This installment of my conversation with our local MPP, Mike Schreiner, deals with the current crisis that is happening in journalism. All politicians have a symbiotic relationship with the media. News sources get their messages out, so if we are going to have a vibrant democracy we also have to have competitive journalism in order to have an informed citizenry. With a lot of traditional institutions shedding reporters and even going under, it's important to try to understand what is happening and how the problem can be solved. As usual, it's clear that Schreiner has put some thought into things.
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| Mike strikes a concerned pose for radio listeners. From the GPO website. |
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Hulet: Do you have any ideas about the destruction of journalism? It's sometimes being replaced by out-and-out propaganda. I don't know if you saw the leaked memo from the Toronto Sun---.
Schreiner: I did. What surprised me was that they would allow me to write some Op Eds because I'd been highly critical of the Ford government.
Hulet: It's kinda frightening because Paul Godfrey controls something like 40 websites and newspapers in Ontario---just in Ontario with more in the rest of the country.
Schreiner: And there was that deal where Torstar and Post Media consolidated their local papers.&&&&
The event that Schreiner is referring was announced in the fall of 2017. Post Media (the company that owns the Toronto Sun and many other things besides) and Torstar (the company that owns the Toronto Star and many other news outlets) decided to divide up a lot of local markets in order to cut competition and increase revenue. They did this in November of 2017 by swapping back and forth 37 community newspapers and four free commuter papers in order to stop duplication of efforts (ie: competition) in specific communities. Once this "consolidation" had taken place, they then started shutting down the "extra" news outlets and laying off journalists. According to this National Observer story, Post Media shut down 21 businesses across the country, whereas Tor Star shut down the Barrie Examiner, Orillia Packet & Times and Northumberland Today---among others.
Of course, like any other issue, it's not quite so cut and dried as saying that all these newspapers are now "dead". As people in Guelph know, after the paper edition of a daily dies, there is often left behind a "ghost paper" on the Internet, such as TheMercuryTribune.com . Similarly, there is also the NorthumberlandNews.com, and, Simcoe.com. The important thing to remember, however, is that these website news sources are only a shadow of their former paper editions---which were often a ghost of what they had been before various waves of media consolidation and competition from emerging technologies. Every step of these transformations results in fewer journalists writing shorter stories about fewer events. News has been suffering a "death by a thousand cuts" for over 20 years and readers sometimes don't even notice when a paper finally goes under because of the "frog in the pot" syndrome.
According to the Canadian Encyclopedia, the number of daily newspapers peaked in 1911 at 143. Since then, there has been a steady erosion because of media consolidation and competition with other forms of media---first radio and "newsreels" at the cinema, then tv, and, later the Internet. Now it's a matter of different "legacy companies" fighting over the crumbs left by competition from the Internet.
Just to give the reader a context, consider the following graphic created by the Canadian Media Concentration Research Project (CMCRP). (Click on the image to get a bigger version---good luck with a cell phone!)
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| This is a graphic representation of 2017 revenues for all the different elements of the Canadian media market place. C/o the CMCRP website. Image used under the Fair Use Copyright Provision. |
For those of you who have a hard time understanding this graphic, here are a few key points. First, Post Media controls 30% of the print media (including both newspapers and magazines), Tor Star 27%, the Globe and Mail 7%, Power Corp 6%, and, Groupe Capitale Media 5%. (These companies are only listed as being in the print media business---even though I have an on-line subscription to the Toronto Star. I can only speculate that the academics who prepared this chart have decided to list them as only being in the print media business because they have either hived-off their on-line businesses to another party, the on-line aspect is considered a "by-product" of their print business, the revenues from their on-line business are insignificant, or, some combination of all three. Moreover, this graphic is only current up to 2017---and the industry is changing very fast right now.)
Oddly enough, two companies with a big footprint in electronic media also hold significant amounts of print media: Quebecor with 7%, and, Rogers with 8%. (Presumably, the rest is in dribs and drabs too small to show up on the graph.)
The other thing to understand is the larger picture. Even the largest players---Post Media and Torstar---each only control less than 1% of the entire media market. Added together, the companies that are listed as being significant players only in the print media---75% of the entire print market---only add up to being 2.3% of the entire media market in Canada.
Interestingly enough, if you look at the Internet giants who get the most news coverage, their control of the market is much less than what you might think: Google 4.3%, Facebook 2.0%, and, Twitter 0.1%. This is surprising because the academics are looking at the total market share, not just advertising---which is more in tune with people's expectation: Google 50%, Facebook 23.3%, and, Twitter 1.4%. The key point to understand, however, is that traditionally media revenue has come from two sources: advertising and subscription. The narrative most news stories emphasize is how Google has taken away print news's advertising base. But the real story---as explained by this graph---is the way the Internet has eaten-up the subscription base.
