Education is ideally civil defense against media fall-out. Yet Western man has had, so far, no education or equipment for meeting any of the new media on their own terms. Literate man is not only numb and vague in the presence of film or photo, but he intensifies his ineptness by a defensive arrogance and condescension to “pop kulch” and “mass entertainment.” It was in this spirit of bulldog opacity that the scholastic philosophers failed to meet the challenge of the printed book in the sixteenth century. The vested interests of acquired knowledge and conventional wisdom have always been by-passed and engulfed by new media. The study of this process, however, whether for the purpose of fixity or of change, has scarcely begun.
— Marshall McLuhan, Understanding Media: The Extensions of Man, 1964
When the Winnipeg Free Press‘ long-reigning publisher Bob Cox was ready to announce his retirement four years ago, it was only fitting that veteran Free Press business reporter Martin Cash got the scoop.
In the story he then filed, Cash would gush about Cox’s “singular career in journalism” — a career that started in the Free Press’ newsroom, no less, where Cox had worked as a beat reporter from 1984–88. He then spent a decade filing wire stories for The Canadian Press, followed by “brief gigs as city editor of the Edmonton Journal and national editor of the Globe and Mail“. In 2005, he returned to the Winnipeg Free Press as an editor. Two years later, he was sitting behind the publisher’s desk.
That article also notes Cox’s seven-year tenure as Chair of News Media Canada (formerly Newspapers Canada), the main professional association and lobbying arm for the Canadian newspaper industry. “As chair of that organization,” Cash wrote, “[Cox] helped marshal in federal legislation that has produced millions of dollars in federal government support for journalism across the country”. What a legacy! What a career! There is more:
“Under Cox’s helm, the paper has not lost money, and while other papers slashed editorial budgets, the Free Press has not given up reporting on any part of Winnipeg.
“That, to me, is really important,” [Cox] said. “We have achieved many things that other newspaper companies haven’t.”
Cash’s write-up is a fittingly generous tribute to its author’s long-time boss, and perhaps even his friend. It is effusive in its praise, to the point of verging on hagiography. But this part was simply a fib; the newspaper had lost money, and quite a lot of it, as I aim to show here. You might consider what follows as my own humble request that the newspaper consider issuing a correction on this point.
Bob Cox was also once quite rude to my mother, over the telephone. Just the once. That isn’t why I set out to write the account which follows (although I’m sure it helped). It’s just something that I thought you ought to know about the man, and I couldn’t think of any better place in the narrative than here, now, to mention it.
But this is not a story of one man, one publisher of one local newspaper, way off on the northeastern periphery of the Great Plains. It is a story about how Canadians arrived in the blighted and narcotising digital Hellscape, of our own unique design and choosing, that you and I enjoy today. I fear it is a rather long story. Perhaps in recounting the events, we might hope to make better sense of them, or even work out some plan as to how we ought to proceed from here. I really couldn’t say. But that sounds like a thing worth trying, don’t you think?
Ancient History (or: Context)
Learning is not compulsory; it’s voluntary. Improvement is not compulsory; it’s voluntary. But to survive, we must learn.
— W. Edwards Deming, 1986 [as quoted by Frank Voehl in Deming The Way We Knew Him, 1995
Our story begins, conveniently, in more or less the same cultural moment that Matt Johnson’s film BlackBerry ends.
Figure 1: Quarterly operating revenues (left) and expenses (right) of FP Canadian Newspapers Limited Partnership (FPLP), Q1 2002–Q2 2007.
On 10 July 2008, for the first time ever, Apple’s third-party “App Store” goes live. The very next day, the company’s second-generation “iPhone 3G” becomes the first Apple smartphone sold in Canada, with Rogers as its exclusive mobile carrier, and the App Store pre-loaded on every device. Three months later, on 23 September, the “Android Market” (later rebranded as “Google Play”) went live too, in tandem with the release of Android 1.0. The week before that, Lehman Brothers filed for Chapter 11 bankruptcy protection, in what is now widely viewed as the climax of the 2008 financial crisis. And six months later, Research in Motion (RIM) belatedly entered the fray with its own third-party app marketplace, “BlackBerry App World”, on 1 April 2009. April Fools’ Day.
