Thursday, February 03, 2005

Leave it to the market, I tell the Senate media committee

(NOTE: I was invited to appear before the Senate committee on media during its two days of hearings in Vancouver. For those interested, here's a pretty good approximation of my comments, which suggest the market will sort out most problems.
And for an alternate view, check out the presentation by David Beers and Charles Campbell - Creating Counterweights to Big Media - at

Thanks for the invitation.
I'm a freelance journalist now, writing mostly about B.C. politics and providing content to daily newspapers, including The Sun, community papers, radio and occasionally television.
Although I started as a journalist, I also had a career in newspaper management.
I was a publisher of what was then Canada's only foreign-owned newspaper,
publisher and president of two newspapers for the Irvings in Saint John, New Brunswick, and a publisher and group manager for The Thomson Corporation through an interesting time. I've been on the board of the Newspaper Marketing Bureau and was vice-chair of The Canadian Press.
The point being, that I come at this from a variety of different perspectives.
I'll try and address some of the key questions I know you want to look at.
Mostly, I'll suggest that government stay out of this. That's based not on any view that the mass media are in great shape, but on my belief in where solutions lie.
But first a few general observations.
I was publisher of The Red Deer Advocate, then British-owned, when I was recruited to be CEO of New Brunswick Publishing Co. and run two daily newspapers for the Irvings.
I turned to the Kent Commission report on the media before I took the job, and it painted a bleak picture of the newspapers and the Irvings' control.
I flew off for interviews, and Arthur Irving raised the issue of interference in the newspapers' content. They would never say a word about what was in the newspapers, he said, and anyone who claimed they did would be a damn liar.
I took the job.
I have always taken my obligation to readers seriously.  I think they offer up some trust in agreeing to read the newspaper. In return, I think we have a commitment to tell them everything that they would find important or interesting as soon as we have the information.
That's what we did in Saint John. We did a series on pollution in the Bay of Fundy, which focused on Irving family businesses - pulp mills and manufacturing plants and refineries. We explored the problems for small businesses in a community when a single conglomerate with a strong commitment to vertical integration dominates the economy. We put out good newspapers.

The owners, I'm sure, were sometimes unhappy, as any business owner facing unfavorable coverage would be.
JK Irving - one of the two brothers I reported to - personally threw one of our reporters out of a company building, because the newspaper's reporting so infuriated him.
But never did the owners raise a concern with me, or send a message through some intermediary, or hint in any way that they wanted us to do anything differently.
They wanted the newspapers run well.
But they never interfered in content.
And they never worried about monthly financial performance. They just wanted to be confident we were acting competently.

After Saint John, I went to Peterborough, and was publisher of The Examiner, a newspaper with a proud history, then owned by The Thomson Corporation. My desk was the same one one Robertson Davies had used during his decade as publisher.
I felt challenged by talk of the glory days of the newspaper.
So I went  back into the bound volumes, and looked at those newspapers. And I found bad writing, superficial coverage, and a failure to reflect life in a mid-size Ontario town through a remarkable 10 years.

On to Victoria, continuing through a brief period when The Thomson Corporation was giving newspapers once last chance. 
Newspapers had been good to Roy and Ken Thomson.
They extracted remarkable profit margins from their generally monopoly newspapers.
But newspaper were seen, even then some 15 years ago, as the - and this is the ultimate curse - "a mature industry."
The corporation made what I see as a good faith effort to challenge that, gave up and sold its newspapers across North America, a $1-billion business.

I suppose the perfect newspaper owner, from an editor's or publisher's - or perhaps some committee members' - perspective would be a private, local owner, with little interest in maximizing profitability, and a matching lack of interest in influencing local events.
There have always been few of those people.
The owners I have worked for were uniformly interested in how many people were reading the newspaper, and how much cash I could send their way at the end of each month. Their concern was often in meeting whatever quarterly profit target would please the principal shareholder or investment analysts.
That is a significant factor affecting the quality of news coverage. But owners - individual or group or corporate - will always set their targets for a return on their investment.
None of the owners were interested in content, except as it related to those two factors.

There are no guarantees that owners will be disinterested. Many of Canada's newspapers were started as vehicles for the proprietor's views.
And owners have a right to say this is what I want in the newspaper.
But exercising the right brings risks. The public does notice, and react. Canwest's experiment in having newspapers run editorials expressing a common, corporate view on some issues was short-lived.
Readers reacted badly.
And the editorials ceased appearing.
And although media corporations may have dominant shareholders, managers have a legal obligation to act in the best interests of all shareholders.
If pursuing a particular viewpoint or demanding certain editorial content damages the business, those other shareholders have a right to complain, and ultimately, I suppose, a case for damages.

