Sunday, October 15, 2017

Newspaper bailout rightly rejected, but for wrong reasons

An edited version of the following was published on the website of Policy Options.

Edward Greenspon isn’t giving up on a bailout for Canadian newspapers. “It is a good thing more thinking time has been allowed around the policy framework,” he wrote in response to Ottawa’s recent rejection of a proposal for giving $275 million in annual assistance to the country’s troubled dailies. (Unfinished business for Canadian journalism, Policy Options, Oct. 2) Greenspon somehow sees in background documents filed with the policy pronouncement a door left open just a crack for the ailing newspaper business. That means more work for his think tank, the Public Policy Forum, which has been pushing a bailout since Hedy Fry’s committee on Media and Local Communities released its report calling for government action in June. 

Greenspon laid the groundwork for a bailout in the PPF’s report The Shattered Mirror, which was released in February late January and paid for mostly by the Heritage Ministry, with a half dozen major corporations also contributing. It so exaggerated the plight of newspapers, however, that it brought howls of derision from Canadian media economists, myself included. He quickly switched hats and began officially working on a bailout in conjunction with News Media Canada, an industry group formed by the recent merger of the Canadian Newspaper Association and the Canadian Community Newspaper Association. Community newspapers already get assistance, as do magazines, from the Canadian Periodical Fund, which doles out $75 million annually. 

Greenspon’s proposal was simple, but expensive – extend CPF assistance to dailies and boost the fund by $275 million a year. That fell flat with the federal government, no doubt due in part to the fact that Postmedia Network, by far the country’s largest newspaper chain, is 98 percent owned by U.S. hedge funds. They are bleeding it dry by siphoning off most of Postmedia’s annual earnings as payments on the company’s massive debt, the majority of which the hedge funds also hold. This arrangement was allowed to stand by the Harper government despite a supposed limit of 25 percent on foreign ownership in this culturally sensitive industry. It then looked the other way in 2014 as Postmedia took over Sun Media, the country’s second-largest chain, which gave it 21 of the 25 largest Canadian dailies, including eight of the nine largest in the three westernmost provinces. Soon after that deal got Competition Bureau approval, and despite promises not to, Postmedia merged the newsrooms of duplicate dailies it thus owned in Vancouver, Calgary, Edmonton, and Ottawa. It shamelessly pushed the Conservatives for re-election in 2015, ordering its editors to endorse Harper and running full-page, front page ads warning that voting Liberal or NDP would “cost” Canadians. It even spiked an election day column by the National Post’s Andrew Coyne because it endorsed a party other than the Conservatives. Then it turns around and sticks its hand out to the newly-elected Liberal government, asking for a bailout? Puh-lease.

Heritage Minister Melanie Joly made the right decision but for the wrong reason in her nixing of assistance for Canada’s dailies. “Our approach will not be to bail out industry models that are no longer viable,” she said in setting out her vision for the government’s relationship with Canadian media. “Rather, we will focus our efforts on supporting innovation, experimentation and transition to digital.” Ironically, and contrary to widespread misconception, newspapers remain viable, as I chronicled in my 2014 book Greatly Exaggerated: The Myth of the Death of Newspapers (Vancouver: New Star Books). Despite an historic downturn in advertising revenues as a result of the Great Recession and a sharp pivot to cheaper digital advertising, no publicly-traded newspaper company in the U.S. or Canada (ie. the ones for which earnings reports are available) lost money on an operating basis between 2006 and 2013. Postmedia made $82 million in its most recent fiscal year, but $72 million of that went on debt payments to the hedge funds. The result has been massive cuts to news coverage, which fledgling digital media have been unable to make up for because few, notably subscription-based outlets such as allnovascotia.com, have figured out how to make money online. 

