Internet search killed advertising, which was the primary source of revenue for journalism. Except for a small number of generally smaller publications, subscriptions never paid the bills. The business model died, and that was that.
All the other commentary about what killed the media is just arguing about bad management in the buggy whip industry. It wasn’t the woke, or the private equity, or Trudeau, and it won’t be AI either - regardless of the details of any of those things. Once the business model died, none of that mattered anymore.
This is basically true, but as a guy who had to live with the (later stage) process as it happened, and then certainly with the aftermath, I just want to add to Michael's post here. Classified revenue was also massive. The internet killed that, too. But the death of advertising and specifically of classified section advertising were different things, killed by different parts of the internet and in different ways. Losing one of them might have been sustainable. Losing both was catastrophic.
I recall one of your podcast you and Jen discussed this and it sure made sense. I remember the size of the classifieds pre craigslist explosion. 10 pages of jobs, 30 pages of used cars, another section on apartment rentals, you name it. No business can survive losing that kind of revenue. Now its mostly half a dozen obituaries and some scraps. If a major Canadian paper even makes 1000 bucks a month from classifieds I would be shocked.
As Andrew Gorman notes, Jen has made essentially the same points.
Put differently, the buggy whip industry (i.e. the media) had unresponsive and bad management and the other things attached to the corpse of that industry and made it worse. Yes, you can argue woke didn't help and, yes, you can argue that private equity is harvesting cash from the corpse and, yes, Trudeau really made the corpse much more unworthy of saving but the corpse had already died. Quite a lot of metaphors there which only prove that I don't deserve to be a published journo.
I mean, I agree entirely - there is lots to criticize about the media. All of that is entirely fair, and the conversation is worthwhile because even in its diminished state the media is important. But fundamentally the media died because its business model was as destroyed. And IMO it’s a lot of special pleading - “the thing I don’t like is the real problem” - which is just not true.
Canadian news outlets care more about their bottom line than they do about the future of the information commons, and Canadian politicians care more about the fate of their parties than they do about the future of the country. Since the same impulse is at work in both spheres of concern, it's easy to recognize; less easy to understand is how it came to be considered responsible and ethical. Far-sighted our business and political leaders are not, nor do nation-building or the public interest seem to be priorities for them.
Mark you write that "Canadian news outlets care more about their bottom line than they do about the future ..."
So .... do you argue that the newsies should ignore the bottom line? If so, perhaps the staff at those outlets should be willing to work for, oh, say, half of what they now earn? My point is that unless there is a bottom line that is positive there can be no entity that survives.
I expressed myself incompletely. Nothing gets done in a capitalist society unless someone benefits from it financially, but there's still a difference between limiting one's concern to what generates income only this week and what's compatible with generating it ten years from now. Responsible people realize our lives stretch through time, and that 2035 will be the child of 2025 and every bit as real.
Whether one exploits the present in ways likelier to encourage innovation and growth or turn the future into a wasteland shouldn't be an issue for anyone. When I say our priorities are ethically askew, you should understand this to mean that prioritizing 2025's bottom line over 2035's isn't just irresponsibly short-sighted but entirely arbitrary. Since your quality of life (which is very much dependent on the state of the information commons) is going to be just as important to you tomorrow as it is today, it follows that visionary leadership is as much in your long-term interest as in everybody else's.
[P.S. The purpose served by 'newsies,' as you call them, is information diffusion, just as the purpose once served by buggy-makers was transportation. Forcing internet businesses to subsidize traditional newspapers would be as perverse as forcing the first automobile manufacturers to subsidize buggy-makers. Presumably, some of the unemployed buggy-makers ended up with better-paying jobs on the engine line at Ford, and Globe and Mail staff are going to figure things out too. The world isn't about to run out of tasks needing the attention of competent people.]
One of the characteristics I’ve noted with Canadian media is their universal practice of cherry picking news items to support or at least not challenge the world view of those who pay them. So under Trudeau the payers via subsidies became the Liberal Party under color of the Canadian Government.
Agree wholeheartedly AI is extremely useful
In eliminating the need to search multiple sources to get a balanced picture or information set, and that as a result we won’t need as many news collection/presentation sites as in the past, and the demise of many current news presenting organizations. What I see totalitarian government doing now is trying to maintain their current control over public information by either banning AI or forcing content inclusion and exclusion rules on AI algorithms. It will be quite entertaining to see how they try to do this.
The efforts by legacy news media and the government to protect their business seems a lot like building a moat on a sandy beach to catch the receding tide. You might trap some water for a time, but it's still going to seep into the sand or evaporate. I think there's still a market for news, but it's extremely hard to change the culture and structure of a legacy organization created for a different time and technology.
