In Ernest Hemingway’s 1926 novel, The Sun Also Rises, one of the characters is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.” The same could be said of Canadian media right now, which has pretty clearly entered the “suddenly” phase of its long decline. It was just last week’s newsletter, after all, where I suggested that after Bell Media’s massive cuts to its radio and television operations, the “next domino to fall, it seems clear, is Postmedia.”

Now, it’s falling. As the Globe and Mail’s Simon Houpt reported, the company is in talks with the owners of the Toronto Star to merge the two operations, a deal that would consolidate all the city newspapers left in this country under one corporate entity. “The two companies would share operating control of the new entity,” the Globe’s Andrew Willis and Joe Castaldo reported, “while existing Postmedia shareholders would own a 56-per-cent economic interest and Nordstar — owner of about 70 titles — holding a 44-per-cent stake. Nordstar, controlled by entrepreneur Jordan Bitove, would retain a 65-per-cent stake in the Toronto Star, which would become a separate company.”

In theory, such a merger would have to be approved by the federal government, which could reject it on any number of grounds. But if it ultimately rubber-stamped a deal between Rogers and Shaw Communications, two highly profitable telecom companies that already operate in a transparently oligopolistic industry, it seems unlikely that it would block a deal between two dying media companies.

There is, I acknowledge, a certain logic to the deal. Despite increasingly generous government subsidies, both companies are still hemorrhaging cash, with Postmedia alone losing $36.7 million over the first six months of 2023 (after losing $26.5 million over the same period in 2022). It may well be the case that with the ongoing decline in both readership and advertising revenue (thanks to tech giants like Meta and Google), most cities in Canada can no longer support more than one newspaper. It’s not even clear that some can do that.

What is clear by now, though, is that the federal government’s ongoing attempts to staunch the bleeding aren’t working. Keeping the incumbents on life support is a good way to slow their decline, but it does nothing to treat the underlying illness, much less provide a cure. As Paul Wells said in his Substack newsletter, “I certainly don’t think the remedy for our ills is to support absolutely any harebrained policy that would put the largest and oldest news organizations on life support. Surely by now it’s becoming obvious that such policies are futile.”

This isn’t to suggest the federal government shouldn’t support journalism. Now, more than ever, we need government intervention to address a pretty clear market failure, one that threatens to leave Canadians less informed and more prone than ever to falling into echo chambers. We saw the impact of that during COVID-19 when conspiracy theories and disinformation flourished online, and that will only get worse if the digital truth vacuum gets even bigger.

But supplying more bags of blood to a patient who keeps bleeding out isn’t a real solution. We need to reckon with the fact that the economic model that used to sustain the business of journalism — advertising, and specifically classified advertising — is never coming back. And as Wells wrote, “I’m not sure we’d go back if we could. It can’t be replicated with simplistic policy Band-Aids. And if our leaders were honest with themselves, they would admit they wouldn’t go back if they could.”

As to the reader-funded journalism Globe columnist Andrew Coyne suggested the media must embrace, there’s clearly a space for it (one that Canada’s National Observer occupies, in part). The problem with Coyne’s argument is that this space is always going to be constrained by our relatively small population and proximity to the American cultural machine. As I’ve said before, the absence of scale or meaningful cultural boundaries makes Canada (well, English Canada) the most challenging media market in the world right now. That’s not about to change any time soon — if ever.

The declining level of trust that Canadians have in the news, and their renewed reluctance to pay for it, won’t help here. According to a new report from the Reuters Institute for the Study of Journalism at the University of Oxford, the percentage of Canadians who pay for online news dropped from 15 per cent to 11 per cent in 2022. “This is the first decline since 2016, when Canadian data was first collected, and the lowest result since 2019,” academics Sébastien Charlton and Colette Brin wrote.

A proposed merger between the Toronto Star and Postmedia is just the latest harbinger of doom for Canada's journalism industry. Why it's time for the federal government to do more — and why trying to save the past isn't helping the future.

A strategic reinvestment in the CBC, refocusing the corporation away from things like opinion and entertainment and towards more resource-intensive news gathering and investigative journalism, still makes heaps of sense to me. If there was ever a moment for a major strategic repositioning, it’s right now — especially with a potential Prime Minister Poilievre lurking on the horizon.