Greenspon, whose Shattered Mirror report was largely silent on the sticking points of ownership concentration and foreign ownership, protests that denying daily newspapers a spot at the media trough is wrong. “Excluding the major originators of the country’s news, including local news, from a scheme based on original editorial content would make no sense.” He has a new idea, however, which smacks of a Hail Mary pass on behalf of Canada’s dailies whose bailout ambitions he is quarterbacking. But it’s not that crazy an idea. If the government is queasy about bailing out foreign hedge funds, he writes, “there would be less static if, as part of a future support package, these enterprises agreed to become (officially) nonprofits.” The notion of converting legacy media to non-profit status has been bruited by some, such as French economist Julia Cagé, in order to free them from the money-making imperative that has run them into the ground. “In the case of newspaper chains,” writes Greenspon, “each individual newspaper could be sold to owners based in the local communities.” 

Now we’re talking. Instead of cutting back on journalism to feed their owning vulture funds, the country’s largest dailies would be legally obligated to reinvest any profits in reporting. The advantage to the government would be that the money to pay the vultures to flock off would come not from the public purse but instead from new, hopefully more civic-minded local owners. The only remaining matter would seem to be price. How much would it cost us to pay off the hedge funds and be rid of their malign neglect? The devil, as always, will be in the details.

Friday, September 1, 2017

The “Netflix Tax” and other brilliant cableco propaganda

The following was published in the September/October issue of the Canadian Centre for Policy Alternatives magazine The Monitor and reprinted in The Tyee.

No sooner had Liberal MP Hedy Fry’s parliamentary heritage committee handed down its report on Canada’s news media crisis in June (after 16 months of hearings in Ottawa) than the newspaper industry bellied up to the trough and put in for a bailout worth $275 million a year. The timing was poor, as it appeared the other shoe had dropped a bit too quickly.
When it comes to money grabs, however, the press proved bumbling amateurs compared with Canada’s electronic media.
Titled Disruption: Change and Churning in Canada’s Media Landscape, the Fry report made many sensible recommendations. Some are long overdue, like changes to our charitable giving laws that would allow tax-deductible donations to fund journalism, as they can in the U.S. and elsewhere. Other recommendations repeat pleas made by previous inquiries, such as for a diversity test to prevent market dominance by any media owner, and changes to the Competition Act that would treat news media takeovers differently than those in other industries. The same measures were suggested in 2006 by a Senate committee on news media, but they were ignored by a newly installed Harper government that looked the other way for a decade as the country’s media instead consolidated into unprecedented power centres.
Internet Service Provision (ISP) profit margins, 2012-15
Our largest newspaper chain (Postmedia) was taken over on Harper’s watch by U.S. hedge funds, which now own 98% of the company—despite a supposed 25% limit on foreign ownership in this culturally sensitive industry. Postmedia in turn took over Sun Media, our second-largest newspaper chain, giving it 15 of the country’s 21 largest dailies, including eight of the nine largest in Western Canada.
CEO Paul Godfrey promised to preserve competition in cities where Postmedia thus owned both dailies and the Competition Bureau signed off on the deal in 2015. The double-cross came last year, when Postmedia merged the newsrooms of its duplicate dailies in Vancouver, Edmonton, Calgary and Ottawa, prompting Fry’s inquiry. (See “Can Canada’s Media Be Fixed?” in the July-August 2016 Monitor.)
The Fry report left vague any process for subsidizing news media in its first of 20 recommendations, urging only that the heritage minister “explore the existing structures to create a new funding model that is platform agnostic and would support Canadian journalistic content.” Within hours, however, the newspaper industry weighed in with a detailed—and self-serving—proposal that was hardly agnostic with respect to platforms.
The industry suggested the Canadian Periodical Fund, which currently subsidizes magazines and non-daily newspapers to the tune of $75 million a year, offered a suitable model. News Media Canada, an industry group created by a recent merger between Newspapers Canada and the Canadian Community Newspaper Association, proposed extending the CPF to daily newspapers. It asked the government to simply underwrite 35% of their editorial expenses, but to not give such assistance to regulated broadcasters, who already benefit from the CRTC’s largesse, or to digital media like upstart blogs.
“No one wants to fund personal rants or political agendas,” argued Bob Cox, publisher of the independent Winnipeg Free Press, who heads News Media Canada (despite Postmedia’s dominance of the industry). Connecting the dots in all of this, we find some unsettling connections.
A draft of News Media Canada’s proposal that was circulated to groups for endorsement came on letterhead of the Public Policy Forum, but the final version made no mention of involvement by the think-tank. Headed by former Globe and Mail editor Edward Greenspon, the PPF was paid $200,000 by the Heritage ministry in 2016 to research Canada’s media malaise.

