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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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July 13, 2024

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. 

***

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.

***

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.

But I recommend Ken Whyte’s excellent Substack column.

***

On a brighter note, everyone who loves media needs a good news story now and then. Here’s a heart warming one: the return of local print media to Haidi Gwaii.

***

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July 6, 2024

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.

***

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.

***

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.

***

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 their respective Affiliates, shall directly or indirectly file, or support or participate in the filing of, an application to the CRTC for a licence for Canada for a programming service (a “[Competitive Service]”) which is the same as or substantially similar to the Service (as it exists on the date such party ceases to be a Shareholder), or be engaged directly or indirectly in operating a [Competitive Service] in Canada, or directly or indirectly supply programming to a [Competitive Service] in Canada, for as long as such party or any of its Affiliates is a Shareholder of the Corporation and for a period of two years following the date on which such party or its Affiliate ceases to 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 of the 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.

***

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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Graphic from the Hollywood Reporter

June 29, 2024

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. 

***

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 of news 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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June 26, 2024

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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Cover page from recent Léger poll

June 24 2024

The contrarian in me loves writing headlines like this.

It’s certainly not the headline the National Post chose to characterize the responses to a recent poll question. The Post headline was “Majority of millennials, Gen Z don’t support Trudeau’s internet regulation plans: poll”

The Post’s chief Parliamentary correspondent Stuart Thomson probably didn’t write that headline to his story, but it captures the gist of his coverage of the recent Léger-National Post survey on a raft of policy issues, of which one question was directed at the Liberal government’s policy of Internet regulation:

Note the last in a series of edgy questions: Do you support the government’s new rules to regulate the web, podcasts, streaming and social media to restrict offensive speech and online harms? (It’s not clear if the question refers solely to the Online Harms Act Bill C-63 (“restricting offensive speech and online harms”) or to the Online Streaming Act Bill C-11 as well).

The poll doesn’t give us responses of all age groups, only the 18 to 35 Millenial/Generation Z cohort. The result is 44 per cent in favour, less than a majority. In an additional chart, the poll breaks out the shades of opinion as 14% strongly support plus 30% “somewhat agree” for a combined 44%. There are 16% who registered a “don’t know.” Going the other way, there is a combined opposition of 19% (strongly disagree) and 20% (somewhat disagree) for a final figure of 39% not in favour.

Accordingly, the straw poll for “support” of Trudeau’s policies is a thumbs up, for what that’s worth. On the other hand Mr.Thomson describes the result as follows: “The majority either disagree with the policies (39 per cent) or don’t know (16 per cent).” I can’t find an emoji that does justice to that observation.

Nevertheless the Léger survey is consistent with polling conducted by Nanos Research in April. That survey asked more questions and plumbed the public mood more deeply, as difficult as that is when asking the public about three distinct and complex Parliamentary bills.

The Nanos poll clearly asks about the full suite of three Internet bills, including the Online News Act C-18. It also found that the 18 to 35 cohort (41%) lagged behind the multi-generational results (56%) in supporting the Liberals’ overall regulation program. It identified a similar generation gap in terms of “trusting the government to protect freedom of expression in its Online Harms Act.”

An interesting finding was that the Millenial/Zeders trailed public support for specific regulatory powers to curb online harms but nonetheless demonstrated a high degree of support for take-down orders against hate content (78%), age verification for accessing porn (66%), and increased jail time for advocating genocide (59%).

The clear majority of public support (everywhere except the Prairie provinces) for the Liberal bills runs back many years through several polls, a point I make in my book Canada vs California: How Ottawa took on Netflix and the streaming giants.

One last comment: the National Post story says this:

The government has unleashed a batch of legislation designed to tighten the reins on the internet, including an online harms bill that attempts to restrict offensive or hateful speech and a bill that would bring online streaming services under the umbrella of the Canadian Radio-television and Telecommunications Commission (CRTC), which is imposing quotas for online Canadian content.

That last statement about quotas is incorrect. It’s not even a matter of opinion. The CRTC has done no such thing and in fact it has signalled it won’t.

But it’s a debate worth having.

***

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Unifor National President (left, of course) weighed in on the Google cash controversy

June 22, 2024

It’s never a happy occasion but this week the UK-based annual Reuters Digital News Report was published with both global and Canadian numbers.

Our posts (linked above) are intended to summarize just a few of the reports’ many insights, although I neglected to praise Colette Brin and her colleagues at Laval for their great work on the Canadian drill-down.

***

Last weekend I reported on the controversy of Google picking the darling of the alternative press, the Canadian Journalism Collective (CJC), over the establishment coalition Online News Media Collective (ONMC), to be the bargaining agent in distributing the Google $100 million of compensation payments for Canadian news content hyperlinked on its search engine. The term “bargaining agent” might be a misnomer: the regulations to the Online News Act already distribute the compensation based on a headcount of employed journalists.