People haven't stopped reading new stories. In fact, I would suggest that many people read more than they did when all they could do was subscribe to a newspaper. What they don't do now, though, is just read one particular news source. Instead, they pick and choose what they read through a myriad of different sources. The social media companies---like Google, FaceBook, Digg, etc---exist to help people find the specific stories on the different websites, YouTube and Podcast channels, etc, that they might want to read, see, or, listen to. They also connect advertisers with readers who will specifically interested in their products. (More about that later.)
Newspapers were the original "Internet". They were an "ISP" that supported "blogs" that we called "columns" (I know, I used to write a weekly column in a daily newspaper before I went into blogging). They also had "news aggregators" called "editors" who got to decide what stories to include in the daily "feed". There were also "entertainment channels" that published things like silly cat memes (cartoons) and serious "Netflix"-style entertainment (writers like Dickens first published their novels through serialization in newspapers.) They also had a version of "Kijiji" (classified ads) and "FaceBook" in the old birth notices, graduation announcements, "What's On" features, and, obituaries.
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| Yes, this is the original "silly cat meme". A panel from "Krazy Kat", a syndicated comic strip which ran from 1913 to 1944. Image has to be public domain after all these years! |
They were also the entire "community wide web" because they had "server farms" consisting of printers, and, "networks" consisting of people trucking bundles of papers to drop off points where children delivered individual newspapers to people's homes. This entire network was very expensive to operate but was paid for by both subscriptions and advertising. (There were also government subsidies---more about that later.)
The big players in the media landscape nowadays are the people who "print the paper", "truck it" to the drop off points, and, who "deliver it to your doorstep"---not the guys who write the stories (eg: Adam Donaldson and me) or even sell the advertising (eg: Google). The top five are Quebecor at 4.7%, Shaw 7.3%, Rogers 16.5%, Telus 16.5%, and, BCE (formerly "Bell Canada Enterprises") 27.5%---for a total of 72.5%. It's important to understand that the people who "ate the newspaper's lunch" weren't Google---it was the cable and phone companies. They were able to split apart the different functions of a traditional newspaper---content creation, editing, advertising, production, and, distribution---into different business models and a wide variety of companies took them over. Unfortunately, what's happened is that the foundation that everything else rests upon---content creation---is the only part of the structure that has no secure funding model.
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That brings us to the blue type. Ahem. Yes, someone should pay the creators for what they do. That's because it's hard work researching and writing these stories. And they must be of some value, or you wouldn't be reading them, no? Anyway, if you can afford, why not sign up for a subscription on Patreon or Paypal?
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Schreiner: What's the solution? Man, that's going to be tough.
I don't think the industry led bail out the federal government is proposing is the solution because essentially they are just saying "we will give the mainstream, big media a little money". Should the Globe and Mail, Tor Star, and, Post Media get money and little people like yourself or Adam Donaldson not get any money?
Because you're not big enough?&&&&
What Schreiner is referring to here comes from page 173 of the Liberal's 2019 budget document Investing in the Middle Class. Basically, it allows a specific type of business called a "Qualified Canadian Journalism Organization" (QCJO) access to:
- A new refundable tax credit for journalism organizations.
- A new non-refundable tax credit for subscriptions to Canadian digital news
- Access to charitable tax incentives for not-for-profit journalism.
First question, "What's a Qualified Canadian Journalism Organization?"
For the purposes of Schreiner's comment, it has to be big. It must be a corporation, trust, or, partnership. It must have two or more full time journalists working for it besides the owners. It most assuredly cannot be a local news blog that consists of one person reporting on City Council or interviewing local politicians.
Having frozen out all the "little guys" spawned by the current destruction of local newspapers, the legislation then goes on to describe what money is available to the bigger media organizations.
The labour tax credit that the qualifying corporations get under the proposed legislation is significant. It comes to 25% of a "qualifying employee" (read "newsroom staff"), with a maximum yearly income of $55,000---or a maximum of $13,750/employee/year. Since news collection is a very labour-intensive enterprise, this is a tremendous break for the legacy media. (I suspect that this will be the lion's share of the $8 to $10 million per year that Post Media expects to make off this legislation.)