Greenspon’s report The Shattered Mirror, handed down early this year, took up with vigour the newspaper industry’s escalating beef against Facebook and Google, which circulate news online and dominate the digital ad market. But it so exaggerated the plight of newspapers and the threat of the foreign internet giants that Carleton University media economist Dwayne Winseck accused Greenspon and his scholarly research team of “goosing the numbers” to make their overstated case. The PPF’s media projects may have been separate and unconnected, but the optics are nonetheless poor.
The Harper decade also saw the consolidation of even more worrying power centres in Canada’s electronic media. The Fry report’s most contentious suggestion was for where the money to fund flagging Canadian journalism should come from, and the country’s media seemingly circled the wagons on this one.
The report proposed a levy on internet service providers (ISPs), which was immediately framed as a “Netflix tax” by some journalists. Reporters who had received leaked copies of the Fry report grilled Prime Minister Justin Trudeau on the proposal almost before the ink was dry. He disowned any such idea, saying “we’re not raising taxes on the middle class.”
What the report really suggested, however, was extending to internet service provision the 5% levy that cablecos already pay on their television revenues to fund Canadian broadcast content. It makes sense, after all, that those who are cashing in fastest on the digital revolution should help fix the mess the internet has made of media.
The CRTC’s latest Communications Monitoring Report shows the cabelcos make profit margins on their unregulated ISP rates in the range of 45%. So rich have they grown, first through lucrative cable TV monopolies, then with broadband internet access, that they have all bought TV networks. (CTV is owned by Bell, Global by Shaw, and CITY by Rogers.) That gives the vertically integrated content/carrier TV giants tremendous power over national perceptions.
If they say Fry is angling for a new tax on Netflix-watching Canadians, who will believe her report in fact urged a levy to claw back excess profits from the corpulent cabelcos?
Marc Edge teaches media and communication at University Canada West and the University of Malta. His latest book is The News We Deserve: The Transformation of Canada’s Media. (Vancouver: New Star Books, 2016).

Saturday, March 18, 2017

This is fake news about the news. Sad!


Dear Editor & Publisher,

Your article “The Canadian Newspaper Industry is Getting a New Jolt of Life” (March 6) was well written by H.G. Watson, but its presentation on your pages was misleading in several ways, starting with the headline. After reciting the litany of woes that have beset the industry over the past decade or so, Ms. Watson mentioned a few digital initiatives that are attempting to help fill the growing news gap in Canada. These hardly qualify as the “jolt of life” somehow seen by your headline writer. The accompanying graphic was even more misleading, claiming that 171 local news outlets have closed in Canada since 2008. This does not jibe with data gathered scrupulously by Newspapers Canada, which actually show an increase over the past five years. It does, however, fit in well with the rampant myth-making I found in researching my 2014 book Greatly Exaggerated: The Myth of the Death of Newspapers. (PDF | reviews)

As mentioned in your article, the Canadian newspaper industry  suffered less severely during the Great Recession than in the U.S. That was because the economy north of the border did not decline as steeply due to more sensible banking regulations. Only one daily was closed, but it was immediately reincarnated as a local version of the free commuter tabloid Metro. By my count, eight daily newspapers have been closed in Canada since 2010 (seven others have moved to non-daily publication), but the vast majority of the closures have occurred under questionable circumstances that warrant federal investigation. The largest newspaper closed was the Guelph Mercury, which ranked about 50th in circulation among Canada’s then 90-odd paid dailies. The others were among Canada’s smallest. Six were closed and three were rendered non-dailies by two chains in the far western province of British Columbia that have been buying, selling, and even trading newspapers back and forth since 2010, then often closing them to eliminate competition. By my count, Black Press and Glacier Media have closed 19 of the newspapers they have exchanged, including non-dailies. More than half of the 15 newspapers the chains traded in one 2014 deal were subsequently shuttered, creating numerous local monopolies. The federal Competition Bureau seems not to have noticed. The chains have claimed that some of the closed titles were unprofitable, but financial statements filed by Glacier Media, which is publicly traded, show that it recorded a profit margin for the first nine months of 2016 in excess of 30 percent. Black Press is privately owned and is thus not required to disclose its finances, but it is partly owned by publicly-traded Torstar Corp., whose annual reports show that between 2011 and 2015 Black Press recorded earnings ranging from $15 million to $28 million, peaking in 2013. As for non-daily newspapers, according to Newspapers Canada data, there were 1,060 in Canada last year, or 18 more than in 2011.

