Government programs aimed at bailing out journalism outlets are set to expire next month. This led some reporters to fear another wave of layoffs.
When I was covering the Bill C-18 senate hearings, one of the themes pushed by lobbyists is that newspapers are innovative – that the major news sector is constantly delivering world class journalism reporting and that Canadians are fully invested in the news they put out there. Then, in the very next breath, those same lobbyists turn around and saying how they are losing money like crazy and that the audience is leaving them in droves. As a result, they need lots of money yesterday to keep their beloved businesses afloat.
Those themes are among the many contradicting messages that lobbyists advanced throughout the process. It never made sense before and it doesn’t make sense today. Either those businesses are producing the high quality content everyone wants and are innovative, or they are losing money hand over fist and are seeking bailout money to keep their businesses afloat. It’s either one or the other because it certainly isn’t both.
Truth be told, I lean towards the latter. The larger news businesses simply rested on their laurels, assuming that their once massive media empires would continue to be massive media empires forever. This as the audience started leaving them when major technological shifts began to happen. Caught flatfooted, they started launching massive campaigns against things like social media, saying anything and everything to dissuade their remaining audience from leaving them. When that didn’t work (and continues to not work), they started asking for handouts because the last thing they want to do is change their business models to better reflect modern times.
As part of the effort to pass the horribly thought out Online News Act, the Canadian government naively believed that for the large news operations, they just need a cash infusion to “save” journalism positions. They simply bought the talking points hook, line, and sinker. They really believed that for the larger players, money was the problem – much to the delight of the large media companies who realized that the government was actually buying into their lies.
Yet, money continues to not be a problem. Last year, we reported on PostMedia issuing a massive wave of layoffs after getting huge financial bailouts. Later that year, after being a huge beneficiary of the money coming from the Google fund model (which killed the link tax concept in Canada), the CBC promptly slashed 10% of its workforce. Earlier this month, Bell followed suit by happily taking the Google money, hoarding the bailout money, and slashing 9% of its workforce, shutting down nearly half of their radio stations and cancelling multiple major news TV broadcasting programs in the process. The moves made it very clear that the largest players were always going to layoff those employees, bailout money or no bailout money. When the government realized they were completely hoodwinked, they angrily accused Bell of not holding up their end of the bargain in all of this.
The real problem in all of this is garbage business decisions by those running many of these operations. Some of it has to do with “well, if it worked 30 years ago, then it should work today!”. Sometimes, it’s just a business not understanding the market they are trying to target. Other times, it might actually be just economics beyond the businesses control, tapping into a market that simply can’t sustain such an operation. Regardless, numerous outlets have decided to rely heavily on government subsidies and bailouts to keep their businesses afloat as opposed to find innovative ways to sustain their business models.
So, you can imagine how much I raised an eyebrow when I saw this report that seems to be using the same old playbook of how small independent media are on the verge of laying off people unless the government continues bailing out the sector with programs that… often largely benefit the biggest players the most:
A federal program that funds hundreds of local journalists and underserved regions across the country is set to expire at the end of March, and the independent newsrooms that rely on it have no news about whether it will be renewed.
But LJI funding is scheduled to end on March 31, and there are no answers on whether it will be renewed.
“In total, there are over 400 LJI reporters across Canada at nearly 300 media outlets serving some 1,400 local communities,” said Paul Deegan, president and CEO of News Media Canada, which is one of six groups that administer LJI funding.
“Frankly, there are no other current federal funding initiatives that can replace it. It is a world-class program that other countries are looking at.”
The federal government isn’t ready to tip its hand about the program’s future.
“We cannot today announce anything,” a spokesperson for the federal heritage ministry told CBC in a statement Wednesday.
“We will continue to support local journalism in substantial ways that tells our stories and informs our communities.”
The report is bizarre for a number of reasons. It seems to pretend that it’s even a question of whether or not the government is going to bail out the news sector. This despite the fact that we know from last November that the Canadian government is already bailing out the news sector. So, it isn’t even a question of whether or not the government is going to offer handouts to media companies because it’s already happening.
For another thing, the only outcome that would be a surprise in all of this is the government announces that they aren’t going to continue this program and nothing will replace it afterwards. The government is already and will continue to bailout the news sector because many of the players out there can’t be bothered to actively attract audiences to sustain their businesses in the first place.
The punchline in this report is that News Media Canada is pretending to actually give a blank about the smaller players when they are almost exclusively focused on representing the interests of the biggest players. The lobbyist organization saying that they are trying to advocate for the interests of the smallest players is just an automatic red flag for me.
Still, the obvious problem in all of this is the fact that numerous players are continuing to be reliant on government handouts to keep their operations afloat. Free handouts from the government are a band-aid solution to a problem that needs long term fixing. Those long term fixes include reformatting the business models so that they can be sustainable in a modern time. Whether that is publishing content people are actually interested in reading, coming up with a new structure online, something else, or a combination of solutions, the media companies need to figure out how to get off of these bailouts, not on them.
There’s multiple reasons why the media companies need to get off of government handouts. For one, it damages the credibility of the news sector. Are you really going to criticize a government that you are wholly dependant on to write your paychecks? Not really. Additionally, if an election happened and a new government comes in, there is that risk that the new government would decide that the bailouts are a stupid colossal waste of money and axe them, causing the businesses to go under pretty much overnight. That should never be a risk. Additionally, less bailout money to the sector could translate to that money being spent on things like a better healthcare system, assisting in a green transition, tackling drinking water problems and internet connectivity problems in rural and indigenous communities, and other problems that really need to be tackled.
After all, we now have the image of the media sector effectively being a crack addict hooked on government handouts. What we need is a media sector that isn’t addicted to these handouts and, instead, able to stand on its own two feet. Media companies hitting up the government for another hit is taking things in entirely the wrong direction.
Drew Wilson on Twitter: @icecube85 and Facebook.
I think that heavily taxing tech corporations and putting all of that money into a well-regulated and audited endowment/trust organization, which then uses that money to fund journalism and jorunalistic pursuits, would be good. There are countries in Europe that have that and have been doing well with that.
It’s better than acting like the Free Market and Innovation will solve everything.