The controversy was not just that the CJC was created by publishers representing perhaps one per cent of Canadian journalists and news content. Rather it was the surfacing of the mistrust and mutual enmity between Google, mainstream media and the alternative press over the entire legislative process that drove the enactment of Bill C-18 in the first place.

It’s difficult to see Google’s choice (extracted from the federal government) of the unrepresentative CJC as anything but spite for the ONMC’s members having demanded the compensation provided in the bill over Google’s objections.

Some wouldn’t speculate, but I will: whether Google’s strategy of making Canadian newsrooms crawl over broken glass to get their fair due from the Search monopolist is part of its plan to discourage legislators in California and US Congress.

As posted last week in MediaPolicy, the ONMC certainly came out firing after Google handed the CJC board the keys, demanding tight CRTC supervision of the cash distribution. Opinion columns appeared in the National Post and La Presse questioning the representativeness of the CJC.

On Wednesday, Unifor National President Lana Payne was quoted in a Toronto Star news story questioning the business relationships linking a number of CJC board members as a conflict of interest. Payne’s union represents several thousand journalists and media staff.

By Friday, the CJC had posted a “FAQ” in which it described the membership of its board as temporary and promised a permanent elected governance structure that will be inclusive of mainstream media outlets. It also promised to “work closely” with the CRTC “to ensure compliance with the funding formula prescribed in the Act and regulations.”

Tempest calmed, at least for now.

***

Last week MediaPolicy posted on the misery of Corus Entertainment and its Global News chain. Just to prove that June is the month from hell for the Canadian broadcaster, the company announced the retirement —“effective immediately”— of long time CEO Doug Murphy.

***

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Chart from the News Poverty Map, TMU

June 19, 2024

I have another post today on this week’s release of the annual Reuters Global Digital News Report. This time, it’s on the Canadian report.

My agenda: I am looking for insights on the prospects for a Canadian democracy populated by citizens that are reasonably well informed by reliable news journalism.

Here are some key observations in the Report:

1. We are still a nation of news followers.

This is definitely the good news!

The general population (73%) consume news on a daily basis. Another 20% are more casual, non-daily news consumers. An impressive 49% are avid news followers (checking news multiple times per day). Only 7% are dyed-in-the-wool news avoiders. Alas, you can see from the chart below that the numbers are slipping over time.

2. Our contentment with news journalism is fraying.

Of course, that could also be a good thing, from a contrarian point of view.

The standard “trust in news” question is whether a respondent believes available news sources are trustworthy, most of the time. The numbers slipped badly in the last 10 years around the world. In the last year, the Canadian number went down only a point (margin of error?). Canadian popular trust in news is close to the global median and considerably higher than obvious comparators, the US and France.

An insight in this Report is that our trust in our own choices of news journalism rides 10 points higher than our trust in the news that others consume. That could reflect fears of disinformation but also intolerance of different points of view in an expanding news universe.

The Report contains apparently contradictory data on rising news interest and rising news avoidance. As context for those numbers, news fatigue (feeling “worn out” by current affairs) is up over the last five years by a considerable margin. Possibly, the avid news followers are becoming more avid, casual news followers (and avoiders) are becoming more avoidant. Again, these are consistent with global trends. In-depth research might clarify.

3. No, I won’t pay for news.

The Canadian drill-down data is even more discouraging than the global numbers of news consumers demonstrating their interest in news by paying for it, meanwhile shoring up the declining monetization of journalism by reliable news organizations.

It’s not just that the Canadian figure for news payers is only 15% of the population. It’s the breakdown of that number.

Fully half of “payors” for online news don’t shell out for a regular news subscription.

And these numbers above don’t even take into account heavy discounting of regular subscriptions (For example, I pay $50 for a full year of the Toronto Star and another $50 for the Washington Post. I pay the full shot for the Globe and Mail).

To be even more morose, the non-payor expectations of an affordable monthly news subscription is highly price elastic. In other words, we’re cheap:

4. Television news, a major host of reliable journalism, is still king and queen.

After viewing all of the short and long term data about the public appetite for news subscriptions, it’s clear that the answer to “what is to be done?” must focus on free, bundled, tax deductible, government subsidized, donor supported, billionaire-patronized, and/or public broadcasting journalism.

The popular bundled product —news provided as part of a multi-interest media source– is still television. There are after all nine million cable TV households among 15 million Canadian homes. You can say that nine million is declining (it is), that it’s reaching a tipping point with online news (it is), and that it’s generational (it is), but the enormous cohort of television-first Canadians has a lot of years left, or so I would like to think.

5. Social media gateways to news and the Meta blackout

For this post, let’s take a pass on the argument over the Online News Act and the backfire effect of the Meta news blackout. My own views are here.

