Pandemic strikes news industry unevenly, experts say
Local journalism faces financial uncertainty as ad revenues continue to dry up because of a collapsing business model, experts said during a panel Thursday at Carleton University’s Journalism in the Time of Crisis symposium. That uncertainty has been compounded by the global pandemic, causing hardship as the industry struggles to regain its financial footing.
The irony is that an increase in readership by consumers anxious for news during the pandemic hasn’t translated into increased revenues for news organizations.
“What’s problematic is that there hasn’t been a decline in readership, it’s been quite the opposite,” said Colette Brin, a Université Laval professor and chair of the Independent Advisory Board on the Eligibility for Journalism Tax Measures. “What is causing a lot of financial difficulty is a lack of a mechanism to convert the increase in readership into money in the pocket of the publication.”
Brin was joined on the panel about support for journalism as a business by Edward Greenspon of the Public Policy Forum, former Toronto Star publisher John Honderich, Kevin Chan of Facebook Canada and Emma Gilchrist of The Narwhal.
“Free content has been kind of the model since the beginning of the internet and some newspapers have switched to paywalls with varying levels of success,” said Brin. “Some have always been paywall to an extent, but it’s harder for news publications to move back to paid when it has been free for so long.”
Honderich, the former publisher of The Toronto Star and part of the group of families that recently sold the legendary newspaper to Bay Street investors, said the pandemic has driven down ad revenues even further.
“For the first month or two of the pandemic, I can report that advertising revenues at TorStar were down between 65 and 80 per cent every day, year over year,” said Honderich, the worst drop ever.
Honderich said the Star got a bit of a bounce from public advertisements purchased by the government. The federal government has assisted in supporting local journalism by disseminating pandemic-related information through the purchase of advertising space. Brin said this was an indirect form of media support.
But despite any bump from government ads, irreversible damage has already rattled the industry. “As everyone mentioned, the structural crisis is not going to disappear, and the losses incurred from the pandemic are not going to come back,” said Brin.
But Brin said that despite these challenges, there is still reason to be optimistic about making journalism profitable.
“Statistics Canada did a report last week about an increase in spending in different ways, and one of those ways was video streaming services,” Brin said. “It’s possible that this consumption pattern and people being called on to buy local can lend itself to see pay-for-news rising,”
But a more permanent answer to journalism’s need for support may rest in the hands of policymakers, according to Brin.
“Through things like tax breaks and assistance from the government, there is additional help for media outlets,” said Brin. “I think that this is a pretty serious step in helping journalism as an industry through its current challenges.”
Watch the whole panel here.
