokesperson Paul Deegan wrote in a Globe & Mail op ed that there are 4,350 news journalists employed in Ontario.
That number suggests the provincial ad spend is worth $5,747 per journalist but, unlike formal programs such as the QCJO federal aid to journalism and the Online News Act regulations, the distribution of the Ontario ad spend is not rationed per news outlet or journalist.
The Globe also story mentioned that government advertising policies to benefit local journalism exist at the municipal and state levels in the US.
Ontario’s ad spending rules are notoriously soft on partisanship, conceding a wide ambit to self-congratulatory publicity by the incumbent government. Old provincial rules that required government ad campaigns be vetted as non-partisan by the provincial Auditor-General were gutted by former Premier Kathleen Wynne in 2015 and, after repudiating its promise to restore the old rules, Doug Ford’s Conservative regime has grown to love the new ones.
The Ontario Auditor-General’s 2023 report says that most of the government’s advertising — promoting Premier Ford’s health and education expenditures— would not have passed muster under the pre-2015 rules.
My sometimes interlocutor on media policy Peter Menzies harshly criticized Ontario’s new ad spend policy as a threat to the independence of the press. Alas I don’t agree. But Menzies does point out that according to the provincial government the ad spend program “will be reviewed on a quarterly basis to ensure it is having the desired effect of promoting local content and culture and supporting Ontario jobs.”
As he says, that’s a short leash for news organizations who write about the government every day.
There’s nothing stopping the Auditor General from conducting a quarterly accounting of how the $25 million is being divided and whether the Toronto Sun does better than the Toronto Star.
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MediaPolicy last reported on the possible sale of US media conglomerate Paramount on April 4th. I decided against updating you on the bidding ping-pong that followed with multiple bids, rejections and suitors.
Now there may be a final deal that sticks on a bid from the original suitor Skydance Media.
That’s the company run by David Ellison, son of Larry who owns the tech giant Oracle and also the entire Hawaiian island of Lanai (sounds like a Bond movie, wouldn’t you agree?). Did I mention that Ellison pater is the second richest man in America?
The deal has a break up fee of $400 million should Paramount owner Sheri Redstone find a better offer in the next six weeks.
Skydance is spinning the new deal as the reinvention of a storied media company as a “tech hybrid.”
There’s a very readable story in the New York Times that opines, in an overstated way, that Skydance is walking into an industry on the precipice of disruption.
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You’ll have to excuse me, I am not up to commenting on this week’s revelations about Nobel Prize winning author Alice Munro’s late husband Gerry Fremlin molesting her daughter when she was nine years old.
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When you find a blog post with Big Facts about the battle for market dominance in global streaming, best to just quote the thing at length. Here is US analyst Evan Shapiro’s latest about King Kong Netflix and Godzilla YouTube:
When Hub asked consumers WHICH services are MUST HAVES, which platforms they’d NEVER cancel, no matter what, the answers likely will surprise most of you.
Spotify is the most uncancellable Media in Media. Netflix is the only SVOD to make the top ten. Sony‘s Playstation+ scores ABOVE Netflix! There are THREE different music services in the top ten – and two [virtual BDUs]! Reading subscriptions – yes, READING – are a must-have for a LOT of digital consumers.
But perhaps most surprising to everyone in the industry is just how dominant YouTube‘s entire suite of services is in the minds and hearts of today’s Media consumers. Four of the top five MUST HAVE/WILL NEVER CANCEL services are from YouTube. [MediaPolicy note: the subscription based YouTubeTV is not available in Canada].
Which brings up two BIG lessons for the User Centric Era:
1. No matter what you do in Media – music, gaming, TV, sports, social, advertising, subscription – your biggest competitor, now, is ALWAYS Youtube. Hi Netflix and Spotify. That means you too.
