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Revitalize News Service

February 5, 2017

A report on how to fix the ailing news industry in this country was in the news recently.  This report was ordered by the government.  Some of all of it may turn into legislation or policy later in the year.

News, especially local news, is important.  It’s a way to keep the public informed.  It’s part of the democratic environment.  That’s why loss of news is a threat to our democratic process.  This report makes an attempt to solve fundamental problems.  It’s not just an attempt to prop up a failing business.

The report seeks a solution without interfering with the grand movements of the news industry.  Print media, newspapers and magazines, are in the decline.  Electronic media, web pages and mobile applications, are on the rise.  In some media, particularly television, news is being presented as entertainment, rather that as information.  It’s made more dramatic and more immediate that it really is, as a way to increase its appeal to news consumers.

The fundamental problems are the loss of local news reporting, along with the centralization of news services.  These movements are a result of cost saving within the industry, along with a desire to make news reporting just like any other content.

Of course, somebody has to pay the cost of good journalism.  There is always a cost.  Sometimes an investigation takes a year to complete.  Sometime’s there’s no story in the end.  Somebody has to pay the salaries of journalists, and pay them well.  There appear to be two models for this.  One is free but requires advertising, so that the revenue from this advertizing pays their salaries.  The other requires subscriptions, so that the consumer pays their salaries.  With this model, there’s no advertizing.  Of course, there could also be a blended model, with both advertizing and subscriptions.

The report made several recommendations.  It wanted to ban all advertizing on the CBC web site or the CBC’s mobile applications, just as CBC radio is prevented from carrying advertizing now.  This does, of course, remove a source of revenue for the CBC.

It also recommended that both the CBC and the Canadian Press start up local news bureaus.  These would provide free news reports to news services, including the CBC and the CP.  The local news bureaus would be funded by the government, just as the CBC is funded by the government now.

Finally, it recommended changes to corporation tax law so that Canadian companies could only claim electronic advertizing as an expense if it was supplied by Canadian agencies.  By this means, companies would shift their advertizing from foreign agencies to Canadian ones.  Canadian advertizing agencies would grow, paying more corporation taxes to the government.  This new revenue stream would be fed back to the new local news bureaus.

This report outlines an ambitious plan.  It certainly contains many good ideas.  I like it myself because I want more local news, and I don’t want to see advertizing.  I do have some reservations, particularly surrounding the corporate tax changes.  Couldn’t the government just tax foreign advertizing agencies, Google for example, whenever they accept advertizing from Canadian companies?  Maybe it’s easier to leave them alone and cause the shift to Canadian agencies instead.

I’m wondering if the two local news bureaus could merge at some level?  It might be to their advantage to become one news bureau.  Even if this did not happen, they could employ the same journalists, or provide the same news stories.

I’m also wondering how these changes would be viewed by other news services or by companies in other countries.  Newspapers, broadcasters, and commercial news sites often complain about unfair competition.  Would these changes make the situation worse for them?  Would the government funding for the news bureaus constitute a subsidy?  This might be a violation of trade agreements with other countries.  Of course, it also might be seen as an innovative solution to a shared problem.  What’s it going to be, then.


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