Saturday, March 21, 2009

The State of Canada's Media

CHCH TV personality Donna Skelly (right) is spearheading an effort to keep the Hamilton station
alive by putting its ownership in community hands and broadcasting more local news.
The station is one of many news organizations across North America in danger of closing.

A pressman scans the final edition of the Seattle Post-Intelligencer
coming off the press. It is now an online publication.

Are we losing the community voice?

Local news coverage is under threat as
the economic risis rips through media outlets

By Eric Kohanik
Special to The Hamilton Spectator

(March 21, 2009)

There is a massive shift under way at Canada's TV stations and media outlets, and it will profoundly affect how they serve local audiences.

Financially troubled times have decimated newsrooms and threatened to close community-based media outlets.

Under this climate, with its unprecedented issues, the federal watchdog monitoring the Canadian broadcast industry will take up its licensing review of private TV stations next month. The hearings of the Canadian Radio-television and Telecommunications Commission will have far-reaching implications. Not only will they examine the heart and economic lifeblood of Canadian TV broadcasting, they will touch on fundamental issues at the core of all media outlets -- journalism and local news.

In fact, the hearings beginning April 27 may be the catalyst that blows the journalistic holes in Canada's media landscape wide open.

The main spotlight will be on Canada's two biggest broadcasting rivals, Canwest Global Communications Corp. and CTVglobemedia Inc., who run the country's two biggest private networks, Global and CTV, as well as two secondary networks, Canwest's set of E! stations and CTVglobemedia's A Channel string.

Among the E! outlets is Hamilton's CHCH.

Both Canwest and CTVglobemedia have been slashing operating, programming and capital costs in recent months, moves that mirror similar cuts by broadcasters in the United States.

The cuts have included significant staff reductions, program cancellations and, in particular, a marked decline in local news coverage.

With stations trimming budgets and staff, reliable TV journalism at a local level is in grave peril. But television isn't the only journalistic arena hit by this. It is affecting local journalism everywhere.

Newspapers and other media outlets across North America have been slashing costs, too. Significant layoffs have occurred at every major Canadian newspaper organization, including The Hamilton Spectator. As a result, what was once reliable, strong and trustworthy professional coverage of local news, issues and even entire communities could soon become extinct on TV screens, websites, radio airwaves and the pages of major newspapers.

Some may blame today's economic downturn, but others say the problem has been brewing for a while.

"Even before the recession, the fundamental question facing journalism was whether the news industry could win a race against the clock for survival," the American-based Pew Research Center's Project for Excellence in Journalism pointed out this week in its annual State of the News Media report.

That clock may be ticking louder than ever.

Much of the attention at next month's CRTC hearings will focus on the fact that Canada's private broadcasters will likely be vying for only one-year licences for their TV stations, instead of the standard seven-year term. At one time, a one-year licence renewal would have been viewed as a rare and severe reprimand from the CRTC -- a punishment for a station not meeting a fundamental promise of performance. Last month, however, the commission announced it was leaning toward one-year licences at these hearings as a way of grappling with specific issues and with the huge financial upheaval affecting the TV industry.

Figures released by the CRTC last month revealed that the total profits, before interest and taxes, of Canada's 99 private-sector conventional TV stations had fallen to just over $8 million for the year that ended Aug. 31, 2008. That's a 93 per cent drop from the $112.9 million in profits chalked up by 97 stations that existed a year earlier.

Locally, Hamilton's CHCH is projected to lose about $29 million next year, according to material filed to the CRTC to support Canwest's application to renew the station's broadcast licence.

In an e-mail exchange, Canwest spokesperson John Douglas said the five stations in the E! network, including Hamilton, have been consistent money-losers for a decade. Canwest is trying to sell CHCH as it wrestles with a long-term debt of more than $3.4 billion.

Broadcasters will also be asking the CRTC to scale back longstanding requirements for Canadian content, a move that will likely have a profound impact on local programming and news coverage.

In its report last month, the CRTC called out what appears to be a clear financial shift away from local programming.

While the money private broadcasters spent on local and other Canadian programming remained "essentially unchanged" last year, at $619.6 million, Canada's private broadcasters boosted spending on foreign programming by 7.4 per cent, to $775.2 million, on the back of increases the previous year.

That jump prompted the CRTC to announce that it is considering whether broadcasters should be required to spend an equal amount of money on Canadian and non-Canadian programming.

But in this big financial picture, it may not be content spending but acquisition that has done more to put the industry in such poor shape.

In recent years, CTV gobbled up CHUM's radio stations, TV stations and cable networks, while Canwest secured the former Alliance Atlantis cable specialty channels.

In Canwest's case, the debt load of its $2.3-billion deal for Alliance Atlantis is magnified by an additional $3.2-billion tab dating back to 2000, when it acquired a chain of major newspapers across Canada. All of which has sent Canwest officials scrambling to begin selling assets this month and to hammer out a new credit deal with its lenders. Canwest now has until April 7 to reach an agreement.

So, how did Canada's media giants end up in such a mess?

Some might point to years of bad decisions that go all the way to the top, particularly the overzealous spending sprees to acquire American shows, with prices sometimes driven up more by a desire to keep shows out of competitors' hands than by any pressing need to fill actual holes in schedules.

Others might blame technology and the Internet, and the growing generations of consumers who have forsaken traditional mass-media outlets in order to get news and entertainment via personal computers or mobile phones.

That has shifted the focus of the advertising industry to those frontiers. But the economic downturn has also led companies to cut marketing and advertising budgets everywhere. That has put a major squeeze on media companies.