By the second quarter of 2010, over one-third of all smartphones sold in the United States were reportedly Android devices. RIM’s line of BlackBerry smartphones still held a 28 per cent market share, while Apple’s line of iPhones rounded out the top three with 22 per cent. Shortly after, RIM would be knocked out of the top spot in its home market of Canada too, selling 2.08 million BlackBerry phones there in 2011 compared to 2.85 million iPhones sold.
But if 2011 was yet another busy year in the mobile wars (and yes, yes it was), then it was doubly so for the world of journalism — or rather, news publishing. In March of that year, you see, The New York Times announced that they were moving to a “metered paywall” model, becoming one of the first major North American news-dailies to do so.
Several other publishers would soon follow the Times‘ suit, including the Winnipeg Free Press, which introduced its first metered paywall (for international users only) in December 2011. Under this model, access to winnipegfreepress.com would remain free and unlimited for users within Canada, but those connecting from outside of the country could now only read up to ten “free” articles per month, before being asked to pay $6.95CAD per month (or $69.95CAD per year) for additional access.
A few months earlier, in May 2011, the Free Press had also launched its first-ever mobile application for iPhone, iPad, and Blackberry devices. This “FP News” app was the product of a partnership with Spreed Inc., a Toronto-based developer of speed-reading apps — oh, I get it! — which had recently built The Globe and Mail‘s first-ever mobile app, too (though the latter partnership had soured already).
Both of these early “digital” initiatives at the paper were steered by Sandra Kukreja, the Winnipeg Free Press‘ first-ever “VP of Digital Media” as of January 2011. A recent U.K. expat, Kukreja had joined the Freep four years prior, as Director of National Sales. She was ostensibly recruited by then-publisher Andrew Richie, who also hailed from London media circles… but Richie abruptly left the Free Press in the same month Kukreja started, and Bob Cox was named as his interim (and soon after, permanent) successor. Cox would be the local daily’s third publisher in as many years.
Also assisting Kukreja throughout this era was a fellow by the name of Christian Panson, the newspaper’s “Director, Digital Product Development”. Panson had started at the Free Press just a few months prior to Kukreja, but as “Manager, Technology and Business Improvements”. He was promoted to a director-level role in late 2010, about a month before Kukreja’s promotion to vice-president.
Other early Free Press “digital” ventures included the addition of interactive digital flyers to its online edition in November 2011 (powered by Toronto-based Flipp), and a months-long experiment, beginning in September 2013, with publishing “augmented reality” (AR) content alongside each daily print edition (powered by U.K.-based Blippar).
By that time, “[a]n informal J-Source survey of 95 dailies found that about 80 per cent of the newspapers in Canada charge readers for online content, or plan to do so very soon”. The journalist behind that survey, Kelly Toughill, noted that while Canada’s English-language newspapers had embraced “paywall” models at a more rapid pace than their counterparts in the United States or Europe, this was by no means a universal rule:
Independent newspapers and small chains are moving more cautiously into the digital subscription business. A paywall is “very imminent” at the privately owned Halifax Chronicle Herald, according to vice-president Ian Scott, but there are still no plans to charge at the Winnipeg Free Press. The Chronicle Journal in Thunder Bay, Ont., also lacks a paywall.
“Sometimes you wonder why you are standing out in a crowd,” said Winnipeg Free Press publisher Bob Cox when asked about his paper’s lack of paywall. “But one of the luxuries we have is that we don’t have to follow any corporate digital initiative… [Controlling shareholder] Ron Stern believes we should preserve print as long as possible.”
Cox said his team continues to discuss erecting a paywall for domestic readers but isn’t convinced the restricted site could compete with a strong local CBC website.
Incidentally — and indirectly — Mr. Stern also held a controlling interest in the Alberta Newsprint Company of Whitecourt, Alberta. ANC is the primary (and for many years now, exclusive) newsprint supplier to FP Newspapers, whose titles include the Winnipeg Free Press, The Brandon Sun, The Carillon of Steinbach, and Canstar Community News. But I’m sure this is merely coincidence! Put it out of your head.