The decline of Facebook as a news source, or as a gateway to journalism websites, is a global and long-term trend. That’s by deliberate design and consumer behaviour (especially youth), as we know.

YouTube is taking up the slack, as the Report notes. Instagram is up too. The Facebook numbers in Canada went down dramatically (surely accelerated by the blackout) but as the Report notes: “It is important to note that [consumer] workarounds exist (such as modified hyperlinks and screenshots) and that some accounts of individual journalists or accounts with specialized content (sports channel publications, cultural magazines, etc.) are still accessible on Instagram or Facebook.”

As for the impact on news organizations relying upon Facebook as a distributor, it wasn’t the task of this Report to quantify the impact of the blackout. There are many plausible claims made about closures, decline of start-ups, or loss of traffic. But there is no systematic survey (and sadly given the confidentiality of the figures, probably never will be).

Here’s the full report:

***

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June 17 2024

Every year around this time the folks behind the Reuters Institute Digital News Report publish their report on the state of news journalism in 47 countries around the world and in so doing, remind us of the indispensability of expert observations. 

Unfortunately their observations are usually bad news or at least deeply worrisome. This year there are four big ones:

The public’s news exhaustion and avoidance continues to rise.

News consumers increasingly seek out news through digital “gateways,” meaning online platforms that aggregate news links without paying compensation. Meanwhile, news consumers decreasingly seek out news organizations’ websites and apps directly. That’s bad for the financial viability of news publishers and broadcasters. 

News providers are increasingly less likely to be journalists or newsrooms. There is a very significant growth of non-professional “influencers,” especially reaching the younger generation. 

News subscriptions remain stubbornly low —and appear to be levelling off— at the rate (in Canada) of 15% of the public.

And we haven’t even got to anxiety-inducing AI and its potential impact on reporting facts.

On the other hand, there is some less than awful news. The trust-in-journalism meter may be levelling off (or slowing considerably) after several years of nihilistic vilification of professional journalism.

The Report does a great job analyzing all of these trends: you can access the global report here and the Canadian segment here:

Once you start reading the reports you’ll find a collection of gems.

The global report tracks the wide discrepancies between nations on issues of trust in news organizations, rate of news subscriptions, consumer preference for news websites instead of gateways, and so on. You can only walk away from reading the report acknowledging that the most powerful influences on the financial health of any nation’s news journalism have nothing to do with the quality of journalism.

Like, is the language of news English or not (as US online sources and the freely available BBC News are in English)?

How much news content is available free from public broadcasters?

What is the ingrained political culture as it affects the willingness (or not) of the governments to support media through subsidies or regulation?

How politically polarized (or not) is the population?

On the other hand, some of the Report’s analysis provides some optimism that news organizations can do things right, or better, to shape their own destinies.

For example, the Report polled on public trust in news organizations. The results are intriguing: 

Thankfully the public puts a premium on transparency, lack of perceived bias and high journalistic standards. But as you can see, the public also puts a premium on “representing people like me fairly” and having “similar values to me.”

You see the contradiction and the corresponding challenge to journalism.

Nevertheless another of the Report’s measurement of reader satisfaction gives news organizations something they can use:

The Report even identifies the opportunity for improved reader satisfaction, measured by the difference between the importance of the consumer need and performance of the newsroom:

There is no shortage of these insights and perhaps later this week I’ll post about more of them.

***

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Friends of Canadian Media graphic

June 15, 2024

Yesterday MediaPolicy claimed the distinction of being the last member of the broadcasting commentariat to weigh in the CRTC’s first big decision on implementing the Online Streaming Act, Bill C-11.

“Golly, it’s a Netflix tax” is a lengthy 7 minute read, but I haven’t seen anyone else make some of my points, so perhaps you will find it helpful.

One of the issues I didn’t address in the post, out of a concern for brevity, was my obsession with the fate of local television news in this most recent Commission ruling.

Let me bore you for a moment.

Once upon a time (2006-09) the CRTC under its chair Konrad von Finckenstein devoted a lot of energy to finding a stable subsidy solution for local TV news. The fragmentation of the advertising market was well underway, and the future of ad-supported local stations was not bright. That may sound familiar.

The Commission tried a two-pronged strategy. But the plan floundered on both counts when the Supreme Court ruled that the CRTC was without jurisdiction to order cable companies to directly compensate local broadcasters for grabbing signals off of their radio towers. Then in 2012 a new CRTC chair who hailed from the cable industry cancelled the Commission’s alternate plan (an annual $100 million tithing of cable companies to make payments to a local programming fund that all Canadian local stations could access). 

Along came yet another CRTC Chair, Jean Pierre Blais, who in 2017 set up a smaller news fund at $21 million that was (and is) restricted to about a dozen independently owned local television stations in small and mid sized local markets (some of whom have content deals with major networks such as CTV, City-TV and TVA). 