As I show in Greatly Exaggerated, no publicly-traded newspaper company in North America suffered an annual loss on an operating basis between 2006 and 2013, a period which included the greatest-ever decline in newspaper advertising revenues, a stupefying drop of about half in the U.S. and a quarter in Canada. Most newspaper companies emerged from the recession making double-digit profit margins. Some barely dipped below 20 percent return on revenue. Even the dozen or so chains that declared bankruptcy during this period were profitable, some enviably so. Their problem was the enormous debt they had taken on in making acquisitions, which could not be serviced with their reduced revenues. Their newspapers were profitable. The debt-laden chains were not.

Hayley Watson poignantly asks in her article “What the hell happened to the Canadian newspaper industry?” The answer is simple – unhindered corporate financial engineering and inexcusable federal regulatory failure. My 2016 book The News We Deserve: The Transformation of Canada’s Media Landscape (PDF | reviews), chronicles how Canada’s largest newspaper company, Canwest Publications, was taken over following its 2009 bankruptcy by U.S. hedge funds despite a supposed limit on foreign ownership of 25 percent. The hedge funds bought up a large portion of Canwest’s massive debt at pennies on the dollar, then used part of it in making a so-called “credit bid” that won the company at auction. The real stroke of financial engineering genius came when the hedge funds kept the rest of this high-interest debt on the company’s books, meaning that the renamed Postmedia Network had to pay them first every month. As a result, of the $82 million in operating earnings Postmedia recorded in its most recent fiscal year (on revenues of $877 million, for a profit margin of 9.3 percent), it was forced to make $72 million in payments on debt bizarrely held mostly by its foreign owners. The result has been non-stop cost cutting to service this debt as Postmedia revenues fall.

But wait, it gets worse. The hedge funds doubled down in 2014, buying 175 of the 178 dailies owned by Canada’s second-largest newspaper chain, Sun Media. That gave it both dailies in three more cities – Ottawa, Calgary and Edmonton – in addition to Vancouver, where it already owned both. It promised it wouldn’t merge the newsrooms in those cities and the acquisition was approved by the Competition Bureau. By my count, that gave Postmedia 37.6 percent of paid daily circulation nationwide, and 75.4 percent in the three westernmost provinces, where it owns eight of the nine largest dailies. Despite its promises, in early 2016 Postmedia merged the newsrooms of its dual dailies in Ottawa, Edmonton, Calgary, and even Vancouver, where its corporate progenitor promised the Competition Bureau’s predecessor more than a half century ago that would never happen.

That’s when I decided to try and do something about this instead of simply researching and writing about it, as I have for the past 20 years. I presented some of the above facts to Dr. Hedy Fry, who is the longest-serving Member of Parliament in the federal Liberal government that was elected in late 2015 following almost a decade of Conservative rule. Hearings were convened in Ottawa by a Heritage ministry committee on Media and Local Communities several weeks later and have been ongoing for more than a year. A report by a think tank was commissioned, but it ignored the problems of ownership concentration and foreign ownership, instead laying most of the blame for Canada's local news disaster on the U.S. online giants Facebook and Google, which it suggested taxing to subsidize shrinking news outlets. It similarly promoted the newspaper death myth and was accused of "goosing the numbers" in doing so. The committee's recommendations to alleviate the ever-worsening journalism crisis in Canada are expected by spring.