For our purposes, the year 2014 saw four key developments at the Winnipeg Free Press: in May, the paper’s “AR” partnership with Blippar won a prestigious industry award, for “Best New Mobile Service“, at the 84th Annual International News Media Association (INMA) World Congress. In June, Bob Cox was elected as the new Chair of the Canadian Newspaper Association (CNA). In July, Christian Panson would leave the newspaper to pursue a role as “Manager, CT Innovations” at Canadian Tire… but this would prove only a brief hiatus, and by September 2014, Panson had returned to a promotion and a new job title: “VP Digital Content and Audience Revenue”.
Going to the Wall
If we cannot recognize the stable state, it follows that we cannot learn to reach it—there is no reference point. If we cannot learn how to reach stability, we cannot devise adaptive strategies—because the learning machinery is missing. If we cannot adapt, we cannot evolve. Then the instability threatens to be like the wave’s instability—catastrophic.
I said before that there are solutions, but I have also shown that they concern organizational modes. They concern engineering with the variety of dynamic systems. By continuing to treat our societary institutions as entities, by thinking of their organizations as static trees, by treating their failures as aberrations—in these clouded perceptions of the unfolding facts we rob ourselves of the only solutions.
— Stafford Beer, Designing Freedom, 1973
It is at this point in time, roughly, that the Winnipeg Free Press‘ org-chart becomes regrettably murky — at least according to the relevant professional profiles. Kukreja would continue as “VP of Digital Media” until the end of 2015 (her LinkedIn profile claims that she exited in January 2016), whereas Panson claims to have held the very similar title of “VP Digital” as of November 2015. In 2017, Panson would be restyled once more as “VP Digital & Technology”, the title he maintains to this day.
Figure 2: Quarterly operating revenues (left) and expenses (right) of FP Canadian Newspapers Limited Partnership, Q3 2007–Q1 2015.
What is known — because he has spoken on the record about it — is that during this period, Panson did some back-of-the-envelope math, which then sent shockwaves through the entire leadership of the Winnipeg Free Press (and that of its parent company, FP Newspapers). As he would later recount to Marketing‘s Chris Powell in 2016:
For his exercise, Panson took the annual page views of the Free Press’ top 30 journalists, matched it with an appropriate CPM (around $6) and what he called an “optimistic” ad load of three units per page. The results were eye opening, and a little sobering.
When Panson ran the numbers, he discovered that the ad revenue generated by free ad-supported access would enable the Free Press to afford just two of its 30 journalists. While losses for the publications’ top 10 journalists were modest, the drop-off for the remainder of its leading reporters was dramatic.
Publications including La Presse and the Toronto Star have made big bets on free ad-supported access in recent months, but even a cursory examination of the numbers showed Panson that “free” would likely come at the cost of the 144-year-old title’s long-term viability.
“We knew that at the scale we were at, offering free was not going to do much for us in the future,” said Panson. “We needed to find a way to take our audience and optimize the monetization to a new level.”
Now, without wishing to get too bogged down in technical detail here, Panson’s figures were — and are — very silly. For one thing, they somewhat ignore the obvious fact that many of the most popular sections of most local news-dailies (whether published in print or online) are not attributed, nor are they attributable, to any one staff reporter. Consider wire stories; the police reports; real estate listings; obituaries; puzzles; so forth. What about photojournalists, for that matter? Should their work really be valued according to how often it has been seen? And should that same logic really apply to reporters, who are most often tasked by their editors with finding and covering stories within a discrete and pre-determined “beat“?
If you’ll permit the analogy, this was a bit like starting from the premise that “the purpose of a bird is to fly”, then killing and dissecting one for further study, “discovering” through this process that a bird’s wings are really its most aerodynamic parts, and discarding the rest — its beak, its feet, its brain and heart and lungs — as superfluous to that bird’s more essential purpose; curious gobs of ballast, but little else. And besides, the bird you chose to carve up was a penguin.
