If we had known then what we know now about the technology would we have created the same system we have today—or would it look very different?

Ken Goldstein, president of Communications Management Inc. posed this question to delegates at the WAB conference in Banff.

In the first half of the 20th century, Goldstein said, Canada set in place policies and institutions still shaping our broadcasting system. Yet many of those policies and institutions were based on a mixture of incomplete assumptions about things such as spectrum capacity and on technologies that have been superseded by new realities.

Today, he said, in a time of unprecedented change and driven by technology and consumer expectations, we are at a point where we have to come up with new framing propositions to help guide us for the next five to 10 years as the Canadian media industry makes important transitions in scope, technology and business models.

Last August, Goldstein set out a general outline for how Canadian media might be in 2025.

Here is an updated version of that outline:

• In 2025 it is likely that there will be few, if any, printed daily newspapers in Canada. And it is also likely that their transition to online digital formats will not match their current scope in print.
• In 2025 there might be no local broadcast television stations in Canada.
• It should be obvious that both of those potential developments pose serious issues for the future of local journalism.
• In 2025 we will still watch a lot of television but the structure of the TV industry will come to look less and less like broadcasting and more and more like e‐commerce for programs.
• In 2025 it will be even more important to be able to give Canadians the tools to produce and to discover Canadian content.
• In 2025 radio will likely still fit within our concept of broadcasting. Indeed, in some communities, hyper‐local radio linked to highly‐focused local online services might become a new hybrid answer to the future of local media.
• And, in 2025, the Internet—and multiple devices for receiving it—will have become even more ubiquitous than today.

You might see that as a threat or as an opportunity—or even a bit of both. But it is clear that the pace of that technological change will be far more rapid in the next 10 years than it was in the 1920s, ’30s, ’40s or ’50s.

Earlier this year, Canadian Heritage Minister Mélanie Joly announced a major review of Canadian cultural policies and, she added, “everything’s on the table”.

With that major policy review in mind, Goldstein talked about what can be called “framing propositions”—the assumptions we make as we plan for a rapidly‐changing media world that is already very different than the world in which, and for which, current policies were put in place. Some of the policies are actually based on assumptions, actions or lack of actions that go back many decades. In other words, they were, and are, based on old framing propositions.

“So, we’d better make every effort to get those framing propositions right going forward,” said Goldstein.

First, it’s necessary to measure what we are and where we are as accurately and completely as possible.

• Because if we don’t measure, we can’t diagnose.
• If we can’t diagnose, we can’t develop effective policies to help us make the transition to the future.
• And if we don’t start out with accurate measurements today, we will have no benchmarks to help assess the outcomes in five to 10 years.

Second, we have to resist the urge to make policy based on myths.

The first myth is that Canada suffers from something called “media concentration”.

And the second myth is that the CBC is a public broadcaster. Let’s concentrate on the so‐called “media concentration”.

For many critics and observers of the media the concentration idea has become a convenient scapegoat to be blamed for the current economic headwinds being faced by traditional media and, in particular, by newspapers and conventional television.

It may be easier to come up with a scapegoat than to deal with more complex questions of technology and economics but there is no evidence that the corporate structure of the media industry is to blame for current downturns for either newspapers or conventional television.

The idea that ownership structure or concentration can be blamed for the daily newspaper downturn makes no sense. The biggest single revenue loss for Canada’s daily newspapers has been the collapse of classified advertising. It fell from $875 million in 2005 to $175 million in 2014. Seven‐hundred million dollars in revenue disappeared.

Why?

Imagine a couple discussing how to sell a used sofa. Would the conversation sound like this: “Should we buy a classified ad in the daily paper?”

“No, the daily paper is owned by a chain controlled by a hedge fund.”

Or would it sound like this: “Should we buy a classified ad in the daily paper, or run it for free on Kijiji?”

“Let’s go with Kijiji.”

Despite the ease with which some critics raise the concentration alarm, it is simply incorrect to blame current trends on the ownership structure of the media. What is happening to daily newspapers today was predicted by Marshall McLuhan in 1964:

The classified ads (and stock‐market quotations) are the bedrock of the press. Should an alternative source of easy access to such diverse daily information be found, the press will fold. [Marshall McLuhan, Understanding Media: The Extensions of Man (McGraw-Hill), 1965, p. 207 (originally published in 1964)]

But what about the issue of concentration itself—is the Canadian media market really concentrated?

Let’s start by looking at how one measures a market, and how one measures the market shares within that market. There are a number of tools in the economics associated with competition law, and they all start in the same place—the definition of what is called the relevant market. Once the relevant market has been defined market shares can be defined using audiences or revenues. And then one can apply a number of different tests to get a sense of the degree of competition in the relevant market.

But it all starts with the proper definition of the relevant market. Here’s a definition put out by the European Union: A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer by reason of the products’ characteristics, their prices and their intended use.

[Official Journal of the European Communities, “Commission Notice on the definition of relevant market for the purposes of Community competition law” (97/C 372/03), 9 December 1997]

Note, that the consumer is at the centre of this definition. And the European Union also notes that not all markets are, in fact, relevant markets: … the concept of ‘relevant market’ is different from other definitions of market often used in other contexts. For instance, companies often use the term ‘market’ to refer to the area where it sells its products or to refer broadly to the industry or sector where it belongs. [Ibid]

As an example, let’s say you want to measure the retail market in a small prairie city. So you set out to find all of the information on the stores located within the city limits. Those stores might be one definition of a market. But is it the relevant market? It isn’t if you left out the Wal‐Mart and Canadian Tire located two kilometers outside the city limits because consumers also shop there.

As you are about to see, the claims that the television market in Canada is “concentrated” are based on an incorrect definition of the relevant market—except that the players that have been excluded are not just Wal‐Mart; they are also Netflix and Google and Apple and Amazon and others.

So let’s start by correctly defining the relevant market for Canadian television. Fortunately, we don’t have to look very far to find an excellent definition. It’s on page 89 of the CRTC’s 2015 Communications Monitoring Report.

CRTC comment: “Canadians enjoy multiple sources and means of accessing content, from conventional over‐the‐air linear broadcasting to digital media provided over the Internet. This chart shows the various categories and types of programming sources and platforms.”

As you can see, the consumer is at the centre, and the diagram correctly indicates the many types of television/video competitors for Canadian consumers’ time, attention and money. As far as I’m concerned, this diagram from the CRTC should be regarded as the “gold standard” in defining the relevant market for Canadian television, and all measurements should be based on this diagram.

But what market definition has been used by many of those who claim there is “concentration”? As you can see, they are only counting data for part of the market, not the entire relevant market.

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