Stimulated during the pandemic by an influx of readers and new revenues, the Quebec print media has been doing well for three years. The end of the health crisis has, however, signaled the end of recreation: the shift is not over towards more profitable and more sustainable models. But what are these models?
There is more than one answer to this question. The most obvious is that the large consortia and national chains have lost their luster. We met over the past week with the leaders of the main Montreal dailies (The duty, The Press, The Journal of Montreal) all pretty much said the same thing: vertical integration has had its day.
In 2023, we no longer generate the same profit margin by producing written information as ten years ago.
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The industry has meanwhile cleaned up its finances. The duty has been profitable for six of the eight years leading up to 2021. There is no indication that the trend has changed in 2022. The Press announced at the end of January a profit for the year 2022 valued at 11 million dollars. Despite rising paper costs that forced it to move the printing of some of its newspapers, Quebecor posted a profit of $600 million last year.
Postmedia’s announcement in late January of a new round of cuts to its own daily newspapers across Canada, including Montreal Gazette, resonated in all this like a discordant note. Just a pothole on the information highway, or is it the return of the difficult pre-pandemic years?
Postmedia declined to answer questions from Duty. Montreal businessman Mitch Garber does. The latter expressed, first in private with the leaders of Postmedia, then in public on Twitter, his interest in investing in the newspaper, which would ensure its survival.
Neither Postmedia nor its owner, a New Jersey hedge fund named Chatham Asset Management, has contacted him. “It’s possible that in New Jersey, we don’t have a feeling about the local situation at home,” said Mitch Garber at Duty. Cuts may lead to more short-term benefits, but it will hurt in the long run. We will reduce the circulation and lose advertisers, and therefore make less income, ”said the one who received many supports in his approach, including from the CAQ.
The problem with the Gazette, concludes Mitch Garber, is not the newspaper itself – the Montreal daily would even be profitable. Decisions being made in the United States and in Toronto, where Postmedia is based, unfortunately ignore the unique context in which Gazette is located.
Diversification
The importance of the proximity of the media to their readership is unanimous among their leaders. Yet business models diverge. At one end of the spectrum is Mo’s Diaryntrealintegrated, with The Journal of Quebec and other properties like log 24 hours, in Quebecor Media. And, at the other end, there is The Presswhich for the past five years has been a non-profit organization capable of issuing charitable receipts to its donors.
Between the two is The duty, a for-profit company that also has its own philanthropic strategy. Elsewhere in Quebec, the Coops de l’information bring together the regional dailies that were previously part of the same group as The Press.
The director of Duty, Brian Myles, speaks for his counterparts when he talks about the importance for media companies to diversify their sources of revenue. The Berri Street daily has, since the launch of its website in 1997, adopted a paid subscription model that contrasts with the free Internet adopted by competitors such as The Pressor even Radio-Canada (see other text).
“Traditional media will never be able to compete with Google’s and Facebook’s ability to segment digital audiences,” says the big boss of the Duty. We must not give up advertising, but it is not sustainable. I believe that a profitable medium is capable of demanding a contribution from its readers. »
Brian Myles adds that government and private contractors have a responsibility to better consider local media when allocating their advertising budget. “We are not asking for the abolition of placement on Google or Facebook, but buying advertising using public funds could be fairer to the national media. The Government of Quebec did this during the pandemic, and I believe that its message got through. »
Legislative lags behind
Brian Myles also considers certain laws that affect media activities to be obsolete. He cites the one on copyright. Free reproduction for educational purposes of newspaper articles by schools and other publishers has over time become too permissive. “It limits our ability to monetize our content,” he says.
Bill C-18 is another long-awaited piece of legislation that will also affect the operation of Canadian media. If adopted, this project will force Google, Facebook and the other digital giants nicknamed GAFA to pay royalties to local media.
With any luck, C-18 will stabilize the information market. Despite the grumbling from Google and Facebook, the Australian example – where a similar law has been in place for two years – tends to demonstrate that it is possible for the GAFAs to compensate the media for the dissemination they make of their content. .
This new inflow of money could make the tax credit on the wages of newsroom employees less vital, thinks the assistant editor and vice president of information of The Press, Francois Cardinal. It is unclear to this day whether the federal credit will become a permanent measure, as many media would like.
“For organizations that qualify, the measure should be permanent,” says François Cardinal. He qualifies: “We could ask ourselves again if it is justified regularly, and according to the evolution of the industry. Will, following successful negotiation with the GAFA after C-18, this still be necessary? »
Many things can still change in the years to come, warns François Cardinal. The Press, fully digital since 2018, believes that constant agility will sustain its financial success in recent years. “The word ‘sustainable’ does not mean that you have a horizon of 20 years ahead of you. The evolution is constant and rapid. Twenty years ago, we didn’t wonder what platform we would be on five years later. Today, we can rejoice when we are in the right place at the right time with the right business model. »
The same reflection also bothers the CEO of Quebecor, Pierre Karl Péladeau. His father, Pierre Péladeau, founded The Journal of Montreal. When The duty asks him what future he sees for everyday life, emotion comes to the surface. “My dad started that diary…so it’s going to lead to some tough questions.” I might buy it personally, I don’t know. »
Pierre Karl Péladeau is careful not to play the “futurologist”, as he says, but his repartee remains eloquent: the written press may have emerged from the crisis, but the way in which information is produced and consumed has not ended to change.