Secondly, I am fairly certain that anyone haggling over digital ad-rates with the Free Press at the time would have been thrilled to learn that its top executives considered a $6 CPM “appropriate” for their product. I feel equally confident that its sales teams were busily insisting that the true value of this ad-space was far greater. Indeed, one imagines there are many advertisers out there who would pay ten times that rate — happily — for the right ad impressions, placed in front of the right audiences. But hey, what would I know, right?
Well, for the 2013–14 publishing year I served as Business Manager to The Uniter, one of the few autonomous campus newspapers in Canada, based out of the University of Winnipeg. There, I developed that paper’s first-ever digital ad-sales model, which was soon propagated to, and iterated upon by, other campus papers nationally. I resigned from that role in protest after Winnipeg’s then-Mayor Sam Katz sued us for defamation, and our managing Board made a belated decision to settle the case (an obvious SLAPP suit) rather than allow it to go to trial.
I bounced around (and out of) media sales after that, culminating with an eighteen-month stint as the first “Digital Sales Specialist” at Metro News Winnipeg. During my tenure, our local office would consistently book more digital ad revenues than any other Metro edition outside of Toronto… but that all ended with the Torstar–Postmedia “newspaper swap” of November 2017. The Competition Bureau would launch an investigation into that one, and even raided the offices of both publishers, but in the end, nothing came of it. That was my last bounce in publishing. Ever since then — going on eight years, now — I have made my living as a programmatic digital media buyer (mainly via Google Ads and Meta Ads), for ad agencies in Winnipeg, Vancouver, and Toronto. So yes, I feel entitled to share some public opinions on the subject.
Latent silliness notwithstanding, Panson’s figures must surely have sent a chill through the room whenever he shared them with Bob Cox, the Winnipeg Free Press‘ now-veteran publisher. The Freep has long prided itself as being (and somewhat bitter-sweetly, remaining) one of the last few “independent” local newsrooms in the country. But here was his own head of digital, telling him — in no uncertain terms — that his newspaper’s entire digital publishing model was fundamentally broken. Something needed to be done. And so, over several weeks and months, something was.
In his year-end message to readers, Free Press editor Paul Samyn hinted at big changes to come in 2015:
What we are building for our online readership is the kind of experience that will transfer that individual sense of ownership from our print product to what we deliver on desktops, smartphones and tablets. In other words, we are reimagining what a news website should be with an eye to enabling you to tailor what you read and how you read it.
For example, if you are a fan of the Winnipeg Jets, provincial politics, the local arts scene and Brad Oswald’s TV picks, then the winnipegfreepress.com you point and click to will reflect those reading tendencies. Similarly, if you are big into crime stories, the Blue Bombers, pop culture and relationship advice from Miss Lonelyhearts, that’s what will greet you on your screen.
Better still, we’ll send you recommendations based on what you’ve read in the past. We will allow you to set aside articles to read later, say for that bus ride or evening on the couch. And if you want to broaden your horizons by taking cues from what others are reading, we will give you those insights as well.
It’s fair to say what we are getting ready to unveil is among the most ambitious projects in our 142-year history. We honestly believe it will be groundbreaking because it will put you, the reader, at the centre of what we deliver from our website.
[…]
My resolution for 2015 is to have our online readership start to talk about their relationship to the Free Press the same way our print readers talk about their newspaper.We’ve always taken pride in delivering the news that matters to you. By putting you at the centre of winnipegfreepress.com in 2015, we want to deliver a new product you will be proud to call your own.
But the newspaper’s true ambition extended well beyond adding a few new “personalisation” features, or the ability to send out push notifications. On 20 March 2015, another Samyn editorial appears, headlined “Free Press rolling out new digital platform“:
If you are already a home subscriber or subscribe to our e-edition, the change will be pretty much seamless. You already enjoy full access to everything we publish in print and online, and your all-access pass will continue on all our platforms.
But for those who don’t have a subscriber relationship with theFree Press, you are going to have two options. First off, there will be a [subscription] package that gives you the same all-you-can-read access — plus, we’ll throw in a free Saturday paper delivered to your home. But our second option is one that breaks new ground in Canada, by charging you only for what you have read and requires no minimum purchases or any prepayments. Even better, we will be offering you a money-back guarantee if you don’t like what you paid to read.