Bigger government investment in digital media operations, ones that meet some basic standards of journalism (looking at you, Rebel Media), seems equally obvious. There are plenty of levers available, from tax credits to direct subsidies, that could support the flourishing of a wide range of operations and organizations that actually meet today’s needs rather than simply sustaining yesterday’s choices.

It should also use the ongoing negotiations with social media giants over Bill C-18, its Online News Act, to tilt the table towards the future rather than the past. As it stands, as much as 75 per cent of its estimated $320 million in revenue would go to giants like Bell Media, Rogers Communications and the CBC. Instead, they should be trying the reverse and sending the majority of revenue collected to publications and ventures that were created with the 21st century (and its dominant means of communication, the internet) in mind.

But whatever it does, it needs to do something big — and fast. A merger between Postmedia and the Toronto Star might slow the demise and diminishment of each, but they’re both still stuck on the same road to oblivion.

If we want our democracy to be informed by facts and data rather than conspiracy theories and digital memes, we need to invest some of our shared resources in some new ideas and opportunities. Yes, the cost may be high. But the cost of doing nothing here is much, much higher.

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Updates and corrections

| Corrections policy
June 30, 2023, 10:53 am

This story was corrected to reflect the fact that the Competition Bureau does not have the authority to reject mergers.

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if only the CBC were not filled with Harper appointees in key positions just before the change of government in 2015, the obvious solution would be to expand the CBC to do fact finding and local news. Unfortunately, the CBC is almost as right-wing as the MSM. You listen to Power and Politics, you think the entire panel consisted of Conservative party members.

I think that, like everyone, CBC is trying to pretend things haven't changed as much as they have, claiming some sort of solidarity instead as "political junkies" but Poilievre and the convoy along with Trump and the Jan. 6th insurrectionists are still the elephants in the room.
So there's a lot of pulling punches in order to remain civilized. What drives me crazy is Rosemary Barton having so much air when she's clearly conservative, but that does mean she can do the hectoring, gotcha thing convincingly so she's risen in the ranks as it were.
Being Canadian, we watch and listen to the token conservative or two that have been politely included, ever hopeful that they'll sound more reasonable, and most can maintain that or they wouldn't have been invited on, but there are usually giveaways throughout.
It's like with CBC radio having Nenshi and Farkas on, apparently and surprisingly friends, and the latter made a big show of converting in the provincial election to voting NDP, but as you listen to him you realize, oh, he still thinks THAT'S okay (well of course he does, he can't help it) and you realize that he hasn't really changed his ideas, he's just found some redemption and positive CBC attention by openly expressing remorse at what an a*hole he's been in his bid for power in municipal government. And he doesindeed sound more pleasant.
And along with the standard appeal of the sheer novelty factor of such political conversion, the fact that Nenshi took Farkas under his wing when he was so soundly defeated also jived with the empathy and sentimentality that CBC is currently SO preoccupied with (it's become a bit embarrassing actually) so a feature of interest was created for listeners.
So we're reminded again how even CBC has become more of a business than it once was, and so is forced to compete. The conservative model of infiltrating boards at all levels with those of their persuasion has worked like a charm.
But who knows (or cares) how Farkas actually voted?

I feel the wounds suffered by “mainstream media” are totally self inflicted. Real News took a back seat to sensational headlines and shock pieces. No story after, no real reporting or journalism. Just getting people to click or buy a paper. I used to have print or digital subscriptions to all the major papers, but slowly cancelled them all. It also became quite obvious who was controlling the editorial content. (Right of centre and south of the border) I now search for small Canadian controlled sources that do the actual reporting. I can get both sides of issues, it just takes a bit of work. I’m very happy to have stumbled onto National Observer recently. It fits many of my interests and seems to have actual factual reporting. The Feds would do well helping publications like yours in my opinion. Let the Postmedia group die it’s natural death. The real reporters will find new ways to share their stories and get paid.

