Monday, May 28, 2012

Paul Godfrey's big public push on newspaper ownership

Today, the Globe gets a copy of this: "Paul Godfrey memo to staff." Long story short, Postmedia newspapers are having great difficulty financially. Precious advertising dollars are going to online competition and print media is feeling the effects. This is not a new development for print media, we've been hearing about it for years. We also recently heard about the Globe itself going through some difficulties this summer and their contemplation of a paywall.

What is new in Godfrey's publicity push is something he said last week that should grab the attention of Canadians:
But now, at a time when print advertising revenue is dropping, Canadian newspapers are competing with foreign websites for online advertising, Godfrey said. "Corporations like Google, corporations like Facebook, corporations like the Huffington Post and AOL have all come to Canada. They are getting — without providing the content — more than 50 per cent of all the advertising revenue going to the digital world," Godfrey said.
He suggested two possible solutions. "We should either remove the foreign-ownership rules that protected us 60 plus years ago and are not needed today. Or provide the same rules to Google, Facebook, the Huffington Post and others that if they're not controlled by Canadians the advertising that goes on there should not allowed to be deducted as a legitimate business expense."(emphasis added)
Godfrey will be lobbying the Heritage Department on his proposed solutions.

As things stand today, as noted in the report: "...if a newspaper or a chain falls into foreign ownership in Canada, the new owner has one year to ensure the majority owner is Canadian — otherwise those who advertise with that publication cannot deduct it as a business expense, which means "they're out of business." (Private companies must be 75 per cent Canadian-owned while it's 50.1 per cent for public ones.)"

Will the Harper government lift foreign-ownership rules for the newspaper bidness? With Postmedia and the Globe making such loud noises about financial hurt? Wouldn't that make for a radical change for Canada.

Just think of the possibilities.