2. If you are in Media and thinking about bundling, look at what Amazon and YouTube are doing, NOT what Comcast is doing with Netflix, Peacock, and Apple TV+. Amazon may not be on Hub’s must-have list, but that’s because this question was solely about Media, not total services. Yet Amazon’s combo of free delivery, music, TV et al is one of the least-cancelled services in all consumer-dom. (They just raised prices, AGAIN. Did YOU even think about cancelling?) YouTube consumes the mind-space of hundreds of millions of consumers, across multiple verticals, worldwide. This dominance is even greater among those under 40 – THE KEY gatekeepers of expendable income for the next two decades.
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The Australian government’s promise to introduce a video streaming bill (it just uneventfully passed its July 1st target date to table) is a reminder that Hollywood uses the same political playbook in multiple countries.
The local screen industry is asking that the government legislate a minimum 20% of programming budget for Australian content, similar to Canada’s long standing rules on Canadian Programming Expenditures for legacy broadcasters that are generally in the 30% range.
Screen Producers Australia (SPA), counterpart of Canada’s two independent producers’ associations, had this to say in April:
“With commercial free-to-air broadcasters all but having been allowed to give up on commissioning any Australian drama or children’s programs, and subscription television commissioning only the minimum amount required under an outdated 1990s era scheme, we are now faced with a situation in which global streamers are increasingly the masters of Australia’s screen industry, and our industry is at risk of becoming their slaves.”
The SPA says that Netflix and the Hollywood studios are lobbying the Australian government not to proceed (backed by trade threats) or, alternatively, water down the definition of Australian content and rules around local producers’ retention of intellectual property in commissioned shows. That may sound familiar to Canadians following the C-11 debate.
Last year, Hollywood’s Motion Picture Association (Asia-Pacific) applauded the Australian government for doubling film production subsidies that encourage its studio members to shoot in Australia. That’s regulation Hollywood can learn to love.
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On the topic of the streamer playbook in Canada, you may have read that both video and music streamers have filed court appeals against the CRTC’s ruling on financial contributions to Canadian content.
I am going to save my comments until I can review the complete legal filings. My first impression is that these appeals are no-hopers but rather part of the streamer strategy to rag the regulatory puck until federal elections are held in the US and Canada.
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For regulatory nerds, it’s always important to follow Canadian broadcaster deals with American content suppliers because the ability of Canadian television companies to soak up losses in news and Canadian drama has been hitched, for better or worse, to licensing high-margin US content for distribution to Canadian audiences.
When it was announced earlier this month that Warner Brothers Discovery was moving a large swath of its retail distribution of branded programming in Canada from Corus Entertainment to Rogers, the focus was on the devastating impact on Corus’ financial position. The content in question includes HGTV, The Food Network, Magnolia Network, The Cooking Channel, and the Oprah Winfrey Network.
Down a few paragraphs in the Canadian Press coverage, Bell entered the picture with some opaque commentary about the broadcaster protecting its own exclusive rights to WBD branded content in Canada. The content in question is the Discovery Channel, Discovery Velocity, Discovery Science and Animal Planet.
Just what is going on has become more clear now that Bell has filed an injunction against WBD and Rogers. When WBD’s retail distribution deals with Corus and Bell expire at the end of 2024 they will not be renewed and the content goes to Rogers. Bell’s long standing Canadian rights to Discovery-branded content go back in some cases to 1994.
Unlike Corus, Bell appears to have negotiated a non-compete covenant with WBD that lasts for two-years after termination of its programming rights. According to the Bell court filing:
Neither [Bell] nor [WB], nor any of theirrespective Affiliates, shall directly or indirectly file, or support or participate in thefiling of, an application to the CRTC for a licence for Canada for a programmingservice (a “[Competitive Service]”) which is the same as or substantially similar tothe Service (as it exists on the date such party ceases to be a Shareholder), or beengaged directly or indirectly in operating a [Competitive Service] in Canada, ordirectly or indirectly supply programming to a [Competitive Service] in Canada, foras long as such party or any of its Affiliates is a Shareholder of the Corporation andfor a period of two years following the date on which such party or its Affiliate ceasesto be a Shareholder, unless such Shareholder, or an Affiliate of such Shareholder,acquires all of the Shares of the other Shareholder or purchases all of the assets ofthe Corporation…. [Emphasis added.]