A real jolt of life is badly needed for Canada’s decimated news media. It will hopefully come soon. In the meantime, can we please stick to the facts about what is undeniably a crisis and paint a picture that better conforms to reality?

Marc Edge, Ph.D.
Associate Professor
Department of Media and Communication
University of Malta

Friday, February 10, 2017

The Shattered Mirror just broke into a million pieces

Criticism is piling up of the Public Policy Forum’s controversial new report, The Shattered Mirror. The first round was of the knee jerk variety, which is what the daily press specializes in. A second round of analysis is now under way by academics, who are by nature more contemplative and less reactive. I was a bit hard on the report, which was authored by former Globe and Mail editor Edward Greenspon, in an entry posted earlier this week on my old blog, Greatly Exaggerated, calling it “more like a funhouse mirror.” My 2014 book Greatly Exaggerated: The Myth of the Death of Newspapers produced reams of data to show that newspapers in Canada and the U.S. were still making healthy profit margins. (They still are.) The Shattered Mirror nonetheless goes to great lengths to perpetuate the myth that newspapers are “bleeding red ink.” (As do others.)

My new book, The News We Deserve: The Transformation of Canada’s Media Landscape, to which this blog is dedicated, looks at exactly what has brought our news media to near banana republic status. I mainly blame our absurdly high levels of media ownership concentration, which the federal Competition Bureau has failed to halt or even challenge, and majority ownership of Canada’s largest newspaper company by U.S. hedge funds in contravention of our foreign ownership limits, which the erstwhile Harper government chose not to enforce. The Greenspon report dismisses concentration as a problem, fails to even mention foreign ownership, and gives the Competition Bureau a pass.

Now Carleton University media economist Dwayne Winseck has weighed in with a scathing but lengthy analysis on his blog Mediamorphis, calling the report “badly flawed” because it “cherry-picks evidence and gooses the numbers” to make its case. This, of course, is what think tanks like the Fraser Institute do – start with predetermined policy conclusions and muster enough evidence to support them while ignoring evidence that doesn’t. Chief among The Shattered Mirror’s crimes, according to Winseck, is exaggerating the online bogeyman.
There is . . . an acute sense of threat inflation that hangs about it. The extent to which Google, Facebook, Silicon Valley and “the Internet” are made the villains of the piece is both symptomatic of how the report tries to harness such threats to preordained policy ends and a framing that undermines the report’s credibility.
Not only does The Shattered Mirror dodge the issue of media ownership concentration, notes Winseck, it also overlooks the impact of the 2008-09 financial crisis, which brought a sharp drop in advertising from which our news media have yet to recover “and likely won’t.” Besides, he adds, “advertising is no longer the centre of the media economy, and [is] receding ever further from that role by the day, so hinging a policy rescue on recovering so-called lost advertising is out of step with reality and likely to fail.”
As the bottom on advertising revenue falls out that source of subsidy will have to be replaced by another if we really are concerned about getting the news we deserve – trying to wrestle money out of Google and Facebook (the report’s central policy proposal) won’t cut it.
Winseck, who closely tracks media industries through his Canadian Media Concentration Research Project, is critical of the PPF report’s focus on the “fake news” fad and finds it generally alarmist. “The language about ‘vampire economics’ is overwrought,” writes Winseck. “Such things give a tinge of moral panic to the report, and taints the analysis and policy proposals.” Data presented in the report to paint old media as declining and even failing is highly misleading, according to Winseck. “Its fixation on advertising revenue, for instance, assumes that it has always been an integral part of the natural journalistic order of things. It has not.” A drop in conventional television revenues noted in the report is “misleading,” according to Winseck, in light of the lush profits being raked in by the broadcasting behemoths overall, such as Bell’s “eye-popping” 40 percent return on revenue.
Bell is the biggest, vertically-integrated TV operator in Canada by far, accounting for roughly 30% of all TV revenues and 28% of total revenue across the network media economy. Ignoring conditions at a company with this clout across the media economy is negligent, but also part of a tendency in this report to selectively invoke a small part of the picture to fill in a portrait of catastrophe of a larger kind. . . . The report is chock-a-block full of such examples, which lends to the impression that the report’s authors are goosing the numbers.
Likewise the report’s claims about collapsing newspaper circulation and journalism job losses. Its claim that between 12,000 and 14,000 journalism jobs have been lost since the 1990s relies on headlines and union data that “do a great job chronicling jobs lost but a poor one at keeping track of those gained.” Statistics Canada data “depicts a wholly different picture,” showing that the number of full-time journalists in Canada actually increased from 10,000 in 1987 to 11,631 in 2015. “Once again consistent with a pattern, the authors ignore this data completely.” My take on this is that there is no doubt mainstream media have suffered massive job losses due to cutbacks brought by plunging revenues, but digital media have proliferated, albeit with less well-paying and secure positions. And who knows how many of those new “journalists” actually pump out sponsored content a/k/a native advertising that is designed to look like news but is actually paid for by advertisers.

