Flick on WGN-TV, the ABC affiliate in Chicago, for a glimpse of the Canadian future. In the middle of the local newscast, up pops a Chicago Tribune reporter commenting on the story. He's sitting conveniently in a WGN studio located in the middle of the Tribune newsroom.
The Tribune reporter is not being paid for his comments on WGN, since both the newspaper and the television station are owned by The Tribune Group, one of the mighty U.S. media conglomerates. The reporter's twin responsibilities -- reporter for the newspaper and commentator for the television station -- are both considered part of his assignment.
The Tribune Group is widely considered to be at the cutting edge of today's media buzzword -- convergence. The company runs The Chicago Tribune, WGN-TV, WGN radio, it sends WGN-TV across the continent via satellite, operates an elaborate web site, owns the Chicago Cubs baseball team and, within the last year, has purchased other major papers, including The Los Angeles Times.
This is the kind of media grouping Canadian conglomerates BCE and CanWest Global have recently become in the search for the holy grail of more profits through this thing called convergence. Together they spent more than $6-billion to buy media assets -- CTV and The Globe and Mail for BCE; Southam newspapers, some magazines and half of the National Post for CanWest Global.
Part of what they bought was an idea for which there is, as yet, no business plan and no successful model in the United States. Convergence presumes that the Internet will increasingly become the pipeline down which information will flow to willing consumers. Newspapers across North America have rushed to build impressive web sites, such as The Globe's.
The Chicago Tribune, an early entrant in the web-site game, hired several hundred people and now boasts an impressive site. The Tribune just laid off, however, about 40 people from its web-site operation. The New York Times recently did likewise.
No newspaper is apparently making money from its web site. A recent survey may have underscored why: Viewers are declining for those banner advertisements that pop up on web sites. Papers, such as The New York Times, that began by charging people to gain access to the product via the web, gave up and now offer the main product for free. Convergence, then, cannot mean making money via web sites, at least not yet. So it must mean something else. But what?
The most obvious answer is cross promotion. The conglomerates can offer advertising packages across a range of outlets: television, newspapers, magazines, radio and Internet. They can promote their assets in other media they own: Witness daily Global television ads in Southam papers. Whether this packaging of advertising will pay the debts incurred to buy assets remains unclear.
Cross promotion also involves what the viewer sees on WGN -- using Tribune reporters to talk about the news. This dual use for journalists was what exercised the Canadian Radio-Television and Telecommunications Commission during recent hearings on licence renewals for our conglomerates. The CRTC, as usual, barked up the wrong tree because the dual use will happen by one means or another. Dual use may even increase the credibility of television news, a laudable objective by any standard.
Cross promotion by these means, however, will almost certainly not increase the conglomerates' revenues sufficiently to pay the interest on the debt incurred to purchase the newspaper and television assets. Instead, the assets themselves will be forced to earn higher revenues to pay those debts.
In that case, convergence must mean discovering a new information product for communication down the Internet, a product or form that is neither a newspaper web site (all of which are losing money) or television programs, which are widely available through cable.
This discovery, yet unmade, represents the putative pot of gold that lies at the other end of convergence's rainbow, because none of the other apparent justifications for convergence offers sufficient guarantees of additional money to justify the debts.
With so much money having been spent to secure the assets apparently necessary to make convergence work, but with so little money as yet being earned, the status quo will not last long if convergence, like a rainbow, continues to look more alluring from afar than up close. mail.ca