I am worried about newspapers, and the other mass media.
When I started working for daily newspapers, close to 80 per cent of people in most towns and cities read the paper on a typical day.
Flawed or not, the newspaper provided a shared understanding of the facts about issues. People could disagree about solutions , but they started from a common understanding of some of the basic issues. The newspaper helped make them a community.
Now the percentage of people who read a daily newspaper on a typical day is 40 per cent to 70 per cent.
That's a big erosion of our role, and in my view a loss for communities.
It should have us desperately concerned that too many people are finding that they do not need a daily newspaper as part of their lives.
But the reasons for that have little to do with changing ownership patterns, or media concentration.
Our communities have changed, and become much more diverse in every sense.  More than one-in-three Vancouver residents now self-identifies as being of Asian ethnic origin; a large percentage are relatively recent arrivals.
Daily newspapers in Vancouver, and across Canada, have not found a way to attract large numbers of those readers.
And they've struggled to convince younger readers that a daily newspaper should be a habit, not an occasional indulgence.

Despite the fears about concentration, the media world has actually become much more diverse.
It is not that long ago that people in Vancouver and its immediate suburbs had a choice of two daily newspapers, two Canadian television stations - and three U.S. stations - and a handful of radio stations.
Now they have four English language daily newspapers - three with the same owners - two Chinese-language daily newspapers, and a couple of U.S.-based daily newspapers.
And apparently soon one or more free daily newspapers.
Most households also get two community newspapers delivered to their door several times a week, and at least in this market they are competing vigorously on the strength of their editorial content. There are at least five weekly newspapers aimed at IndoCanadian readers, and dozens meeting the information needs of other ethnic communities plus a wide range of broadcasters and the Internet information sources.
Even given the concentration of ownership, it's a picture of diversity.

That's not to say  any of these media are necessarily doing a superb job.
But I haven't seen any evidence that concentration or convergence have made a significant difference - positive or negative - in the job being done for readers by the media.
I have concerns.
We've lost at least some of the potential for experimentation, with different owners taking different paths to improve the value for readers, listeners and viewers. It is natural for a large corporate owner to attempt find one best path.
And the potential for abuse does exist. An owner with a large number of properties, especially across media, could be tempted to use editorial coverage in ways that would be both unfair to readers, and anti-competitive - promoting it's television offerings in the news pages for example. That would violate the trust with readers, and provide an unfair competitive advantage.
But I haven't seen it, and so no need for action or intervention.
On to the questions you are asking presenters to consider:

1)  Do Canadians have appropriate amounts and quality of information about international, national, regional and local issues, considering availability, relevance, lack of bias and inclusiveness.

My position is that only Canadians can answer that question, and they answer it most clearly by deciding to support new sources if they are dissatisfied with existing ones.
The market is the only effective way that I can see for concerns about the media to be addressed.
The alternatives - state regulation, or councils with the ability to dictate news coverage, or more publicly funded media - all create new problems, especially around freedom of expression, that should be taken seriously.

2) Are communities, minorities and remote centres appropriately served?

Again, the market will decide that.
But my impression is that lowered costs of entry and a greater advertiser interest in target marketing have meant that in terms of their information needs they are remarkably well-served. Across much of B.C.> remote communities are served by competing newspapers; many are excellent.
The experience and priorities of minorities aren't well-enough reflected in mass media; that will change as a matter of economic survival for the various media providers.

3) Do changes in concentration or cross-ownership affect diversity in the news media or would further concentration be likely to do so?

It's almost inevitable that there would be some reduction in diversity, though much less than claimed.  Some coverage is pooled, but the media has always relied on The Canadian Press or Broadcast News or corporate news services.
Convergence has led to more pooled reporting, which reduces slightly diversity of reporters' judgments.
But the impact has been tiny, and doesn't call for a public policy response.

4)  How can the Government of Canada develop a policy and regulatory framework
that encourages an appropriate diversity of news and views without harming freedom of the press?

It's probably clear that I don't believe that it can.
The Competition Bureau and the CRTC can usefully continue to attempt to maintain market competitiveness, assessing the economic impact of changing ownership.
But beyond that any proposal to improve diversity or quality that I have seen is either ineffective or contrary to basic principles of freedom of expression.
(Often both.)
My view comes down to respect for the public. If they are not receiving the information they fell they need, they will abandon the current dominant media and seek alternatives.
If they believe corporate interests are being placed ahead of their interests, they'll quit reading or watching.
And the media will either improve, or be replaced.

6) Finally, should existing foreign ownership restrictions be changed?

Despite everything I have said, I recognize that we are moving through some large changes in the news and information world in Canada.
Allowing more foreign ownership at this time raises the possibility of a large increase in concentration. Foreign ownership means the opportunity for access to more capital; that increases the likelihood of more acquisitions and concentration.
It seems simply prudent to leave the restrictions in place until we have more experience with the effects of convergence, especially given the lack of any compelling case to change the worlds.

Thanks for the chance to speak with you.
Although I've mostly said don't do anything, I do think the committee's work is important.
And I would like to see similar reviews, perhaps smaller in scale, every three to five years.
I strongly oppose intervention.
But regular outside scrutiny and criticism would be useful for the media and for the people who rely on us.

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