Are broadcasters on the web “unfair” competition for newspapers?

Bob Cox’s editorial on the CBC’s new strategic plan is a welcome contribution to the dialogue concerning the future of public broadcasting in this country.  (Mr. Cox is Publisher of the Winnipeg Free Press and Chair of the Canadian Newspaper Association.) It raises issues that have been the subject of debate in Europe for some time, and which need to be resolved if the inevitable restructuring of the CBC is to have the support of the country’s newspapers.

Some context will, I hope, further clarify the issues.

When the BBC was took to the airwaves in 1922 as the world’s first national broadcaster, pressure from newspaper publishers resulted in a rule that prohibited it from presenting news bulletins until after the evening newspapers had hit the streets. Here in Canada the CBC and its predecessor, the CRBC, were similarly hobbled in order to prevent “unfair” competition with newspapers. It was not until well into WW2 that our public broadcaster was given the resources and mandate to mount a fully-fledged news organization. Even then, though, almost all on-air commentary was outsourced to newspaper columnists and reporters.

The animosity between newspaper publishers and the public broadcaster subsided over the decades, but as Mr. Cox’s editorial indicates, it has never completely died away. Newspaper publishers continue to resent the fact that broadcasters have the ability to present news within moments of its happening, so that by the time newspaper reports are available, the typical story has lost much of it novelty and immediacy.

The advent of digital, on-line media—news blogs, aggregators and websites—have amplified the irritation. Newspapers, hit hard by declining ad revenue as sponsors migrate with readers to on-line media, have been trying to stay afloat by bulking up their websites. The best of them have had real success both with ad revenue and with subscriptions. Britain’s Guardian, for example, boasts nearly 25 million unique views (visitors) a month.

But broadcasters have so far proved to be more adept than newspapers at providing what audiences want when it comes to digital media on their laptops, tablets, and smartphones—which is: grabby headlines; concise, punchy, unambiguous prose accompanied by brief video clips; all organized in user-selected priorities. In the U.K., the Guardian website, for all its popularity, is a pale second to the BBC’s in unique monthly views. Here at home, CBC.ca ranks 18^th in this country’s top 100 web destinations, while the Globe and Mail and the Star, topping the newspapers, rank 46^th and 53^rd , respectively.

Given that the CBC, like all public broadcasters, derives the bulk of its income from a government subsidy, it’s easy to understand why newspaper publishers would be angered and alarmed to hear CBC President Hubert Lacroix announce that the corporation henceforth will put conventional television programming in the background and focus instead on the cheaper expedient of disseminating commissioned content via a digital on-line media.

As Mr. Cox correctly points out, “the CBC was not set up to be a publicly subsidized media company. It was not set up to compete with newspapers that existed 80 years ago, or for that matter any media that have come along since that time that do not do over-the-air broadcasting.” And yet, he complains, “it is now proposing to do just that – exactly the same thing The Globe and Mail or the Winnipeg Free Press is doing, only we do it without a public subsidy.”

It’s worth point out, as an aside, that it’s not just the CBC that receives a substantial federal subsidy each year; commercial broadcasters receive almost the same amount in the form of tax rebates and write-offs, funding for original programming, and so on.

But more to the point, Mr. Cox seems to think that digital media aimed at mobile devices is turf that rightly belongs to print media like newspapers. In fact,  whether the new digital media are a natural extension of print, or of radio and television, is a moot point. Sites like thestar.com and cbc.ca are an amalgam of both traditions. So broadcasters might as easily complain about newspaper websites horning in on their territory as vice-versa.

From business point of view, most newspaper websites closely resemble conventional television, in that they strive to achieve widespread popularity—high ratings—in order to sell advertising, which is their only source of income. On the other hand, the traditional newspaper business plan more closely resembles specialty television channels in which substantial income is derived from subscriber fees, supplemented by ad revenue.

In the special case of the CBC, the friction could be ameliorated, if not completely resolved, if the public broadcaster were to do immediately what it must ultimately do, and that is get out of commercial sponsorship, on all platforms. Its current advertising revenue would then move to commercial media, and the CBC would be free to pursue public broadcasting goals, which involve serving the interests of the public, rather than advertisers.

Of course, if it is to do this, it will have to produce the kind of top-quality Canadian content for television and radio (regardless of distribution method) that commercial broadcasters reject as unprofitable. Where to find the necessary funding without unduly burdening taxpayers is another topic; it can be done.