Circulation trends for daily newspapers, according to Winseck’s data going back to 1971, are similarly “not the catastrophe that The Shattered Mirror makes them out to be.” He has the same problem I have with the plummeting graph of newspaper sales per household (left), which the PPF report predicts will fall from 18 in 2015 to only two by 2025. “By this measure, the relentless decline and seemingly inevitable outcome look really, really bad – catastrophic even,” writes Winseck. But sales per household are increasingly less relevant as the number of households soars because people are increasingly choosing to live alone. Winseck performs an extensive analysis of historical newspaper circulation data to show that the Public Policy Forum has grossly exaggerated the decline of newspapers. The report, according to Winseck, “has selectively chosen a measure that paints the worst-case scenario.” This type of intellectual dishonesty might be common practice in the world of journalism from which Greenspon comes, but it won’t get past a scrupulous scholar like Winseck. My own research has found that newspapers have deliberately cut back on circulation in order to save on expenses because they actually lose money on every copy they sell.

Of course, they make it all back and more in advertising, which has undeniably been in freefall, declining 40 percent from 2008-15. “This is bad,” admits Winseck, but nowhere near as bad as portrayed in the PPF report. “Thus far, none of the measures reviewed leads to a ‘good news story’, but each of them in their own way change the magnitude, timing and potential causes of the problem.” Blaming the misfortunes of newspapers on the Internet as the report does is misguided, he claims. “There is no downward spike in the fortunes of the press on any of these measures that coincides with when the internet takes off.”
Given this, the internet – and Facebook and Google – cannot be the villain of the piece that The Shattered Mirror (and so many lobbying the government from the “creator” and “cultural policy” groups) makes it out to be. In fact, this is not news. While such claims are common, that they are wide of the mark is well known.
Media economists such as himself and Robert Picard have been pointing this out for years, notes Winseck, but the facts don’t seem to have seeped through to Ottawa. “That neither circulation nor revenue dives downward with the arrival of the internet cuts to the heart of the central claim in The Shattered Mirror. Yet, like so much of the evidence that does not fit its ‘sky-is-falling-because-foreign-internet-giants-ate-Canadian-news-media’s-lunch’ rhetoric, this evidence doesn’t make the cut. If all of this is correct, we must also change our diagnosis and policy proposals accordingly.”
Not only does newspaper revenue not spike downwards with the advent of the internet, the onset of economic woes for advertising supported media do not coincide with the time frames that the Public Policy Forum report identifies, typically 2005 or 2006 for newspapers and ‘recently’ for TV. The upshot of its misdiagnosis is to effectively carry on with the ill-fated case its authors want to make while avoiding another possible – and I believe far better — explanation for the woes they describe: the impact of the financial crisis in 2008 and economic instability that has followed ever since.
It was the recession, not the Internet, that diminished the newspaper industry and caused television to shift from advertising to a subscription model, stresses Winseck. “None of this is a mystery, except to those who work the policy apparatus here in Canada, and there is no mention of it in The Shattered Mirror.”  This fact has also been lost on “the myriad of groups vying to shape the outcomes” of the Heritage ministry’s ongoing review of the lush Cancon industry. “Beyond this cloistered community, however, the fact that the fate of advertising-based media turns tightly on the state of the economy – and indeed, is something of a canary in the coal shaft for it – is reasonably well known and discussed by media economists from across the political spectrum.”
In sum, it is a mistake to focus on a ‘silver bullet’ explanation of complex issues like the one before us. The fixation on the negative impact of the internet and the two villains of the piece, i.e. Google and Facebook, is misplaced. In short, advertising revenue has taken a nose dive because the economy has been shattered not because Tyrannosaurus Digital Media Rex Google and Facebook ate the news media’s lunch.
