BC Business
A growing group of Canadian and international media are investing in subscription and membership models. Vancouver's Discourse Media is leading the pack with an ambitious crowd-financing campaign to take its investigative journalism national.
There’s no denying that Canada’s news media are in decline. With more than 70 per cent of Canadian digital advertising revenue now going to Facebook and Google, the business model that has long supported journalism is all but dead. To put the impact in a local context, a decade ago there were 36 daily newspapers in B.C.—now there are 13.
The perception that news media can’t make money was perpetuated by lobbying efforts during Heritage Minister Mélanie Joly’s recent review of cultural industries. Newspaper industry advocates argued for support to help “make the transition to digital,” saying that the models needed to finance journalism haven’t emerged.
But what the continuous death watch of the traditional newspaper disguises is a growing unmet demand for high-quality, trustworthy journalism—a significant opportunity. If there’s no money to be made in Canada, why are foreign players such as the New York Times, the BBC and the Guardian investing in growing their Canadian audiences? Why did the Athletic, one of the hottest news media startups in the U.S., expand to Canada so early in its development?
On November 9—after months of researching, listening, planning, seeking advice and making hard decisions—I stood in front of a packed room in Toronto to make an exciting announcement: we’re taking Discourse Media national with a $1-million equity investment campaign.
We’re taking Discourse to the next level because we believe its mission—to expand and improve public discourse—is more critical today, in the era of Donald Trump’s politics, than ever. We also see a significant business opportunity in this moment in time, and we think Discourse’s good news story is an early sign of the Canadian media industry’s turnaround.
The revenue models have emerged. Discourse has spent the past two years experimenting with and researching successful approaches in markets that are farther along the path of digital disruption. Look at how the Times has shifted away from advertising dominance by focusing on serving its audience, instead of chasing clicks. The Gray Lady now generates 57 per cent of its revenue from that audience—not advertisers.
Follow the stories of new digital startups in Europe, such as Spain’s El Español and Holland’s De Correspondent, which have built profitable and growing outlets based on audience membership revenue. Note how the Texas Tribune has weaned itself off heavy reliance on philanthropic dollars by developing a hugely popular events series.
This shift is only starting to happen here in Canada. The Globe and Mail‘s paywall is moving toward hyper-serving its core audience. Canadaland is growing by responding to a very specific gap in media coverage. The Athletic Canada has expanded its subscription base dramatically in only a few months.
All of these efforts have one thing in common: they’re focused on creating value for their end consumers, not chasing the page views and clicks that advertisers favour. They focus on deepening engagement with their audience rather than attracting as many eyeballs as possible.
These examples show how we in the news industry have been preoccupied with the wrong question: How can we fix this broken system? Instead, we need to ask: What do people need?
When Discourse began asking that question, the future of journalism started to look a lot brighter. Audience research is clear: Canadians want to be well informed, and they strongly believe that journalism can “keep the powerful honest.” Trust remains a barrier; much damage has been done with front-page political advertising and fake news, and digital upstarts have struggled to gain credibility. But we can solve these problems, and it’s worth it because there are large segments of the Canadian public whose information needs aren’t being met.
Why is now the right time to take Discourse national? First, the collapse of the ad-based business model has reached a tipping point—reinvention needs to happen now. Second, how we pay for the things we value online is changing; I can imagine a world in which paid news media subscriptions reach levels similar to Spotify (50 million) and Netflix (95 million) globally. Third, the so-called Trump bump—a rise in subscriptions resulting from increased value in journalism to respond to today’s politics—has accelerated the shift to serving audiences. We think the $115 million that Canadians already pay for digital news will grow to $345 million in a decade, as the digital sector matures and supply of media products increases.
I’m more hopeful about the future of journalism than I have been in my whole career. Media across Canada and around the globe are realigning to serve audiences instead of advertisers. A diverse ecosystem of many outlets serving specific needs of communities seems possible. The future of media will be people-powered—and profitable.
Erin Millar is editor-in-chief and CEO of Discourse Media, a Vancouver-based independent journalism company. Earlier this year, Discourse partnered with BCBusiness on “Breaking Tradition,” an investigative feature that showed why Kinder Morgan and other resource developers must win approval from entire First Nations communities before proceeding with megaprojects. To learn more about Discourse’s equity crowd financing on FrontFundr, click here.