The subscription write off would allow someone to claim their payments to a digital news source that qualifies as being a "Qualified Canadian Journalism Organization". So if I qualified (which I don't), and you paid me $5/month for a year, that would come $60. You would multiply that by the lowest tax rate (currently 15%), which would come to $9 of tax you wouldn't have to pay. This write off has a maximum of $500 paid in subscriptions per year. The hope is that this will encourage more people to start paying for their on-line news. (I doubt that it will do any more good than any other "boutique tax break". How many people gave up their cars because of the ability to write off what they spent on public transit?)
As for the ability of media organizations' ability to apply for charitable status, that requires the organization again to be a "Qualified Canadian Journalism Organization"---which again freezes out the little guy. In addition, in order to get any money, the organization has to be a trust or non-profit corporation, have a board of directors, and a variety of other rules that probably make sense for a large institution---but would be impossible for a small, locally-focused news start-up to comply with.
As you can see, the Liberal government's program is specifically designed to prop-up the large players in the news media and does nothing at all to help new start-ups get off the ground. This is hardly surprising as the whole policy was created as a result of a series of closed-door meetings between the Liberals and representatives of the legacy media. (This has been documented by Jesse Brown at Canadaland---jump to about 13 minutes into the show.)
More importantly, it is geared towards provincial and federal news organizations instead of local news. That's a problem because the biggest issue in the current decline of journalism is specifically with regard to local news. We still have large newspapers like the Toronto Star and the Globe and Mail, but things like the Mercury have disappeared or faded into irrelevancy. And the only replacement we are seeing are the little "labour of love" projects---like the Guelph-Back-Grounder and Guelph Politico. But that's how all small market news sources ever started. Back in the day, some lunatic would decide that a village needed a newspaper and they'd buy a second-hand press. They'd write the stories, print the paper, sell advertising, and, drop off the bundles of papers at various businesses. Much of their readership never paid for a copy of the paper (they read them in a coffee shop or shared among friends) so publishers often had to subsidize their efforts with a "day job". (I have a pension and Adam Donaldson works in retail.) Grinding out a news blog when confronted by a news desert is exactly the same thing.
Governments have always understood how thankless a vocation journalism can be, no matter how important it is to a functioning democracy. That's why they have almost always subsidized it. The primary way that it did so during the 19th century was with subsidized postal rates. As Stephen Smith writes in The Conversation,
Newspaper owners in that era had another big advantage over their counterparts of today: They could ship their papers across the U.S. at deeply discounted rates. It cost one cent to send a newspaper 100 miles; it cost 24 cents to send a letter or package — with the same weight as the newspaper — only 30 miles.
Upper Canada also had a large postal service. By 1841, there was a post office for every 1,800 inhabitants. The colony’s postal service also had a preferential rate for newspapers that was about eight to nine times lower than for a letter. On top of that, “editors could also send a copy free of charge to their colleagues.”
These highly subsidized arrangements also applied to international newspapers. Starting in 1834, a British newspaper arriving by ship in Halifax would be shipped to its destination anywhere in Canada free of charge.
Think about what this level of support would mean today: Unlimited free bandwidth? Free domain names? Free servers and routers? A newspaper shipping and delivering its paper across Canada for pennies on the dollar?The difference between today's government support and that of the past is that subsidized postal rates benefited everyone---even the little guy struggling to build a readership. In contrast, a labour tax credit designed to only benefit large corporations has nothing at all for the local indie media.
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So I don't think a government bailout is the solution either. So what's it going to take?
One is enforcing our combines laws---which is something our country has forgotten to do unless it involves some Chinese take-over of the potash industry.
We've actually forgotten that we have tools to use that say "no, you can't consolidate a community.Q: Or carve up a market.
Schreiner: That's technically against the law---but the law needs to be enforced. Using our combines law and things like that to say "no" to the media consolidation would preserve competition.
The problem is that solution was a solution 15 years ago and now it's too late. There's been so much consolidation, eh? I think continuing to support public broadcasters like the CBC is critically important but then again you have questions about that all the time: "Is government funded journalism truly unbiased journalism?"
Those are really tough questions. But I think one of them biggest ones is saying "no" to the consolidation of media and carving up markets and making monopolies and oligopolies. That shouldn't be allowed under federal law.
Two. I think that if there's going to be any industry bail out or support of journalism I'd like it to go to the new start up entitites that are popping up. I look at what Canadaland is doing, I like what you're doing, Guelph Politico. These sorts of models are being replicated in communities across the country. Supports should be for the new start-ups---no propping up the old media giants.Hulet: Well certainly Canadaland has done some amazing work---their series on Thunder Bay for example.