Bell has asked the Federal Court to issue a snap injunction blocking the Rogers-WBD deal. Bell will have to convince the court that its financial loss from losing WBD content can’t be remedied with compensation at the end of a years-long legal battle.
Rogers and WBD haven’t filed their responses yet.
News reports suggested that the Rogers-WBD deal was a Corus killer. Bell Media is of course twice the size of Corus Entertainment at roughly $2 billion in annual revenues for its two major television divisions, network television and cable specialty.
At $943 million in annual revenue, Corus relies more heavily than Bell on US programming. Corus forks out $444 million on American shows compared to spending $338 million on its Global News network and Canadian entertainment. Within its US programming portfolio, the WBD-branded channels earn Corus $137 million in annual revenue, fully 15% of its total television revenue. Losing it is a grevious wound.
Bell Media is far less reliant than Corus on American programming. Bell spends $661 million on US content compared to $926 million on Canadian news, sports and entertainment. It’s soon to expire Discovery licenses earn $107 million, about 5% of Bell’s $2 billion in total television revenues. That’s not a flesh wound either.
A major legal spat between Bell and WBD over Discovery-branded content could spill over into their other significant content deal for HBO shows that is the keystone of Bell’s Crave TV business.
When the long standing Bell/WBD deal for HBO was extended last year it was seen as a reprieve from WBD taking that content off of the Canadian retail market and instead launching HBO Max as a direct to consumer rival to Netflix Canada. Now it seems like WBD might entertain a different option for its HBO programming: a bidding war between Rogers and Bell for cable rights, with the fallback of launching Max on streaming.
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I have a recommendation for how to spend your next ten dollars. It’s Canadian journalist Paul Wells’ hour-long audio book Justin Trudeau on the Ropes.
An admission: I’m a devoted reader of Wells’ Substack blog. The veteran Hill reporter has great command of every major policy file and terrific delivery, in any medium. His work also satisfies my ecumenical interest in conservative writers whose tendency, when backed into a policy corner, is to insist that the free market will provide a solution that we can’t see at the moment. Sometimes they are right, sometimes they aren’t. If I could match Wells’ 25,000 Substack subscribers and $1.5 million in annual earnings, I’d be a believer too.
Wells’ even tempered evisceration of Justin Trudeau is not a screed. It boils down to his conviction that the twenty-third Prime Minister of Canada is far too absorbed in political messaging than he is in serious governance. At the moment, about 80% of Canadians agree.
There are times when Wells’ harsh conclusions about Trudeau seem bang on, other times when you have to wonder about the absence in his narrative of the non-stop demonization of the Prime Minister and filibustering of his Parliamentary agenda by Conservative premiers and federal Opposition since 2015.
Also I am influenced in my opinion of Wells out of my immodest conviction that I know more than he does about only one thing: Canadian media policy. His shallow and breezy condemnation of Trudeau’s federal aid to journalism was a real disappointment. In another podcast, where Wells collaborates with Andrew Coyne, the two dismiss the Online News Act as self evidently unmerited, even though as free market advocates they ought to be confronting how best to deal with Google and Meta’s monopolies on distributing news by Search and Social.
Differences aside, if Wells says at least one thing in his audiobook that I passionately endorse, it’s his analysis of the rising phenomenon of affective polarization: how as citizens we have willfully closed our minds to dialogue with those we regard as the political enemy. We are impoverished for it and on those grounds alone I recommend Wells’ book.
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The CRTC’s June 4th ruling that levied a five per cent Canadian content tithe on audio and video streamers was played in the media, somewhat speculatively, from the consumer angle: would the mandatory contributions be passed along as subscription price increases?
But as MediaPolicy posted , Netflix and the video streamers won’t be paying the full five per cent. The Commission gave them the option to keep 1.5% of the 2% earmarked for the Canada Media Fund and instead spend it directly on Canadian shows for their own platforms. The 1.5% is worth $45 million out of the $150 million annual contributions.
