Grappling with Change

By Maule, Christopher | Canadian Speeches, May-June 2003 | Go to article overview

Grappling with Change

Maule, Christopher, Canadian Speeches

The media are seen as still grappling with sweeping technological change. Conglomerates have suffered big financial setbacks, newspaper circulations and profits are shrivelled, digital piracy is a big problem, and widely-read foreign publications that are available free on the Internet make media ownership rules pointless. But at least there's no need to worry about any lack of news media diversity: the only limit is the time it takes to read and view it all. Excerpts from evidence presented June 3.

In preparing myself for this committee... it struck me that the issues that you are addressing would be informed by the book, "When Old Technologies Were New: Thinking About Electric Communication in the Late Nineteenth Century," by Carolyn Marvin; and Elizabeth Eisenstein's piece, "Some Conjectures about the Impact of Printing on Western Society and Thought: A Preliminary Report," in the Journal of Modern History.

The first points out that in the early stages of a new technology, no one predicts accurately how it will workout. This was true for electricity, the telephone and radio, and later on for television and the computer. The second examines what did happen after the introduction of the printing press and traces those effects over the next 400 years.

Currently, the production and distribution of content in digital formats is the technology affecting news and entertainment media -- print, television, radio, film and music. The difference that I see between the issues that you are addressing in 2003 and the previous Senate report is technology. The technology has changed dramatically, and that has changed our understanding, even our definition, of what is included in the media, where "the media" must refer both to the content and to the mechanisms of carriage and distribution.

Media concentration can be examined in both economic and non-economic terms. In economic terms, the issue is the impact of concentration on prices, profitability and market share. Innon-economic terms, it concerns media diversity. The first is measured and evaluated using financial and sales data. For the second, there are less precise indicators, and judgment plays a larger role.

In economic terms, the evidence indicates that daily newspaper operations are experiencing financial difficulty in Canada as well as in a number of other countries. Distribution overall and per household is declining, and profitability is low or non-existent. This suggests that competition or some other factors are causing these conditions and that this aspect of concentration is unlikely to be a problem.

The figures from Statistics Canada show that daily newspaper circulation, as a percentage of the number of households, was 101% in 1950, 71% in 1975 and 45% in 2000.

In response to these conditions, newspaper and broadcast owners are restructuring their operations. Their options are to exit the industry, reorganize existing operations or diversify. All those have been considered or exercised. For example, Hollinger and Thomson sold out some or all of their publications.

Diversification can be into related or non-related lines of business. A logical direction in economic terms is to move into related lines, and thus we see media conglomerates being formed as they try to reduce costs and increase revenues. It is not easy to predict what will work. Canada's media conglomerates are experiencing financial difficulties, and the same thing is occurring with similar firms in the United States, where Mr. Turner reports to have lost all but $1 billion of the $14 billion he initially made in the AOL-Time Warner deal.

Regarding media diversity, another aspect of your concerns, digitization, the force currently bringing about change, creates opportunities for diversity of news, current affairs and entertainment. Its general effects are similar to its predecessors, the printing press, photography, telegraphy, film, radio, television, satellite, fax and VCR, all of which were introduced in a relative short period of time, making it difficult for entrepreneurs and government policy to adapt to the changes. …

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Grappling with Change


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