Schreiner: Yes. That's fantastic. It's great journalism. We don't have that kind of journalism. The APTN (Aboriginal People's Television Network), the Tyee, the National Observer have all done great work. There's a lot of start-up journalism that's doing really good work.
Maybe that's where the combines law would make a difference, though. Torstar's purchase of Ipolitics, for example. Is that something that should have set off some alarm bells around the anti-trust legislation? I don't know, but it could be a question that should be asked.Hulet: Your support for public broadcasting would extend to TVO?
Schreiner: Absolutely! And for CFRU. Right now I think we should be supporting CBC, TVO, and, community and campus radio and journalism.Hulet: Last night I was listening to the CBC and when they put up the credits they had a "shout out" to CFRU and Adam Donaldson who'd helped them with the program.
Schreiner: Oh. Good for Adam Donaldson.Hulet: So these local stations serve a useful function across the country?
Schreiner: Absolutely. If I think we need a bailout, that's where I think it should go.
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While it's true that there should be some government effort to prevent media consolidation, I don't think enforcing anti-combine laws comes anywhere close to dealing with the whole problem. (Hence Schreiner's "Man, that's going to be tough" statement, and, his saying that anti-trust laws are "one" of the solutions.) As is evident from the graph provided by the Canadian Media Concentration Research Project, there is a greater problem than that of Torstar and Post Media vacuuming up small town newspapers. That's the way media has concentrated into both hardware (like Bell Canada Enterprises) and software (like Google) companies. One of the problems with anti-trust legislation (what Schreiner calls "combine laws"---I think that that's an "Americanism") is that there are some types of technology that create "natural monopolies".
It wouldn't make any sense at all for a new phone or cable company to go around and add another set of wires to the ones that already link houses to the Internet. That means that Bell and Rogers simply have a monopoly that's not going away. Similarly, Google has by far the largest amount of users for it's search engine, which means that unless they do something very stupid, their artificial intelligence will simply always be better than any other companies. (Sorry Bing and Duck Duck Go.)
The Canadian Radio-television and Telecommunications Commission (CRTC) gets around the natural monopoly with regards to Internet Service Providers by forcing Rogers and Bell to sell bandwidth to other companies like Tek Savvy. (If you look up "ISPs in Guelph" you get a listing for an astounding 56 different options. The CRTC seems to be doing its job.) It is possible that the government could step in and regulate software utilities---like Google---but that might prove very difficult because as a transnational it can pretty much exist anywhere it wants if it wants to avoid national regulation. The wires and server farms that Bell and Rogers controls tie them to Canada in a way that the algorithms of Google's search engines do not. Hopefully the recent meetings of parliamentarians from all over the world in pursuit of information about the baleful influence of social media on elections (ie: FaceBook and Cambridge Analytic's influence on the US Presidential election and the Brexit referrendum) is a harbinger of future international treaties aimed at reeling in these transnational corporations. But right now we are nowhere near that actually happening.
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Possibly the most interesting development on this file is the recently announced creation of a union for YouTube creators.
For those of you who don't know, there is a fairly large number of "creators" who have managed to make something of a living off creating their own YouTube channel. The ones I follow range from general interest such as Today I Found Out, to special interest like Chinese Cooking Demystified, radical politics: ContraPoints, and so on. This is so much a "thing" that my smart TV uploaded new firmware last year that allows me to watch YouTube from my futon using my remote control.
I suspect that the success of this myriad of "little guys" working from their apartments has come as something of a surprise to YouTube. It tried to launch a subscription-based channel a couple years ago to compete with Netflix, but it doesn't seem to have gone much of anywhere. That means most of it's revenue still comes from advertising "tacked onto" channels created by third party "partners". And a lot of that are these independents like Chinese Cooking Demystified and ContraPoints. Unfortunately, the executives at YouTube tend to treat these "little guys" like crap.
Just in case you don't know already, YouTube is owned by Google and it uses sophisticated artificial intelligence programs to suggest new YouTube shows to watch based on your past viewing. It also pairs specific advertisements with viewers that they think would be particularly interested in them.
Unfortunately, these programs have been found to easily divert suggestible individuals "down rabbit holes" of radicalism. This has "super-charged" and empowered a lot of individuals like incels (the guy who ran down all those people with his van in Toronto last summer), anti-Muslim types (the guy who shot up those two mosques in New Zealand), white nationalists (the tiki-torch freaks in Charlotteville---one of whom drove his car into a crowd, killing one woman), etc, etc. Google and YouTube have been under a lot of pressure to squeeze out these goofs from the YouTube mix, but the way they've done it has hurt a lot of other people who were nothing more than "collateral damage" to their changing business model. I could write a series of articles just about this, so to be brief I'm just going to post include a short YouTube clip that explains it. (This is pretty important to the future of the media in general, so I'd advise everyone to watch it.)