The closest analogue I can think of are how legacy airlines have painfully adapted after industry deregulation: it took decades and several bankruptcies, strikes, mergers, bailouts, and massive layoffs to get the handful of survivors restructured into a sustainable business. However, the fundamental way airlines transported people didn't change: their business is still selling tickets and flying people from one point to another. It's not like somebody invented a Star Trek-style transporter device and the airlines had to reinvent themselves as transporter service providers, which frankly is more like what happened to newspapers, radio, and television.
I've often enjoyed what Peter Menzies has written in the past. However, in this case, I believe that his op-ed fails because of its flawed logic--and his inability to resist the temptation of "click bait" references to Trudeau.
Yes, I understand that many readers of "The Line" are committed Trudeau-phobes. And, yes, I also had reservations about his policies (particularly his government's fundamental failure to take defence and foreign policy seriously).
Nonetheless, in this instance what Mr Menzies has written (about the Trudeau government's perceived failings in respect to the regulation of online discourse) needs more work.
I do not claim that what Trudeau's government rolled out when it passed the Online New Act was "pristine and perfect" legislation. Far from it. The subsidies to news organizations in particular need to be subjected to more scrutiny.
Where Mr Menzies fell down, in my view, was in his failure to properly address the oligopolistic behaviour of the Big Tech companies WRT advertising and other online services. It's pretty widely understood that the big companies (Amazon, Meta, Google and the like) all indulge in "cajoling" (bullying) of clients and advertisers designed to ensure their control of the respective sectors in which they dominate.
I do agree that the Online News Act has not helped address that issue (which begs a few questions about the collusion between well-connected former members of the Liberal Party and the big corporates in the online world).
I also believe, however, that more skepticism of the big online companies is in order.
WRT to the relationship between search results collated by various AI tools and the health of the online information universe, let's face it.
The ease with which political actors (particularly those who like peddle extremist ideas) can game the system by making their information appear to be of the same quality as top-notch news organizations is a BIG problem.
Another BIG problem is the deliberate dissemination of false or deeply flawed information by state actors (think the PRC, Russia, Modi's India and other arguably rogue states--and yes, Trump's America and Netanyahu's Israel, too).
AI does a LOUSY job of parsing out that stuff, to the detriment of all who rely upon AI engines to augment their understanding of the world. Furthermore, the AI agents controlled by the very platforms that have done so little to prevent the dissemination of propaganda and false narratives are hardly likely to do anything but skew search results (in favour of their respective "owners" preferences).
The problem with the Trudeau's government approach to news and the internet wasn't small or something to have "reservations" about. At no point in their rambling, incoherent series of bills were they even close to anything that could be considered a rational plan for the reality of the 21st century. Everyone in Canada was dumber for having listened to them. The LPC was awarded no points for their absolute abortion of a legislative plan, and may God have mercy on their souls.
To be even more blunt, they were living in fantasy land... quite similar to the British fantasy that if they just get the legislation right they'll be able to magically invent backdoors to encryption that can only be used by "good people" and never by "bad guys".
The internet and technology just doesn't work in a free society in such a way that the LPC fantasy of the internet is plausible any more than the fantasy of "internet voting" for elections is plausible.
To some extent this seems like a collection action problem. AI will give better answers if it has good news sources, but no AI company has an individual incentive to pay for those better sources. Any company that does is helping the competition give better answers.
Given those incentives, why would any AI company fund the news?
There's also the problem that AI companies only need to give answers we accept which isn't the same as correct. When there are rapid real problems for misleading answers, the AI companies are incentivized to not do that... but if the misleading answers are just about Hamas, Russia, TikTok or the consequences of tariffs... bad answers don't really harm AI companies... not in the same way as providing the wrong answer to "where is the nearest coffee shop to me right now that also serves chocolate chip cookies".
Get the first one wrong and the customer doesn't know they're misinformed and they keep using the AI.. Get the second one wrong and they're pissed off they didn't get their cookie and they might switch to a different AI.
I still don't see a solution for news... if you want good news, you're going to have to pay for it. But if too few people are willing, we simple won't get it.
Andrew, you write in part "... if you want good news, you're going to have to pay for it ..."
I submit that the absolute original model of newspapers, i.e. in the 1800s, was actually doing that very thing. In other words, there was not an advertising industry as we today know it so subscription revenue was very important.
My point is that the news gatherers will simply have to educate the public that they need to pay. That also means that the news gathering industry will shrink even further.
Internet search killed advertising, which was the primary source of revenue for journalism. Except for a small number of generally smaller publications, subscriptions never paid the bills. The business model died, and that was that.
All the other commentary about what killed the media is just arguing about bad management in the buggy whip industry. It wasn’t the woke, or the private equity, or Trudeau, and it won’t be AI either - regardless of the details of any of those things. Once the business model died, none of that mattered anymore.