I don't bother with anything owned by Postmedia these days. Postmedia is biased, everything pushed right, silent on wrong doings by the conservatives, but with everyone else like our PM, can't even fart without Postmedia turning it into a scandal. None of the journalists are journalists, they just lap dogs, following a right-wing agenda. Some of the Postmedia publications are not even fit to sit next to the trash National Inquirer at the grocery store, they are so bad.

I am glad we have the National Observer and as Canadians we should fully support it. Let Postmedia die in this country, they offer Canadians no value what so ever.

I like the idea of a model of subsidies based around something a bit like Kickstarter or Patreon. The idea is, the government has a web portal, and if you're a Canadian news (or perhaps media generally) outlet, you get yourself a page there. And, every Canadian has $X/year in Canadian media subsidy, which they can assign on this portal to whoever they want. Of course, many Canadians won't bother, or won't even be aware of the portal's existence (although all those media outlets will have motivation to make sure people find out!). So, the pool of money from all the people who didn't assign their subsidy, gets assigned according to the average of the people who did.

I gave up on “main stream media” years ago when I realized they were the voices of large corporations and did not represent us ordinary people. It is the large corporations that have got us into the mess we are in - global warming, pollution, and inequality, In their world the end point occurs when one person owns and controls everything.

I despised Postmedia from day one, and dropped the Globe and Mail, even though it had solid reporters and some good columnists, because of its ongoing refusal to police its comment forums for bigotry, racism, and sexism. If the federal government wants to support Canadian journalism, it should provide hands-off subsidies tied exclusively to local, provincial, and national reporting and let the likes of stinking Rex Murphy sink or swim on their own.

The fact that the Globe and Mail still endorses conservatives during federal elections is more the problem though because even if they skewed right at their inception (which WAS before confederation after all), the fact that they STILL DO despite conservatives having basically devolved into the Convoy Party of Canada, i.e. a bunch of ignoramuses who ALSO, even worse, refuse to take climate change seriously reduces even this national, flagship newspaper to part of the problem.
Under the dire circumstances we're actually facing at this point, you're either WITH US, i.e. the progressive majority, or you're against us. No more crap about the supposed virtue of hearing other "points of view" other than our own because we already KNOW what the right wing wants and what it's willing to do to get it but we also know they've lost their bloody minds so WHO CARES what they even have to say anymore? They're all basically Trump or Putin; we're all Ukraine. Period. So ignore the banality of evil guys altogether and start lobbying the Liberals and NDP to formally unite into a new progressive party devoted to the democratic socialism we now desperately need.
End-stage capitalism is here and it's not pretty; IT'S what should be on life support. Following it should be social media, that revenge of the nerds experiment that started with clever incel Zuckerberg devising a network at university to rate women and then saw a way to move fast, break things, and rule the world by devising destructive algorithms that spawned and then willfully spread DISINFORMATION, a first, unprecedented, and yet somehow wasn't shut down RIGHT then, was allowed to spread all over the world.
How is it not obvious, especially with Twitter now OWNED by yet another billionaire psycho who also wants to rule the world that we need to simply STOP enabling him and the likes of HIM in any way, shape or form? Why are so many intelligent people willing to be so blatantly used and manipulated for the sake of an "online persona?" And why are there "influencers" when we're already deluged, are literally drowning in advertising EVERYWHERE, making incursions on every screen, slowly but surely crowding all pertinent information in an article we're trying to read into a few lines in the middle? It's as exhausting and unsustainable, as combustible as fossil fuels.
Everyone says we can't go back but if you're on the wrong road, as we so clearly are, don't we HAVE to, or we're all toast?
Isn't it enough that we'll never again experience the climate of our childhoods, as Sandy Garrosino said?

No more crap about the supposed virtue of hearing other "points of view"

There's a lot to be said about understanding other points of view. But at a certain point, when you've heard *and* understood what someone has to say, you might still choose to reject it. And there is no obligation to keep giving the same people your time and attention and expectation of good faith if they've repeatedly shown it's pointless.

My most familiar experience is with climate change denial, where people who know nothing about science parrot the same talking points year after year, with zero willingness or ability to even try to understand what they are arguing against. In at least a couple of cases I know, individuals kept this up right until they passed away.

Well put.