• About Friends

CBC’s digital shift is helping to kill local news outlets by Barrie McKenna

Dec 1, 2017

Source: Globe and Mail

Postmedia executive chairman Paul Godfrey says the spark for the latest wave of newspaper closures was Ottawa's rejection of a bailout for the industry.

Postmedia Network Canada Corp. and Torstar Corp. swapped 41 daily and community newspapers this week, and then promptly shut nearly all of them, eliminating 291 full- and part-time jobs.

"With the consolidation of print advertising, it became necessary to look around. It really picked up steam when the feds closed the door on any assistance for the industry," he explained.

Opinion: Journalism matters more than ever. We need help to save it

Mr. Godfrey is right that Ottawa bears some responsibility here.

But it's not because Canadian Heritage Minister Mélanie Joly balked at setting up a $350-million fund to shore up the ailing industry.

A more obvious culprit is the Liberal government's tacit endorsement of the Canadian Broadcasting Corp.'s aggressive and expensive "digital shift," which has put the CBC into direct competition with the country's besieged newspapers for online readers and advertising.

The CBC is now among Canada's largest news websites, offering national, regional and local news in the same markets served by the main Canadian newspapers. And it wants to become even more dominant online.

"Our digital shift allows us to extend our reach even further and position ourselves as the public space for all Canadians," CBC president and chief executive Hubert Lacroix says in the Crown corporation's most recent annual report.

Talk about mission creep. Under the Broadcasting Act, the CBC's mandate is to "provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains."

CBC's digital push is also proving to be a growing money maker. The CBC and Radio-Canada generated $36.6-million in digital advertising revenue in 2016-17, up 40 per cent from the year before, according to its annual report. Online advertising now accounts for 12 per cent of all the ad dollars CBC pockets.

That might not seem like a lot. But it's a big deal for daily and community newspapers, which generated less than $300-million over all from online ads in 2015, according to a report earlier this year by the Public Policy Forum about the struggles of the newspaper business.

And unlike newspapers such as The Globe and Mail, the CBC doesn't charge for its digital news, making it even more difficult for papers to generate subscription revenue online.

But it's far from free. The CBC goes about its business with the help of more than $1-billion a year in subsidies from the federal government, which recently bumped that up by an extra $150-million a year. The CBC is using half the new money to become even bigger online – investing in its websites and mobile apps, and greatly expanding its staff of online writers and editors.

Among other things, the CBC is boosting news and other digital content in many local markets served by struggling newspapers, including Halifax, Fredericton, Ottawa, Kitchener-Waterloo, Regina, Saskatoon and Edmonton.

And yet Mr. Lacroix insists the broadcaster has nothing to do with the industry's struggles, including the steep and continuing decline in print-advertising revenue.

"The challenges facing media in Canada are many but they are not caused by the public broadcaster," Mr. Lacroix said in a letter last year to Hedy Fry, chair of the House of Commons Heritage committee.

Indeed, as Mr. Lacroix sees it, Canada needs the CBC more than ever as newspapers shrink in size, numbers and reporting resources.

That may be true. But the CBC could just as easily do its thing by enhancing its woefully neglected radio news and current-affairs operations, which are central to its mandate. Transforming itself into a virtual newspaper, including offering opinion and analysis, is not.

The government has already squandered an opportunity to act. In June, Ms. Fry's committee issued a report on the news business, recommending among other things that the CBC stop selling digital advertising on its news sites.

Ms. Joly didn't bite in her recently unveiled overhaul of cultural policy, which was conspicuously silent on the role of the CBC.

A government bailout of newspapers was always a troubling notion. Independence is essential for newspapers if they want to hold governments accountable.

But Canadians may regret that Ottawa isn't doing more to rein in the predatory behaviour of the public broadcaster in the backyards of newspapers.

The latest closures are a harbinger of more consolidation ahead.

The ad dollars and digital consumers that go to the CBC are lost to your local newspaper.

© Globe and Mail