This is basically true, but as a guy who had to live with the (later stage) process as it happened, and then certainly with the aftermath, I just want to add to Michael's post here. Classified revenue was also massive. The internet killed that, too. But the death of advertising and specifically of classified section advertising were different things, killed by different parts of the internet and in different ways. Losing one of them might have been sustainable. Losing both was catastrophic.
I recall one of your podcast you and Jen discussed this and it sure made sense. I remember the size of the classifieds pre craigslist explosion. 10 pages of jobs, 30 pages of used cars, another section on apartment rentals, you name it. No business can survive losing that kind of revenue. Now its mostly half a dozen obituaries and some scraps. If a major Canadian paper even makes 1000 bucks a month from classifieds I would be shocked.
As Andrew Gorman notes, Jen has made essentially the same points.
Put differently, the buggy whip industry (i.e. the media) had unresponsive and bad management and the other things attached to the corpse of that industry and made it worse. Yes, you can argue woke didn't help and, yes, you can argue that private equity is harvesting cash from the corpse and, yes, Trudeau really made the corpse much more unworthy of saving but the corpse had already died. Quite a lot of metaphors there which only prove that I don't deserve to be a published journo.
I mean, I agree entirely - there is lots to criticize about the media. All of that is entirely fair, and the conversation is worthwhile because even in its diminished state the media is important. But fundamentally the media died because its business model was as destroyed. And IMO it’s a lot of special pleading - “the thing I don’t like is the real problem” - which is just not true.
Careful, such proclamations are basically blasphemous here.
Even if they're entirely true.
*blinks*
Not at all. Jen has made this exact point on the podcast. It's the loss of advertising that is at the root of it all.
Only a 15% cut to the CBC?
Presumably after an increase of 150 million.
So, the net is .... no change.
Canadian news outlets care more about their bottom line than they do about the future of the information commons, and Canadian politicians care more about the fate of their parties than they do about the future of the country. Since the same impulse is at work in both spheres of concern, it's easy to recognize; less easy to understand is how it came to be considered responsible and ethical. Far-sighted our business and political leaders are not, nor do nation-building or the public interest seem to be priorities for them.
Mark you write that "Canadian news outlets care more about their bottom line than they do about the future ..."
So .... do you argue that the newsies should ignore the bottom line? If so, perhaps the staff at those outlets should be willing to work for, oh, say, half of what they now earn? My point is that unless there is a bottom line that is positive there can be no entity that survives.
Oh, unless the government takes it all over.
Ug!
I expressed myself incompletely. Nothing gets done in a capitalist society unless someone benefits from it financially, but there's still a difference between limiting one's concern to what generates income only this week and what's compatible with generating it ten years from now. Responsible people realize our lives stretch through time, and that 2035 will be the child of 2025 and every bit as real.
Whether one exploits the present in ways likelier to encourage innovation and growth or turn the future into a wasteland shouldn't be an issue for anyone. When I say our priorities are ethically askew, you should understand this to mean that prioritizing 2025's bottom line over 2035's isn't just irresponsibly short-sighted but entirely arbitrary. Since your quality of life (which is very much dependent on the state of the information commons) is going to be just as important to you tomorrow as it is today, it follows that visionary leadership is as much in your long-term interest as in everybody else's.
[P.S. The purpose served by 'newsies,' as you call them, is information diffusion, just as the purpose once served by buggy-makers was transportation. Forcing internet businesses to subsidize traditional newspapers would be as perverse as forcing the first automobile manufacturers to subsidize buggy-makers. Presumably, some of the unemployed buggy-makers ended up with better-paying jobs on the engine line at Ford, and Globe and Mail staff are going to figure things out too. The world isn't about to run out of tasks needing the attention of competent people.]
Great overview of upcoming trends.
One of the characteristics I’ve noted with Canadian media is their universal practice of cherry picking news items to support or at least not challenge the world view of those who pay them. So under Trudeau the payers via subsidies became the Liberal Party under color of the Canadian Government.
Agree wholeheartedly AI is extremely useful
In eliminating the need to search multiple sources to get a balanced picture or information set, and that as a result we won’t need as many news collection/presentation sites as in the past, and the demise of many current news presenting organizations. What I see totalitarian government doing now is trying to maintain their current control over public information by either banning AI or forcing content inclusion and exclusion rules on AI algorithms. It will be quite entertaining to see how they try to do this.
The efforts by legacy news media and the government to protect their business seems a lot like building a moat on a sandy beach to catch the receding tide. You might trap some water for a time, but it's still going to seep into the sand or evaporate. I think there's still a market for news, but it's extremely hard to change the culture and structure of a legacy organization created for a different time and technology.