Canadian industry groups have now pointed out the phrasing of the Commission’s ruling is such that perhaps the $45 million doesn’t have to be invested in new shows but can be spent on re-runs of old Canadian shows. MediaPolicy looks into that here.
The general state of streamer financial health is always difficult to capture in freeze frames from quarterly reports. For example on the video side, it’s well known that Netflix is sailing along with record profits. The others are still struggling to get into the black. The prescription seems familiar: more scale, more corporate consolidation, and more hedging of losses by conglomerate owners. On that, there’s a very readable feature in the New York Times that I recommend.
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On Thursday the CRTC launched its public consultation to consider Google’s request to be exempted from the Online News Act Bill C-18 in exchange for $100 million in annual funding to Canadian news outlets.
Last week MediaPolicy noted that Google’s pick for the consortium representing all eligible Canadian news outlets — yes, Google gets to choose— is highly controversial. Google selected the Canadian Journalism Collective (CJC), newly created by a handful of independent news publishers. Passed over was the mainstream consortium Online News Media Collective (ONMC) that represents about 99% of Canadian online news outlets. The gnashing of teeth was audible.
In considering Google’s application for exemption, the CRTC has some power and responsibility to vet the agreement between Google and the upstart CJC. But it’s not clear that the Commission will deal with the most sensitive issues that divide the one per cent CJC and the jilted mainstream news outlets.
The first issue is that the same government regulation that concedes Google the right to pick its own bargaining adversary also downloaded to Google the responsibility to invite applications from news outlets for funding, accompanied by “attestations” from the news outlets that they are in fact “eligible news businesses” under section 27 of the Online News Act. The most important test of eligibility under section 27 is that the news outlet produces original, core news on current affairs.
As it turns out, Google did not vet the attestations. It accepted all comers. Given that the pie of $100 million is fixed, that affects the size of the slices for all news outlets.
The Commission said only this:
All news businesses that submit an attestation in the open call can receive compensation through a group or collective and no mechanism is provided under the Act or Regulations for the attestations to be disputed as part of that process. As a result, the Commission will not consider the validity of attestations as part of this proceeding.
The second issue is whether the news outlets, especially the 99% signed up with the ONMC, will be able to monitor whether the Google cash is being divided up pro-rata on the basis of a headcount of employed journalists, as required in the government regulation. The headcount must consist of employed journalists (i.e signed up for payroll taxes), adjust for part-time employees, and requires a minimum of two editorial employees (including working publishers).
The Google-CJC deal, which the CRTC must ultimately approve as part of the Google application for exemption, grants the responsibility to police itself to the CJC consortium. As written, the deal gives news outlets access to an undefined dispute resolution mechanism but does not provide for disclosure of the crucial journalist headcounts (except in very broad “industry segments,” for example all broadcasting companies as a group). But it’s clear from the Google-CJC agreement that the dispute resolution will not stand in the way of distributing first payments from the $100 million: the CJC will have to try to claw back any ineligible payments.
Not surprisingly, there’s been a flurry ofnews articles appearing in the mainstream press venting anxieties over the potential problems with the Google-CJC agreement.
There’s also a good article published in The Tyee about the dispute that gives voice to the CJC consortium’s views.
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The CRTC’s June 4th “Phase One” ruling on streamer cash contributions to Canadian media funds says a lot of things, alas most of them drowned out by Netflix and the other video streamers’ protests about how unfair the $150 million levy on their Canadian broadcasting revenues is to them.
In the aftermath of the ruling, the Commission has quietly accepted lawyer submissions from all and sundry on the best legal drafting to cover off the general principles it articulated on June 4th.
Some of the issues are dry indeed, for example the exact payment schedule for the $150 million. The streamers want to delay their first contributions to media funds until November 2025, after the federal election, or even put them off further until the Commission confirms the definition of Canadian content.
