Telecom giants—not Google and Facebook—continue to dominate Canada’s media economy
Canada’s cable and wireless hypergiants are doing better than ever
Canadian PoliticsCanadian BusinessMedia Science and Technology
Those following the Senate and Parliamentary hearings into Bills C-11 and C-18 might think Canadian media are wasting away while foreign digital giants like Google, Facebook and Netflix are replacing them. Nothing could be farther from the truth, according to the 11th annual look at Canada’s media economy by Dwayne Winseck of the Global Media and Internet Concentration Project at Carleton University. The report, titled “Growth and Upheaval in the Network Media Economy in Canada, 1984-2021,” finds that media expenditures in Canada jumped 5.1 percent to $94.6 billion last year and have risen almost five-fold from $19.4 billion in 1984.
“There is no general crisis of the media,” writes Winseck. “Most media are flourishing.” Digital upstarts like Google, Amazon, Facebook, Apple and Netflix saw revenues from their Canadian operations rise a whopping 35 percent last year to an estimated $15.4 billion, old media continued to recede, but Canada’s cable and wireless giants still dominate. Broadcast television, radio, newspapers and magazines, all of which rely mostly on advertising, “appear to be in terminal decline,” noted Winseck. “Collectively, their revenue has collapsed; last year it was roughly a half what it was in 2008, when their fortunes went into tailspin from which they have never recovered (and probably will not).”
Now out: Growth & Upheaval in the Network Media Economy in Canada, 1984-2021. This is the 1st in our annual 2 part series on the state of the telecoms, Internet & media in Canada. https://t.co/dalgJc5I80 #CRTC #CDNtech cc @pablorodriguez @CompBureau @ISED_CA @IAMCR_X @icahdq 1/x pic.twitter.com/US3l8UK2GJ— Dwayne Winseck (@mediamorphis) November 2, 2022
Newspapers have been particularly hard hit, as their revenues fell to $1.9 billion in 2021, despite successive government bailouts, and are now down 60 percent over the last 15 years. Broadcast TV revenues fell to $2.48 billion last year, a drop of nearly a third from 2011. A dozen local TV stations have closed since 2009, while 31 radio stations have been shut down or not had their licenses renewed by the CRTC, with eight coming in 2021 alone.
Winseck’s compendious report helps put into context the ongoing battles in Ottawa over taxing and regulating streaming services such as Netflix with the Online Streaming Act (Bill C-11), and forcing Google and Facebook to contribute to Canada’s flagging news media with the Online News Act (Bill C-18). “Even if Google and Facebook are properly brought to heel, advertising is not the core of the media economy,” explains Winseck, who is currently in Switzerland on a well-earned sabbatical. “These sectors constitute a small and, for most of the past decade-and-a-half, receding aspect of the network media economy.”
Advertising now accounts for only 19 percent of Canada’s media economy, according to Winseck’s report, while the big telecom companies like Bell, Rogers, Shaw, Telus and Vidéotron continue to take the lion’s share from subscription revenues for cable, Internet access, and wireless services. “The real centre of the network media economy consists of the communications and Internet access segments, i.e. the pipes,” he writes. “In 2021, they had total combined revenues of $64.1 billion, or 68% of all revenue generated across the network media economy.” Revenues of the telecom giants have grown exponentially, notes Winseck, from $13.8 billion in 1984 to $64.1 billion last year, with mobile wireless ballooning from $5.4 billion to an estimated $29.3 billion just since 2000. “Their market dominance is even more entrenched and their technical systems and business models no less inscrutable than any of the Internet giants.”
While online advertising surged 31 percent to an estimated $12.6 billion last year, Winseck notes that nearly all of the growth was captured by Google and Facebook, which together rake in 80 percent of digital ads in Canada, while Amazon now takes another 10 percent. Total spending on advertising in Canada surged a “remarkable” 22 percent last year to $17.8 billion after a flat 2020 due to COVID. The increase came mostly in online ad spend, however, which by 2021 accounted for more than 70 percent of the market. Google and Facebook received 57 percent of total ad sales in 2021, he adds, up from just over a third four years earlier. “Advertising spending across all other media, in sharp contrast, has collapsed, plunging from $10 billion in 2008 to half that amount in 2020, before ticking upwards to $5.3 billion last year.”