The closest analogue I can think of are how legacy airlines have painfully adapted after industry deregulation: it took decades and several bankruptcies, strikes, mergers, bailouts, and massive layoffs to get the handful of survivors restructured into a sustainable business. However, the fundamental way airlines transported people didn't change: their business is still selling tickets and flying people from one point to another. It's not like somebody invented a Star Trek-style transporter device and the airlines had to reinvent themselves as transporter service providers, which frankly is more like what happened to newspapers, radio, and television.
I've often enjoyed what Peter Menzies has written in the past. However, in this case, I believe that his op-ed fails because of its flawed logic--and his inability to resist the temptation of "click bait" references to Trudeau.
Yes, I understand that many readers of "The Line" are committed Trudeau-phobes. And, yes, I also had reservations about his policies (particularly his government's fundamental failure to take defence and foreign policy seriously).
Nonetheless, in this instance what Mr Menzies has written (about the Trudeau government's perceived failings in respect to the regulation of online discourse) needs more work.
I do not claim that what Trudeau's government rolled out when it passed the Online New Act was "pristine and perfect" legislation. Far from it. The subsidies to news organizations in particular need to be subjected to more scrutiny.
Where Mr Menzies fell down, in my view, was in his failure to properly address the oligopolistic behaviour of the Big Tech companies WRT advertising and other online services. It's pretty widely understood that the big companies (Amazon, Meta, Google and the like) all indulge in "cajoling" (bullying) of clients and advertisers designed to ensure their control of the respective sectors in which they dominate.
I do agree that the Online News Act has not helped address that issue (which begs a few questions about the collusion between well-connected former members of the Liberal Party and the big corporates in the online world).
I also believe, however, that more skepticism of the big online companies is in order.
WRT to the relationship between search results collated by various AI tools and the health of the online information universe, let's face it.
The ease with which political actors (particularly those who like peddle extremist ideas) can game the system by making their information appear to be of the same quality as top-notch news organizations is a BIG problem.
Another BIG problem is the deliberate dissemination of false or deeply flawed information by state actors (think the PRC, Russia, Modi's India and other arguably rogue states--and yes, Trump's America and Netanyahu's Israel, too).
AI does a LOUSY job of parsing out that stuff, to the detriment of all who rely upon AI engines to augment their understanding of the world. Furthermore, the AI agents controlled by the very platforms that have done so little to prevent the dissemination of propaganda and false narratives are hardly likely to do anything but skew search results (in favour of their respective "owners" preferences).
The problem with the Trudeau's government approach to news and the internet wasn't small or something to have "reservations" about. At no point in their rambling, incoherent series of bills were they even close to anything that could be considered a rational plan for the reality of the 21st century. Everyone in Canada was dumber for having listened to them. The LPC was awarded no points for their absolute abortion of a legislative plan, and may God have mercy on their souls.
To be even more blunt, they were living in fantasy land... quite similar to the British fantasy that if they just get the legislation right they'll be able to magically invent backdoors to encryption that can only be used by "good people" and never by "bad guys".
The internet and technology just doesn't work in a free society in such a way that the LPC fantasy of the internet is plausible any more than the fantasy of "internet voting" for elections is plausible.
Thank you. A thoughtful response to Mr Menzies’ article.
For clarity’s sake. The word “Trudeau” appears once in the text of the commentary.
What are your feelings about Ground News? Looks extraordinary to me as a news search site.
To some extent this seems like a collection action problem. AI will give better answers if it has good news sources, but no AI company has an individual incentive to pay for those better sources. Any company that does is helping the competition give better answers.
Given those incentives, why would any AI company fund the news?
There's also the problem that AI companies only need to give answers we accept which isn't the same as correct. When there are rapid real problems for misleading answers, the AI companies are incentivized to not do that... but if the misleading answers are just about Hamas, Russia, TikTok or the consequences of tariffs... bad answers don't really harm AI companies... not in the same way as providing the wrong answer to "where is the nearest coffee shop to me right now that also serves chocolate chip cookies".
Get the first one wrong and the customer doesn't know they're misinformed and they keep using the AI.. Get the second one wrong and they're pissed off they didn't get their cookie and they might switch to a different AI.
I still don't see a solution for news... if you want good news, you're going to have to pay for it. But if too few people are willing, we simple won't get it.
Andrew, you write in part "... if you want good news, you're going to have to pay for it ..."
I submit that the absolute original model of newspapers, i.e. in the 1800s, was actually doing that very thing. In other words, there was not an advertising industry as we today know it so subscription revenue was very important.
My point is that the news gatherers will simply have to educate the public that they need to pay. That also means that the news gathering industry will shrink even further.