Canadian broadcasters, guilds and the Friends of Canadian Media are advocating immediate monthly payments to the Canada Media Fund, Indigenous Screen Office, Black Screen Office and the Independent Local News Fund beginning September 2024. The dire financial state of Global News, now eligible for the Local News Fund, may compel the Commission to go with immediate payments.
Another issue is the technical argument made by the US Digital Media Association, Amazon, Spotify and Rogers that the Commission’s Phase One regulatory policy can only come into force following a formal and lengthy Canada Gazette public consultation, something the Commission did not do.
From a policy perspective, the stickiest issue the CRTC might consider in the next few weeks concerns the option it conferred upon the video streamers to claw back 1.5% of their 2% contributions to the Canada Media Fund (CMF). The CMF sponsors original Canadian drama, documentaries, children’s programming and variety & performing arts shows. The claw back is worth $45 million less in streamer cash contributions to the CMF which would otherwise be $60 million.
As it stands, the Commission gave the streamers the option to keep most of their CMF contributions if instead they “make and acquire” their own “certified Canadian content” with the money. On its face, this allows the streamers to “acquire” Canadian content by writing a cheque for re-runs of old Canadian shows, in any genre, and then bury them in their platform libraries.
The creator groups are alarmed by this. They make the case that this cannot possibly be the Commission’s intention if the $45 million rebate represents just a different tool for the streamers to achieve the same programming goals that the CMF supports.
The CMF only finances original, first-release programming in Canadian genres that need the subsidy (certainly not sitcom re-runs, sports or reality shows) and are produced by independent Canadian producers who must hire a “10/10” headcount of Canadian writers, actors, directors and so on.
As the Writers Guild put it:
“In this case, the Commission has proposed an “alternative” or “incentive” which does just that, resulting in vastly different outcomes depending on the alternative chosen. In the case of the CMF, funding goes to the production of new, original content, and does not result in the acquisition of preexisting “library” content that was produced some time ago. The Commission itself states above that the purpose of the incentive is, “To provide flexibility and to encourage online undertakings to produce Canadian content”. This objective is not advanced through the acquisition of “library”content.”
The MediaPolicy view: assuming the Commission is not in the business of devising fake regulatory requirements for the streamers, it may have genuinely screwed up by failing to specify that “original” programming is mandatory and may fix this in the final orders.
On the other hand it’s up for grabs as to what the Commissioners meant when they referred to “certified Canadian content.” That could mean either “CRTC certification” or the higher certification standards observed by the media fund for which the contributions are primarily intended, the CMF.
There’s a big difference.
Unlike the more demanding CMF rules that trigger additional subsidies to independent Canadian producers, the CRTC has historically been relaxed about certifying Canadian programs because in almost all cases Canadian producers have already met the higher CMF requirements before asking the CRTC to certify the same show for clearance to broadcast as Canadian content.
That may be why the CRTC has never bothered with more than “6/10” points; has not restricted spending genres (other than sports); and has never adopted the CMF rule that an independent Canadian producer retain 25-year ownership of the show’s intellectual property because, until now, it didn’t care if the long term profits of a hit show resided with a Canadian broadcaster or a Canadian producer. Now the Commission is regulating global streamers who book their profits outside of Canada, so circumstances are different.
Perhaps the Commission is being overly clever: it may be gifting the US streamers a regulatory break on this small sliver (1.5%) of Canadian content expenditures as a test of their good faith promises to make good Canadian shows with less of what the streamers regard as red tape. A pilot project, in effect.
Whether any of this is fair, not fair or fake, we won’t know until we get to the end of the Commission’s lengthy regulatory roadmap some time in 2026. That’s because the Commission’s heavy lifting is still to come. In the next two years the Commission is presumably going to order the streamers to dedicate a further, significant portion of their annual revenues to making Canadian shows, benchmarked against Canadian broadcasters spending an average of 29% of their revenues. The Commission also expects the streamers to make real efforts to give prominence to Canadian shows on their platforms as Canadian broadcasters do.
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