One of the most shocking statistics Winseck ferrets out from Statistics Canada employment data is the growth in public relations and the persuasion industries. With the ranks of journalists decimated, those remaining are vastly outnumbered by PR operatives. “In 1987, there were four people working in the publicity business for every journalist,” he notes. “Last year, the imbalance had ballooned to an astonishing 17:1.”
Winseck realizes as a telecommunications historian that the debates over Bills C-11 and C-18 could be a “critical juncture,” or a turning point when regulatory choices might entrench effects that will be felt for a century or more. “The media’s place in the economy, society and our everyday lives is changing dramatically and is currently up for grabs in ways seldom seen,” he writes. “Proposals for fairly aggressive, new forms of digital platform regulation…would have been unfathomable just a few years ago.” Winseck makes no secret of his project’s position on these debates, agreeing that the digital giants need to be reined in. “We are fully supportive of concerns regarding the scale of these companies, their clout, and the threats that they pose to the Internet, some media, society and democracy.”
Government subsidies for media in Canada, such as funding for the CBC, have been “ruthlessly scaled back” over the past four decades, notes Winseck, and are now only a fifth of what they were as a proportion of the media economy. “Turning around that tide would go a long way to strengthening public service media and public interest media.” As a media historian, Winseck realizes that journalism has never been free and has always been subsidized, whether by early postal discounts or the print advertising boom of the 20th Century. “Railing against the idea of press subsidies as if they are an aberration and endemically at odds with the liberal free press tradition is factually incorrect,” he writes. “Once this is understood, then we can have a reasoned debate about what the Liberal government’s journalism support measures do and do not do well.”
The political economist in him, however, urges that any new regulatory framework should “blunt the power and influence of large corporate interests that dominate many, even most, aspects of the media economy in Canada.” A focus on public media that supports not-for-profit journalism, Winseck writes, “would go a long way to revitalizing earlier hopes that the rise of the Internet might translate into a renewed, networked public sphere.” This would be preferable to simply refereeing the dispute between international Internet giants and Canada’s entrenched communications conglomerates. “As profit-driven enterprises, both of these groups will always serve their own private interests first and foremost, leaving large swaths of society to fend for themselves when their communication needs don’t add to the bottom line.”
Winseck seems disgusted by the waves of compromised witnesses and commissioned reports paraded before Senate and Heritage ministry committees considering Bills C-11 and C-18. “Claims that the Internet hypergiants’ fortunes are being made by cannibalizing the revenue that journalism and the music, movie, television and publishing industries need to survive should be met with a healthy dose of skepticism,” he writes. “These debates, however, and regrettably, also tend to be reduced to simplistic, ideologically-driven binaries between cultural nationalists, and think tanks joined at the hip with domestic communication and media conglomerates on the one side versus free and open Internet advocates.”
Dubious evidence is unfortunately “polluting the pool of public knowledge,” adds Winseck, with even the CRTC complicit by publishing erroneous estimates of foreign streaming service viewership. “This, in turn, further undermines not just the legitimacy of the regulator and communications and cultural policy, but democracy, tout court.” Winseck raises serious questions about the broadcasting regulator’s publication of inflated statistics similar to those raised about the Heritage ministry.
“Beyond questions about the veracity of the CRTC’s estimates, we are deeply concerned that its estimates have been used as a kind of ‘threat inflation’ that have served its own interests in bureaucratic expansion while also playing into the hands of those who claim that the scale of international online video service operations pose a mortal threat to Canadian broadcasters and to Canadian culture.
“The publication of such erroneous estimates under the CRTC’s imprimatur has given them a sheen of legitimacy that others have traded on in the context of domestic policy battles over what a new era of Internet services regulation in Canada should [look] like.”
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.