Since 2018, Canada’s news media industry has been on the receiving end of five bailouts totalling hundreds of millions of dollars, but it doesn’t seem to be enough to keep the owners happy.
The biggest was $595 million over five years provided in the 2019 budget with great promises of transparency. Just which publications have been getting our tax dollars, however, has since become a seeming state secret. This government largesse has boosted newspaper profits to their highest in years, but it will be going away soon, so newspapers are going to need another side hustle if they want to keep their profits up.
Enter the newly introduced Bill C-18 (otherwise known as the Online News Act), which will force digital platforms such as Google and Facebook to pay publishers in Canada for posting links to their content. Yet, upon closer inspection, this legislation has been built on a carefully-crafted bed of deception which keeps getting bigger and bigger.
Newspaper owners worldwide have watched fuming for years as tech companies began siphoning off their massive advertising revenues. First it was Craigslist and other websites offering free classifieds. Now Google and Facebook are selling most of the online display advertising. They have perfected target marketing by following us around online and placing ads on websites that are matched to our very wants and needs. Newspapers can hardly compete with that. They have branded Google and Facebook a “duopoly” for their better mousetrap, despite there being other search engines and other social networks, so that’s a lie. In fact, it’s a Big Lie. If you’re not familiar with it, the Big Lie technique of propaganda was pioneered by the Nazis. It involved promoting a simple falsehood so colossal that no one could have the “impudence to distort the truth so infamously,” according to Adolf Hitler in his 1925 book Mein Kampf. The technique has gained popularity recently because it works very well (just witness Donald Trump’s claims that the US presidential election victory was stolen from him).
Publishers claim the digital giants are stealing their content because links to their articles are regularly shared on third-party platforms like Facebook. That’s another Big Lie. As the Globe and Mail’s own Andrew Coyne points out, “the search and social sites don’t ‘take’ our content: they link to it. Far from using newspaper content to attract people to their sites, they drive readers to ours.” He calls what’s going on a “shakedown,” as does University of Ottawa law professor Michael Geist. His latest blog post calls Bill C-18 “an embarrassment to the news media lobby that demanded it,” pointing out that “mandating payments for services that facilitate access to media sources runs counter to basic freedoms.”
Publishers around the world have launched campaigns designed to persuade governments to redistribute some of Google and Facebook’s growing profits back to them. The first country to fall in line was Australia, where Rupert Murdoch’s News Corp. publishes 59 percent of daily newspapers, prompting two former prime ministers to call for a Royal Commission into his malign media power. Newspaper industry association News Media Canada has been behind the campaign in this country, working in concert with the general trade union Unifor, the cultural lobby group FRIENDS of Canadian Broadcasting, and the think tank Public Policy Forum (PPF).
The PPF issued a report in 2017 titled The Shattered Mirror which portrayed our news media as dying. It was largely a work of fiction, however, as I demonstrated last year in this peer-reviewed academic journal article, as well as in an article for Canadian Dimension.
The Shattered Mirror promoted what I call the Big Lie of newspapering, which is that they are losing money and on the verge of extinction. I disproved this myth in my 2014 book Greatly Exaggerated: The Myth of the Death of Newspapers, and I am in the final stages of writing a book on British newspapers which finds that their latest profits are the highest in years even without government financial assistance.
The Shattered Mirror told an even Bigger Lie when it stated unattributed: “Since 2010, there have been 225 weekly and 27 daily newspapers lost to closure or merger in more than 210 federal ridings.” I found that demonstrably false based on News Media Canada’s own data, which showed the number of community newspapers in Canada had been remarkably stable at slightly over 1,000 since 2011, when it first began taking a comprehensive annual inventory. The number actually went up from 1,032 to 1,046 in 2018, when News Media Canada was lobbying for the $595 million bailout, but the results of that year’s inventory weren’t released until 2020.
The number of daily newspapers has certainly been going down, mostly due to the near extinction of free commuter tabloids, more than a dozen of which have folded in recent years. Some smaller dailies have opted for less frequent publication, but the largest daily to fold in Canada recently has been the Guelph Mercury, which ranked about 50th in circulation. Torstar closed the paper in 2016 after it bought the twice-weekly free distribution Guelph Tribune. The even smaller Nanaimo Daily News was also folded on Vancouver Island that year after Black Press (no relation to Conrad) acquired the weekly Nanaimo News Bulletin.
This pattern of acquiring and killing the competition to create a monopoly culminated in 2017 when Postmedia and Torstar swapped 41 mostly Ontario titles and immediately closed almost all of them. The proximity of such carnage finally attracted the attention of the federal Competition Bureau, which launched a lengthy investigation but decided against laying charges of conspiracy and monopoly which could have landed company executives in prison for 14 years.
There is still good money to be made in monopoly newspapers, a fact seemingly understood only by hedge funds. They now own seven of the 10 largest chains in the United States and took over the two largest Canadian chains in 2010 and 2014. Postmedia, which now owns 15 of the 22 largest dailies in Canada, is two-thirds owned by the New Jersey hedge fund Chatham Asset Management despite a supposed limit of 25 percent on foreign ownership of newspapers here. They make their money by skimming it off the top, holding most of the company’s massive debt in addition to most of its shares. The $45.2 million Postmedia received in subsidies in its 2019-20 fiscal year boosted its profits by 37 percent, but two-thirds came from government handouts.
The remarkable stability in newspaper numbers was noted in the 2017 report of Heritage Canada hearings into media and local communities. It pointed to and even plotted the News Media Canada data (see Figure 1) but for some reason our news media seized on The Shattered Mirror’s fictional figure of 225 weekly newspapers closed or merged between 2010 and 2017. I managed to get the Literary Review of Canada to run a correction a couple of years ago, but the Globe and Mail steadfastly refuses to do so because, well, it was in The Shattered Mirror, so it must be true.
The PPF just issued a five-year retrospective report titled The Shattered Mirror: 5 Years On, which puts the number of disappeared or merged publications at “almost 300” as of 2020. Of course, a number of newspapers have folded or suspended publication since the pandemic began that year, despite all the bailouts. The government puts that number at more than 60, bringing the total of news outlets it says have closed since 2008 to “more than 450.”
Newspapers have had no shame in gaslighting us for decades. Smoking cigarettes was good for you. Saddam Hussein had weapons of mass destruction. Global warming is just a hoax. They’ve saved their Biggest Lie, however, to line their own pockets. Yet they claim to be a trusted medium. Not only is the government playing along with the lies, it’s doubling down on them. This is crony capitalism at its worst.
Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.