Winseck sees in Greenspon a “willful refusal” to deal with media industry structures in Canada, which are “wholly ignored” in the report. “These examples are not innocent,” he claims. “They are part of a process of ‘threat inflation’ with the aim of buttressing the case for the policy recommendations on offer.” While exaggerating some threats, the report downplays a major problem, according to Winseck. “The Shattered Mirror also gives short shrift to the idea that media concentration and the structure of the communication and media industries might be a significant factor giving rise to the woes besetting the news media.” By overplaying, as the report does, the threat posed by Google and Facebook “the effect is to minimize the extent to which media concentration and the uniquely high levels of vertical and diagonal integration between telecoms-internet service providers and other key areas of the media, especially television, have given rise to homegrown problems rather than the debilitating ‘vampire economics’ imported from afar.”
One must also look at trends over time, and in comparison to other parts of the world. The Shattered Mirror report does nothing of the sort, and so it paints a picture sloppily with a broad brush, declaring that media concentration is not a problem when it feels fit to do so, but a worrying concern where that suits its purposes, i.e. in the areas that Google and Facebook dominate. Ultimately, there is no overarching sense of how everything fits together, and so the image drawn is arbitrary, and wholly dependent on the whims of the observer.
According to Winseck, “it is folly to willingly turn a blind eye to high levels of media concentration and the peculiar structure of the media industries in Canada . . . because the costs of bulking up have had devastating impacts.” The PPF report “gives us a whiff of the costs in terms of journalistic and editorial jobs lost, but nowhere does it connect the dots. Of course, having ruled these issues “off-limits”, what should we expect?” That the PPF report “willingly walked away from these issues,” adds Winseck, “is stunning, and naïve.”
In doing so, it walks away from an impressive body of research from around the world that says that these issues are important, extraordinarily complex, and foundational to understanding the emerging digital media environment.
So how does everything fit together? Why would the PPF report paint such a misleading picture of Canada’s media industries? Why are some issues, such as media ownership concentration, “off-limits?” It might have something to do with those lush profits mentioned earlier. In addition to Bell’s whopping 40-percent profit margin, notes Winseck, fellow media giants Shaw (42 percent), Rogers (38 percent), and Quebecor (37 percent) are also raking in profits at about four times the rate in other Canadian industries. “These observations are at odds with the story of doom and gloom that permeates The Shattered Mirror.”

The answer might lie in what the late Canadian media economist Dallas Smythe and Tran Van Dinh of Temple University identified as “the ideological orientation of the researcher.” I have found in my research on Canadian media that the research and policy agenda has been steered by some academics with an ideological agenda, whose schools often then get a slice of the money that trades hands in media takeovers. “All of us have our predispositions,” noted Smythe and Van Dinh in 1983, “either to criticize and try to change the existing political-economic order, or to defend and strengthen it. The frequent pretense of scientific ‘neutrality’ on this score is a delusion.” Those who are prepared to defend Big Media get jobs and research funding. Others don’t. It’s that simple. Winseck knows this only too well, and in an attempt to convey that message he points to who was behind the report.
That the report refuses to engage with media concentration and the peculiar structure of the media is not surprising given that many of those surrounding its lead author, Edward Greenspon, in the development of this report have not just sat back and taken arm chair academic views on these matters but have been leading cheerleaders for the processes of consolidation in Canada that have got us to where we are.
Winseck declines to identify the cheerleaders, instead urging readers to do their own research. “The industrious reader need only consult the list of acknowledgements to sort out who is who and draw their own conclusions. Given all this, that media concentration wasn’t on the agenda is not surprising. It’s still a pity, though, because the issues are serious.” Perhaps his discretion is wise. After all, look at where my propensity to name names and point fingers has gotten me. I am currently teaching at the University of Malta, having for some reason been unable to secure an appointment at any journalism school in my Home on Native Land despite some absolutely stellar credentials. I guess that means I have less to lose than Professor Winseck, so being an industrious reader I’ll take it from here.