In other words, you won’t have to become a subscriber to consume our content; you will be able to dine à la carte in much the same way iTunes allows you to buy what you want, when you want.
One week later, the new price-tag under this “iTunes-for-news” model was revealed through a third Samyn editorial:
While we are offering an all-access digital pass for $16.99 per month that includes an optional free copy of Saturday’s paper, we recognized we also had to offer something different that reflects the realities of online purchasing practices. In other words, why pay to read the contents of the entire website when all you want to read is what you want to read?
And that’s why we are introducing a pick-and-pay model, priced at 27 cents per story, that is a first for news websites in North America. Once you’ve logged in, you can read as much or as little as you like based on what you want to spend. A walleting system will track each 27-cent purchase, and at the end of the month, your credit card will be charged.
[…]
In setting the price-per-read at 27 cents we were looking for a number that wasn’t too high or too low. We settled on two bits plus two cents as the Goldilocks pricing point we hope will be just right.But there is also some analysis to back up that price point as a huge swath of casual readers to our website tend to dine on an average of 15 articles per month. Under our new pick-and-pay system, reading 15 articles works out to only $4.05 a month, an amount we figure will compare favourably to other options from competing paid websites.
If I could interject — this $0.27-per-article price point became a part of the “hook” to several popular press articles written at the time about the Winnipeg Free Press‘ bold experiment with a “micropayment” model; comparisons to Blendle, a Dutch media start-up, were also plentiful. This was somewhat by design: while a frequently-asked-questions page for Winnipeg Free Press readers has long maintained that “in the end this is the lowest we think we can charge for our articles while still being fair to those that create them”, we should also note something that Christian Panson once told an industry crowd back in 2018:
We had a target of at least ten thousand people who were reading too much content to go with $0.27 — in other words, would subscribe instead. Originally we came up with $0.31, so we decided to go just a little under $0.30. Also, an off, quirky number like 27, instead of $0.25 or $0.30, is interesting and catches attention.
In other other words, this new (and still-current) standard price for one standard unit of standard Winnipeg Free Press reportage was pulled directly out of some publishing executive’s standard arsehole. The paper simply believed that it had some 10,000 existing readers who “consumed” 55 articles per month (or more), and these “heavy” website users were now expected to become paying subscribers. What’s the big problem? What, you can’t afford it?
But I digress. Samyn continued:
We recognize some of those competing news websites allow 10 free views per month before you hit their paywall. But what good is a news portal if, after reading 10 stories, you then have to lock in a subscription or wait until the beginning of the next month when you are no longer blocked from reading?
Hi, me again — the “good” that Paul was just asking about is, I believe, a public one. You see, I am one of those unfashionable sorts of people who still cling to the view that it is preferable for our public to have more access to credible news reportage, rather than less. So to my mind, ten free articles per month are infinitely preferable to none free articles, ever.
By the end of March 2015, the Free Press had published its brand-new mobile app (for iOS devices only), “as our previous development partner [Spreed] has ceased operating”. Days later, in response to criticisms of his paper’s adoption of a paid-access-only model, Bob Cox would pen an op-ed of his own, in which he both asks and answers the question “Why pay for the Free Press? Because good journalism doesn’t come cheap“:
Advertising revenues are an important part of our business model at the Free Press, but we have always needed readers to contribute as well.
The digital world is no different. Advertising alone cannot pay the bills. Many of the web’s most popular sites are, in fact, still operating on venture capital in the hopes of getting enough visitors to make a profit eventually.
We provide a specialized service – news and information about Winnipeg and Manitoba – that will never attract the hundreds of millions of page views needed to build an advertising-supported revenue base of a substantial news organization.
So we are asking readers to pay online, starting later this month, as editor Paul Samyn has explained in recent articles.
Ask why and I’ll point you to the content that we publish every day.
Figure 3: FPLP‘s quarterly “Circulation” revenues, less the sum of all “Delivery / Distribution” and “Newsprint” expenses, Q1 2002–Present.
Or, as Christian Panson succinctly put it during a March 2016 webinar, for another industry audience:
We wanted to show people that what they got yesterday for free isn’t what they get free today.