Canadian media ‘crisis’ puts democracy at risk, says Torstar chair John Honderich

John Honderich, chair of the board of Torstar, had blunt words Thursday for MPs studying the state of media in Canada.

“My message to you is a simple one: there is a crisis of declining good journalism across Canada and at this point we only see the situation getting worse,” Honderich told MPs on the Canadian Heritage committee.

He said newspapers across the country have cut their ranks of journalists, resulting in diminished political and community coverage and less investigative journalism.

“If you believe, as we do, that the quality of a democracy is a direct function of the quality of the information citizens have to make informed decisions, then this trend is very worrisome,” he said.

Torstar publishes the Toronto Star, the country’s largest daily circulation newspaper, along with the Metro chain of newspapers distributed nationwide, and the Metroland chain of newspapers serving more than 100 communities.

Honderich noted that readership remains vibrant — both for newspapers and their digital offerings. Instead, it’s the business model that has taken a beating.

“The digital revolution plus the advent of the Internet have fundamentally changed the business model for newspapers,” he said.

Honderich, a former editor and publisher of the Star, recalled the days when careers advertising brought in $75 million a year and classified ads filled an entire section of each day’s paper — all advertising that has been lost to the Internet.

“All those revenues paid for a lot of reporters. Without that revenue, we simply cannot afford as many journalists. Indeed, the very business model is at risk,” he told MPs.

Honderich stressed that Torstar has adapted with the times, with websites, such as thestar.com, where online readership is rising, and Star Touch, a tablet offering.

But he said the structural pressures have been “relentless,” forcing newsrooms to shrink. By the end of this year, the Star’s newsroom will have 170 journalists, down dramatically from 470 about a decade ago, he said.

Other Torstar papers have suffered similar reductions, he said.

Torstar is not alone in voicing concern. A group of Quebec media firms representing 148 newspapers this week banded together to appeal to Ottawa for financial help to help pay their transition to the evolving digital universe.

“We are going through a storm, which explains why we need a new way of doing things,” Martin Cauchon, the executive chairman of Groupe Capitales Médias, told the committee.

Cauchon, a former Liberal cabinet minister, told MPs there has to be a “national debate” about the state of newspapers in Canada today.

The Quebec newspaper coalition urged the committee to look at federal tax breaks , similar to those handed out to cultural industries. And they also urged MPs to look at changes to federal copyright laws to curb the ability of Internet sites such as Facebook and Google to use Canadian media content without sharing revenue.

While American Internet giants are fingered as the cause of media financial woes, two media executives Thursday cited a concern closer to home.

Honderich said he now considers the digital offerings of CBC News — “spending incredibly on its website, unlimited resources” — as the biggest competition to the Star. He raised the model of the BBC — the British public broadcaster, which does not accept advertising.

That was echoed by James Baxter, founding editor of iPolitics, an online news service, who called CBC News an “uber-predator,” a publicly funded news website that competes directly with private media companies.

He called on the federal government to stop funding the CBC’s “massive” expansion into digital-only news in markets where there is already brisk competition.”

He suggested that the CBC’s emphasis on digital journalism defies its original mandate to fill a void in rural areas where commercial news was not viable.

He said the CBC’s digital ambitions have had a “profoundly chilling effect” on media start-ups. “That is the biggest single obstacle to there being a vibrant and innovative marketplace of ideas in the media space,” Baxter said.

Still, Baxter urged MPs to be cautious about offering financial supports to traditional media.

“I’m not here asking for a handout . . . fundamentally I believe that preserving the old media is not an option. I want to suggest you save your money by asking that you not bail out my competitors,” he said.