Since then, the CRTC’s Independent Local News Fund (ILNF) has seen its cash pool shrink every year because the funding formula is tied to 0.3% of in-decline cable TV revenues. As of a year ago, it was down to $18 million annually and suddenly found itself beseeched by another 15 applicants from Global News stations. That new problem was created by the Shaw family cutting its news network loose in the 2022 Rogers-Shaw merger which automatically deprived Global of $13 million annually in special news funding from Shaw Cable, now owned by Rogers. 

The CRTC dithered about this for the last two years, promising to do something about a situation in which Global lost 10% of its journalism budget, the pool of televisions stations eligible for the shrinking ILNF doubled, and Rogers enjoys a windfall of $13 million to spend on its City-TV network. 

The solution? Foreign video streamers are going to join Canadian cable companies (of which Rogers is by far the biggest) in funding the ILNF with a contribution that looks to be about $45 million of the $150 million that video streamers are going to be paying now to Canadian media funds.

That’s a heck of a cash injection for local news. 

Is there joy in Mudville? Maybe, maybe not.

What was, for a moment, good news for Global stations was tempered by the bad news for its parent company, Corus Entertainment. That’s because Rogers Sports & Media just outbid Corus for a big chunk of its American programming and content branding from Warner Brothers Discovery. 

Bay Street analysts were grim in their dire projections for Corus. Media blogger Fagstein described it as Rogers “kneecapping” Corus and “stealing their content.” Somewhere, Brad Shaw was clipping his coupons.

Then days later the Corus-owned Global laid off 35 television employees, mostly in Alberta and Toronto. 

***

There is a very weird thing unfolding in the implementation of the Online News Act, Bill C-18.

In December, Heritage Minister Pascale St.-Onge made peace with Google in a deal that committed the Big Tech giant to funding Canadian journalism to the tune of $100 million per year. 

Part of that deal was to put Google in the driver’s seat on distributing the cash, giving the company the power to choose an umbrella bargaining agent for hundreds of Canadian news organizations. The government’s main condition was that the Google cash had to be allocated equally on a headcount of employed journalists in all eligible news organizations. 

At the time, it wasn’t hard to predict that news organizations might try to game the distribution with inflated headcounts. 

Two journalism consortiums offered themselves up to Google as a bargaining representative.

The first was the Online News Media Collective, a coalition of the Canadian Association of Broadcasters, the CBC, the print-based News Media Canada, and a number of smaller news organizations (some of whom also belong to News Media Canada). That’s an alliance representing 99% of Canadian journalists and journalism content.

The other bidder to distribute Google’s cash might be called the Indiegraf-Village Media consortium, but it’s going by the name of the Canadian Journalism Collective. Its board is chaired by Erin Millar, the publisher of The Discourse and lead player in the start-up platform Indiegraf. Several of the CJ Collective’s board members use Indiegraf, a news platform and publishing system that got some of its seed capital from Google (give them credit, a good deed). 

The other main CJ Collective player and board member is Jeff Elgie of Village Media, the most successful digital news chain in the country and an opponent of Bill C-18. The CJ Collective has its admirers, including Michael Geist.

It was a mild shock when Google picked the indie CJ Collective over the mainstream Online News Media Collective, given the 1% versus 99% numbers. The Google press release didn’t give away a lot when explaining why. It certainly looked from afar like there could be some politics involved. 

Both umbrella groups are stuck in an unavoidable conflict of interest where, in theory, they become a gatekeeper of distributing funds (which are supposed to be equally allocated) of which their own member news organizations stand to benefit. 

In addition, it turns out that many of the participants in the indie Collective were approached by Google back in 2022 and offered funding to lobby against Bill C-18 (they considered and then rejected it). Google did the same thing in fighting Bill C-11: YouTube funded the upstart lobby group Digital First Canada, landing its unwitting spokesperson in hot water over the issue of lobby registration.

All of this is so much mudwrestling and of limited policy significance, except that everyone involved is brimming with suspicion that the other guy is going to cheat and game the distribution of Google cash with some creative representations of “employed journalist.”

This ought not to be a real threat to the integrity of the payment scheme if the CRTC makes it known that it will supervise and even audit the distribution of Google cash. At least hypothetically, it’s possible that some news organizations are going to shoehorn non-payroll editorial expenses or others might misrepresent freelance stringers and the occasional columnist as “employees.” Geist points out some other things that could go awry.

That’s probably why News Media Canada and some of the other members of the Online News Media Collective issued a press release calling on the CRTC to get involved.

There’s also some blogosphere speculation about whether the unsuccessful mainstream media alliance is expressing sour grapes because it overbid on the administrative expenses it would have charged for negotiating the Google cash distribution.

I have a feeling the mudwrestling isn’t over. 

***

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