Let’s look at that list of Acknowledgements. Following a two-page Afterword in which Greenspon chronicles how journalism “allowed a shy kid to find his voice,” starting at the Lloydminster Times, he thanks the “hundreds of people” who provided input into his report. The four principal researchers were Chris Dornan, Winseck’s colleague at Carleton, Taylor Owen at the University of British Columbia, Colette Brin at Université Laval, and Elizabeth Dubois at the University of Ottawa. I recognized only half of those names. Dornan is a former director of Carleton’s journalism school and is now its graduate supervisor. He is a go-to guy when the news media need an academic to comment on how media ownership concentration is nothing to worry about. I took him to task in Greatly Exaggerated for downplaying Postmedia’s takeover of Sun Media in 2014. “Worrying that a smaller and smaller number of companies own a larger number of newspapers is kind of beside the point,” he told the Canadian Press, “because the newspapers themselves have been eclipsed in their social, political and economic prominence by the new digital concourses of communication.”

Brin was associated with the erstwhile Canadian Media Research Consortium, which I have savaged over the years for its work on behalf of media owners. Read about that here.  I did not recognize the name Taylor Owen, but then he just started as an assistant professor at UBC’s j-school, which I have vivisected for a decade and a half in protest of its corporate apologism. (Read the latest on that in The News We Deserve. This article is from 2004.) Owen is quoted throughout the report as an expert in online news. He has a website with his latest writings on things like Virtual Reality. (This is journalism?) Dubois is another assistant professor Internet expert fresh out of school, albeit Oxford. Her contribution to the report is unclear, as she is not quoted, but her research apparently revolves around “how technology may be leveraged to increase democratic accountability and engagement.”

Pollster Allan Gregg of Tragically Hip fame led the report’s polling efforts, aided by Natalie Turvey, who is executive director of the Canadian Journalism Foundation, and Chris Waddell, who is both a Carleton professor and a CJF board member. The CJF, as I noted in my 2007 book Asper Nation, was founded in 1990 by corporate executives who, according to the National Post, felt that Canadian business was “getting a raw deal from a wildly pinko media whose primary objective was to trash the corporate sector.” Its top executives wrote letters supporting Bell’s 2000 takeover of CTV, and it was present at the CMRC’s conception, although the Post’s conflict of interest revelations shamed it out of participating overtly in its parenting.

Some of those acknowledged in the report are journalists and journalism educators who do good work, but others stick out like a sore thumb, such as Jonathan Goodman, global managing partner of the multinational strategy consulting firm Monitor Deloitte, and Peter Donolo, vice chairman of PR firm Hill+Knowlton. The latter company is perhaps best known for faking the “babies ripped from incubators” story that helped turn U.S. public opinion in favor of invading Kuwait in 1990. Ken Goldstein, president of Winnipeg’s Communic@tions Management Inc., is listed as one of those having been “particularly patient in helping us understand industry numbers.” In a recent blog entry, I labeled Goldstein “Canada’s chief media apologist.” His prediction that newspapers have only a few years left was given prominence in The Shattered Mirror.

In addition to $200,000 in government funding, the PPF report received $70,000 in private funding. It came from the journalism-oriented McConnell, Atkinson, and Max Bell foundations, as well as from corporate donors CN, TD Bank, Ivanhoé Cambridge, and Clairvest Group. The 2016 PPF report Does Serious Journalism Have a Future in Canada?, by Madelaine Drohan of the Economist, on which The Shattered Mirror relied in part, was researched and/or written during a fellowship funded by the Royal Bank.

So there you have it – glass and blood all over the floor. Now that you have some more background to the report and where it came from, you can make up your own mind if Winseck is right about it.