By: Greg McGrath-Goudie, Orillia Bureau Chief
It is fairly common knowledge that media companies are floundering in the 21st century. The rise of social media has left traditional business models—such as those of newspapers—struggling to stay afloat as the news becomes readily and inexpensively available across a variety of online platforms. Facebook and Google, for example, make it difficult to monetize digital journalism when they make the majority of ad revenues, and the traditional model of print advertisements has a difficult time sustaining media companies in a world where the news is a few clicks away.
Boston University reports that newspapers generate 90% of their revenue from advertisements, and that only 10% of this revenue comes from online advertisements. As we are living through a time where 18-34 year olds are significantly more likely to access the news from a mobile device, there is decreasing incentive for people to purchase and read newspapers. This phenomenon leaves media companies struggling to stay afloat. Between 2010 and 2016, the 36 daily newspapers published in British Columbia dwindled to 13. Postmedia, a Canadian newspaper conglomerate, had to cut 3000 positions between 2010 and 2016. Traditional journalists are increasingly overworked to generate content in a business model that is fighting to survive. Consequentially, some online news has become geared towards generating traffic as opposed to quality journalism. The incentive is to generate clicks, by any means necessary, in order to produce revenue.
BuzzFeed News reports that, during the 2016 American presidential election, people from the city of Veles, Macedonia, harnessed this incentive to generate money. Many young people, as young as 16 years old, began flooding Facebook with “aggressively pro-Trump content aimed at conservatives and Trump supporters in the US.” Over 100 media sites began publishing content from the small city, under domain names like “USConservativeToday.com” or “TrumpVision365.com.” The articles were often sensationalist and lacking in truth—one headline read “Hillary Clinton in 2013: I Would Like To See People Like Donald Trump Run For Office; They’re Honest And Can’t Be Bought.” This article generated over 480,000 interactions on Facebook within its first week of publication, and some of the individuals flooding the American market with such content were able to make upwards of $5000 per month. These actions had little to do with the political leanings of the people of Macedonia—some people reported that they had tried to write progressive articles, but that they simply did not generate the traffic that Trump articles did. The almighty dollar prevailed over journalism in this instance, and people living thousands of kilometres away were able to recognize and harness it.
In reaction to the dismal state of 21st century journalism, the Canadian government launched the “Canadian content in a digital world” consultation in 2016. This initiative aimed to generate ideas with Canadian content producers to the ends of strengthening the “creation, discovery and export of Canadian content in a digital world.” One of the organizations involved in this consultation, the Alberta Weekly Newspapers Association, seeks to find solutions as to how community newspapers—which provide vital political information pertaining to the various communities across Canada—can continue to perform their services in upholding the democratic process. They report that “75% of Canadian digital ad revenue is going to Internet oligarchs Google and Facebook. The overwhelming market dominance of these digital content platforms is sucking up enormous volumes of advertising dollars that once underpinned the business models of the actual content creators.”
The association offers numerous solutions for improving the state of Canadian journalism, especially as it relates to local news across the nation. They note that the federal government used to spend upwards of 47% of its advertising budget in Canadian newspapers, but that this figure decreased to 7% by the 2014-15 fiscal year. If governments reinvested in local news insofar as advertising goes, newspapers would receive a much needed boost in capital. The association also suggests that Canadian news subscribers should be allowed to claim deductions on their news subscriptions, which would effectively make community news more financially accessible and attractive to a generation of people who receive their news through social media. Finally, they suggest that nations could “Bring Internet Giants to the table” and tax these corporations on the revenue they generate.
Although print media is on the decline, it still plays a vital role in delivering communities their news—especially as the profit margin of online media is considerably lower than the traditional model was at its peak. The idea of taxing large corporations like Google or Facebook may be daunting, but it would create the potential for a profitable transition to a purely online format, as the additional revenue would create the opportunity for actual journalists to do their work. Instead, the market is at an impasse—it is impossible for many media companies to profitably transition to online-only production under the current model, but the news is increasingly accessed online. The lack of market saturation or profitability not only creates incentive for sensationalist reporting, but it threatens to destroy objective reporting as we currently know and understand it. Until a profitable online model is created and functions properly for Canadian communities, perhaps tax deductions and a re-doubled effort in investing in local newspapers is the path forward. In any case, the dismal state of journalism is a pressing issue, and solutions need be implemented in order to stop its rapid descent.