The key take-a-ways to remember are that YouTube is using artificial intelligence to demonetize specific YouTube channels and that they are not letting the content creators know why they are having ad revenue taken away from them.
Part of this is being justified because the company is using artificial intelligence to do the sorting, which means that there is a "black box" aspect to this process. But as the video shows, there are pieces to this system that can be identified and explained. This means that when YouTube refuses to actually talk to an individual creator and instead just sends out automated responses, someone in management is making a conscious decision to act like a Dick.
Having grown up on a farm, I recognize the situation all too well. There are three partners in this equation: giant corporations buying advertising, giant corporations selling advertising, and, thousands of "little guys" creating content and living off ad revenue. That's just like thousands of little family farms buying tractors and fertilizer from giant corporations so they can raise crops to sell to other giant corporations. In that situation the result was pretty much the same.
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| Agricultural "demonetization". What farmers get paid for a bushel of wheat in constant dollars. From the Through the Mill website, used under Fair Use provision. |
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| A wheat pool elevator. Photo by John Johnston, c/o Wiki Commons. Cropped by Bill Hulet. |
And in both situations, one of the solutions that comes to mind is to band together all those little producers into a larger entity that can fight for their interests on an equal footing with "the big boys". In Western Canada this resulted in the Wheat Pool and the Federated Co-ops movement.
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| A Co-op gas station. Image from SLD website, used under the Fair Use provision. |
We are a community based movement that fights for the rights of YouTube Creators and Users. Our core demands are:
- Monetize everyone - Bring back monetization for smaller channels.
- Disable the bots - At least verified partners have the right to speak to a real person if you plan to remove their channel.
- Transparent content decisions - Open up direct communication between the censors ("content department") and the Creators.
- Pay for the views - Stop using demonetized channels as "bait" to advertise monetized videos.
- Stop demonetization as a whole - If a video is in line with your rules, allow ads on an even scale.
- Equal treatment for all partners - Stop preferring some creators over others. No more “YouTube Preferred”.
- Pay according to delivered value - Spread out the ad money over all YouTubers based on audience retention, not on ads next to the content.
- Clarify the rules - Bring out clear rules with clear examples about what is OK and what is a No-No.
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| Not to be messed with. Logo of IG Metall. |
The important take-aways are as follows.
European law has several features that differentiate it from North American. One of which is that it has "false self employment" laws that do not allow employers to avoid regulations governing employees by simply defining them as "sub-contractors". IG Metall lawyers can sue YouTube refuses to treat YouTubers like real partners (instead of peons). If they win, then YouTube will be forced to retroactively pay payroll deductions for social programs retroactively, which will cost them a lot of money and threaten YouTube's entire business model.
The European General Data Protection Regulation (GDPR) states that when a person requests information that a corporation has about them, they must provide it to them. This directly goes against YouTube's policy of keeping secret whatever information it has about a YouTuber's channel. The maximum fine for violating the GDPR is 4% of the international revenue for a corporation in the previous fiscal year. In Google's case, this would come to $4.9 billion. Please note, that in the case of an on-going policy (as opposed to a "one off" like the Cambridge Analytica fiasco), repeated fines would be levied until the practice stopped.
In addition, the union now has a great many members and has created a list of secret actions that would be followed to create a "shitstorm" if YouTube continues to refuse to bargain with the union past the August 23/2019 deadline.
What's fascinating about this lawsuit is that only the EU has the worker and privacy protection laws that allow IG Metall to sue it. But the EU is such a giant market that Google might find it impossible to simply break the law and ignore them. The result is that for once international commerce liberalization might actually drag big business standards up instead of pushing them down. That is to say, YouTube's business model can't be different from one nation to another, which means that they might feel forced to adhere to the best rules that they have to---even though this is not legally necessary outside of the European Union.
Another added element is that many of the same conditions apply to other aspects of the Web-based media. Advertising has also been drawn away from bloggers and podcasters under mysterious circumstances. (That's why I dropped Google Adsense---overnight my revenue changed from a dollar a hit to a penny.) Depending on how this union battle ends, we might be seeing the emergence of a new advertising funding model for all web-based news.
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I suspect that this is more than most of my readers will want to look at for one article. Sorry about the length, but when I start to pull a thread that comes out of an interview, I never know how much is going to come off into my hands. I hope that this piece will help readers understand a little more about a very complex and important part of our modern world.
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