Some might even lay at least part of the fault for the current fiscal mess of Canada's media industry squarely at the feet of government bodies such as the Competition Bureau and the CRTC, which have, over the past few years, approved mergers and takeovers that have led to more and more power -- and more and more debt -- being shouldered by fewer major players.

Of course, the complications that arise from mergers, corporate takeovers and financial meltdowns aren't unique to the media world. The steel industry, retail sector and automotive arena are only some of those suffering similar turmoil.

This time, though, the media world is being dragged into it in a different way than ever before.

The influence of TV's big players now extends far beyond TV boundaries. Canwest's assets include its daily newspapers, while CTVglobemedia's interests include the Globe and Mail and a chain of big radio stations across the country.

Other major conglomerates -- Corus Entertainment Inc., Astral Media Inc., Quebecor Inc., Torstar Corporation, Rogers Communications Inc., Transcontinental Inc. -- have also amassed (with the blessing of almost everyone who had a say) multiple layers of assets in the TV, radio, print and digital worlds.

The result? Whereas the collapse of one company might have had a minimal effect on the overall media landscape in the past, the crumbling of one of them today would have far-reaching aftershocks.

This has put the entire media industry, and perhaps all of journalism, in an unprecedented state of disintegration -- a progression that was gradual but is now magnified by the economic downturn.

So, what's ahead? Once the dust settles, the media landscape may look quite different for consumers.

Newspapers are, perhaps, among the most vulnerable. Across North America, major papers in such cities as Halifax, Denver, Seattle, Los Angeles, Minneapolis, Chicago and Philadelphia have already closed down, ceased physical publication or filed for bankruptcy protection. Others have been put up for sale, with no buyers willing to step up.

"This moment is nothing like any experience any of us have had," Rich Boehne, CEO of the Denver Rocky Mountain News' parent company, E.W. Scripps, told staff members Feb. 26 as he announced that the 150-year-old paper would publish its final edition the next day. "The industry is in serious, serious trouble."

"I think we have finally arrived at the point where newspapers are going away," Michael Wolff, the founder of a news website called, told CBS News correspondent Jeff Greenfield last month in a TV report on the state of the newspaper industry. But Wolff didn't see that as a problem when it comes to consumers getting news and information.

"From a consumer's point of view, it's kind of heaven," Wolff said. "There is so much more of it, and it's so much cheaper, that I would be hard-pressed to argue that, in information terms, we are losing anything."

Although information may be plentiful in today's multimedia world, much of it is the same. Fewer and fewer media are controlling more and more of the message. And while the power bases have grown, the individual local voices that make each of them unique are dwindling.

"By our calculations, nearly one out of every five [American] journalists working for newspapers in 2001 is now gone," the Project for Excellence in Journalism points out, "and 2009 may be the worst year yet."

It could mean a dramatic shift in who is covering local news and how. Two years ago, local news website, based in Pasadena, Calif., blazed a new trail, and raised eyebrows in the journalism world, by outsourcing its coverage of local city council meetings -- to India, where two reporters would write stories after watching webcasts of council meetings and interviewing Pasadena's councillors by e-mail.

In the TV world, Canwest and CTVglobemedia both announced strategic reviews of their E! and A Channel stations, with the eventual aim of selling or closing some of them. In fact, CTV recently revealed that it wouldn't even seek a licence renewal next month for its affiliate in Brandon, Man., or for its A Channels in Wingham, Ont., and Windsor and a repeater station in Wheatley, Ont. Unless buyers come out of the woodwork, they will all close down at the end of August.

On the Canwest front, some or all of the E! outlets could face a similar fate. It's forcing some to look at a new form of media ownership.

Donna Skelly, co-host of CHCH's Live At 5:30, has been spearheading a business model that could put station ownership into community hands, filling the station's schedule with mostly local news programming.

The proposal would see the station funded by contributions from the community or other partners, along with an annual grant from the Local Programming Improvement Fund, a pool of money which the CRTC will set guidelines for at next month's hearings.

"I really do think that this is going to be what we have to do in order to grow local news and to protect local news," Skelly explained during a recent interview. "The only unique part of programming today is news. Otherwise, any other show you can pretty much get, whether it's on an American station or a Canadian station, or both.

"By going back to local content, you are carving out a niche. You are tapping into a market that [network executives] have ignored."

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The chopping block

Already Closed

Major Canadian and American daily newspapers that have recently ceased publication:

Seattle Post-Intelligencer: March 17, 2009
Rocky Mountain News (Denver): Feb. 27, 2009
Albuquerque Tribune: Feb. 23, 2009
Baltimore Examiner: Feb. 15, 2009
The San Juan Star (Puerto Rico): Aug. 29, 2008
South Idaho Press (merged with Twin Falls Times-News): August 2008
Capital Times (Madison, Wis.): April 26, 2008
Halifax Daily News: Feb. 11, 2008
Cincinnati Post/Kentucky Post: Dec. 31, 2007
King County Journal (Kent, Wash.): Jan. 21, 2007

Under Bankruptcy Protection
The Star Tribune (Minneapolis-St. Paul)
Tribune Company (publisher of the Chicago Tribune, Los Angeles Times and 10 other daily newspapers)
Philadelphia Newspapers (publisher of the Philadelphia Inquirer and Philadelphia Daily News)
The Journal Register Company (publisher of the New Haven Register and 19 other dailies)

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See this story at the website of The Hamilton Spectator: