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Mediamorphis

Part I: The growth of the network media economy, 1984-2010 Add to ...

Amidst all the interest-driven media and Internet policy discussions boiling away today, and as scribblers everywhere anticipate the end of television, newspaper, music or book industries, there’s something is missing: evidence.

The CRTC produces reams of tables and charts; enough to boggle the mind, in fact. However, its reporting is inconsistent from year-to-year and sometimes seems designed to distract attention from unpleasant truths that might cast the regulator, media industries or Canada in a bad light. The CRTC compounds the problems by discarding data that is more than eight years old.

To address these gaps, I have been compiling data that now covers a dozen media sectors between 1984 and 2010: e.g. wired and wireless telecoms, Internet access, cable, satellite & online video distributors, broadcast television, pay television, newspapers, radio, magazines, music, Internet advertising, search engines, and social network sites. The 2010 data is now in.

My aim is to create a systematic and coherent body of evidence where currently there is none. Over this and my next two columns, I will draw on this data to address questions about whether the media economy and specific elements in it have grown, stagnated or declined over time, and to see how all of the bits and pieces of the media universe fit together. I will also use it to assess whether the media industries have become more concentrated over time, or less.

Canada has a large media economy. While often cast as a pygmy relative to the colossal size of the U.S. media market, the Canadian media economy is actually the eighth largest on the planet ( see here).

The steady emergence of new media services over time has created a network media economy that has tripled in size over the past 26 years. In fact, between 1984 and 2010, the total media economy, including telecoms services (wired and wireless) grew enormously from $19.7-billion in 1984 to $56.1-billion in 2000 and to $68.7-billion in 2010 (in inflation adjusted real dollars).



Of course, there are exceptions. Standard home phone is one, with revenue falling by a third from 2000. This, however, has been more than offset by gains from wireless and Internet access. Altogether, revenue on the connectivity side of the media (home phone, wireless and Internet access) increased greatly from $25.9-billion in 1984, to $35.3-billion in 2000 to just under $42-billion last year.

Setting aside telecom services because their sheer size dwarfs everything else in order to focus on Internet-centric and traditional media services reveals similar trends. Indeed, these 10 sectors grew impressively from $12.1-billion in 1984, to $23-billion in 2000, to $33.8-billion last year (in real dollars).





1984

1988

1992

1996

2000

2004

2008

2010



Internet Access







312

2195

4673

6365

6800



Cable/Sat

1380

2041

2288

3497

5145

5607

7139

8100



TV

3580

3574

3999

4272

5000

5837

6776

6848



Radio

1622

1651

1524

1492

1643

1763

2053

1910



Newspapers

4219

4803

3858

4324

5731

5600

5544

4300



Magazines

1369

1272

1401

1362

1585

2055

2458

2202



Internet Advertising









134

406

1643

2200



Music









1548

1574

1399

1410



Total

12170

13341

13070

15260

22980

27515

33377

33769







The Internet has added enormously to the size of the network media economy. Revenue for Internet access rose from $239-million in 1996 to $6.8-billion last year, while online advertising grew from zero to $2.2-billion over the same time. It is commonplace to hear that television, music, newspaper and books have been hit hard by the rise of the Internet, but the table above suggests otherwise.

Conventional television revenues did slip from a high of $3.6-billion four years ago to $3.4-billion last year. Pay and specialty television revenue, in contrast, doubled in the last 10 years to $3.5-billion (including the CBC’s annual subsidy).

Add to this cable, satellite and other online video distributors and the total television universe doubled between 1984 and 2000, and then grew by half again to $15-billion last year. Television, in short, remains at the heart of the digital media universe, instead of serving as exhibit A for an old medium imperilled by the new.

Netflix will take in an estimated $96-million this year in revenue – 0.6 per cent of total television income. That’s nice if you can get it, but a drop in the bucket and hardly worth revamping the rules for, as many entrenched interests would like the CRTC to do.

Growth, nonetheless, has stagnated since the economic downturn caused by the 2008 global financial crisis. However, historically the fortunes of the media economy have always hinged on the state of the economy, as the data above shows with respect to the comparatively mild recession in the early 1990s.

The impact of the current economic downturn varies by media, with revenue for some rising substantially (wireless, cable and satellite television and online video distributors, Internet access, Internet advertising) or falling slightly (magazines, radio, music). One can also argue that the modest declines in magazine (7.8 per cent), music (5.7 per cent) and radio (4.7 per cent) since 2008 can be turned around simply by changing our measure from inflation-adjusted dollars to current dollars given that the need to discount for inflation is not self-evident when digitization means that many costs of production in these industries are falling rather than rising.

Newspapers have been hit hard. Despite declining circulation and readership since the late-1950s, newspaper revenue reached an all-time high only in 2000, where they hovered until 2006, before dropping. While not nearly as severe as trends in Britain and the U.S., where advertising revenue have plunged around 40 per cent since 2003-4, it did tip an overly indebted Canwest into bankruptcy and has cast a pall over the prospects of its successor company, Post Media.

While there are supposedly 94 dailies across the country, by my tally only a third of them publish original daily content. Some dailies have cut their weekly schedules to five or six days, while many small- to mid-size papers publish just one or two days a week, albeit refreshed constantly with material from regional content factories that now drive newspaper chains coast-to-coast.

This is significant because newspapers pack more journalistic wallop than any other medium and are the content factories for news across the media as a whole. So there is good reason for concern.

The news is not all bleak, though, with a slight rise in advertising revenue and readership in 2010. The trend has been especially notable as younger readers turn in greater numbers to getting news online via social network sites such as Facebook.

Ultimately, the media economy has grown substantially. There is little evidence that the Internet, falling advertising, changing audiences, or even the Great Recession have laid waste to core elements of the media universe, traditional or new.

Next column: have the network media industries become more or less concentrated over time?

Dwayne Winseck is a communications professor at the School of Journalism and Communication, Carleton University in Ottawa. Prof. Winseck been researching and writing about media, telecoms and the Internet in one way or another for nearly 20 years. He most recently edited The Political Economies of Media . You can read more comment on his blog, Mediamorphis . His column will appear every second Tuesday.

 

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