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Magazine Publishing

Contents

1. Introduction:2. Culturally Strong and Financially Fragile3. The State of Canadian Magazines4. Policy History5. Challenges

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1. IntroductionThe first Canadian medium

- First truly national forum in Canada - Newspapers were local

- Early Canadian magazines- Saturday Night (1887)- Maclean’s (1905) - Canadian Forum (1920)- Chatelaine (1925)

- From a general interest to niche- 100+ new Canadian titles in 2004- 2300 different titles (half consumer and half

professional)- “There is a magazine for every passion and a

passion for every magazine” (CMPA)

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Think Break – Questions

Can you name three magazines you read?

Can you name three Canadianmagazines you read?

Are magazines in Canada a cultural success?

Are magazines in Canada an economic success?

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Saturday Night magazine suspended

TORONTO, Oct. 20 /CNW/ - St. Joseph Media announced today that it will suspend publication of Saturday Night magazine after the upcoming Winter issue (to be distributed in the National Post on November 26, 2005). Established in 1887, Saturday Night has featured many of Canada's most renowned writers, poets, and artists. St. Joseph Media (formerly Multi-Vision Publishing) purchased the title from CanWest Global Communications in November 2001. The magazine won two gold and three silver awards

The Canadian Forum: alive or dead? by Robert Fulford(The National Post, April 17, 2001)

For The Canadian Forum, the oldest political magazine in Canada, the first half of 2000 was a painful time… The July-August issue, with a tribute to the late Al Purdy featured on the cover, was the last one printed. The Forum has now been absent from newsstands for seven months. About 4,000 subscribers await the next issue.

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November 21, 2005A spectacular Maclean's 100thFROM THE EDITORS

To celebrate its centennial, Maclean's hosted a black-tie gala at the Toronto Centre for the Arts on Nov. 15, a day after the redesigned magazine hit newsstands. "I had very high expectations," said Seamus O'Regan from Canada AM about the revamped publication, "and I think they're off to a great start."

Under glittering chandeliers, 500 guests -- among them many of Canada's most fascinating individuals, a number of whom have graced the pages of Maclean's -- gathered for dinner and a show produced by impresario Garth Drabinsky. Amid the sea of linen-swathed tables and red amaryllis bouquets were notables including Kim Cattrall, Gordon Lightfoot, Belinda Stronach, Dr. Henry Morgentaler, Marc Cardinal Ouellet, and author Margaret MacMillan. They took in performances by such Canadian stars as fiddler Natalie MacMaster and vocalists Brent Carver, Patricia O'Callaghan and Colm Wilkinson.

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2. Culturally Strong and Financially Fragile

- Culturally Strong (Relatively good “CanCon”) - 777 million circulation- 90% of Canadians read a Canadian magazine- 70% of all subscriptions Canadian- 40% of all magazine sales are Canadian (2004)- 77% say they prefer Canadian Magazines to American

- But…- U.S. magazines make up 80% of all newsstand sales

- 60% of the industry is Canadian- Split runs cheaper – legally sanctioned- Government dependence for (some) production and distribution

- And the subsidies are not stable- Highly dependent on strong magazine advertising market

- Internet vulnerability- Economic downturns

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3. The State of Canadian MagazinesMid-sized

(~$1.6B, 1600 publishers, 9500 employees, 5000 freelance writers/editors/photographers, 2300 titles)

High levels of Canadian Ownership (99% of magazines published are Canadian controlled)

Moderately Profitable (~10% overall; but at least a third aren’t profitable)

Low/variable levels of Canadian government support(Regulation ruled illegal)

High levels of Canadian content (80% Canadian content; 40% of readership)

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Canadian versus Foreign Media Consumption (CPMA, 2004)

12Foreign Trade $220K

Trade $180K

Children's $40K

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Canadian versus Foreign Media Consumption (CPMA, 2004)

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Profitability

10%+ Overall

But only 60% per cent of publishers make a profit

“Revenues per magazine rose from $591,500 in 1993 to $625,800 in 1998 and reached $651,800 in 2003.

At the same time, the profit per magazine rose from about $29,600 in 1993 to $64,000 in 1998. It remained virtually steady at this level in 2003. Technological advancements in printing processes have resulted in lower production costs per copy and have also contributed to the influx of new titles.

During the 10-year period, the number of titles of consumer magazines in particular, both general and special interest, increased 62%. This growth has resulted in a dispersal of audience and lower revenue per title.

A number of magazines that survived the early 1990s have since experienced an improvement in revenues and profit margin. The disappearance of unprofitable magazines also accounted for some of the increase in overall profitability.”

(StatsCan The Daily June 8, 2005)

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Think Break – Questions

What are the key mechanisms for support and how do they apply to magazine publishing?

-Direct Subsidy-Indirect Subsidy-Government regulation

-ownership-content

-Etc.

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4. Policy History

a. Early Daysb. 1950’sc. 1960’sd. 1970’se. 1980’sf. 1990’sg. New Millennium

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Early Days – Our first national media- Canada had a strong newspaper sector

- Locally based; but unlike British – no nationals - First magazines were THE national voice

- 1931: Import duty on US magazines- With more than 20% of revenue from ads - R.B. Bennet – one year before CRBC)- 1935: removed by Liberals under Mackenzie King

- Significance: - Direct: limits on consumer choice- Indirect: Building the Canadian magazine advertising

base - Attacking the issue of advertising “spillover”

- Policy Goal: Ensure Canadian ad dollars support Canadian cultural industries

- But not always culture…

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Early Days (cont.)

- 1943: Start of “Split Runs”- “Canadian Editions” of Time and Readers’ Digest

(Selection du Readers’ Digest) - Soliciting Canadian advertising and “re-purposing” [dumping]

US-produced content.- Skimming the ad cream away from Canadian magazines

employing Canadian writers, illustrators, etc.

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1950’s

- 1951: Royal Commission on the Arts Report- Massey Report points to problem suggests solution- 20% tax on all advertising in Canadian editions of foreign

periodicals- Enacted in 1957(under Liberals), repealed under pressure in

1958 (under Conservatives)

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1960’s

- 1960-61 Royal Commission on Publications - a.k.a O’Leary Report- Principle: domestic ad expenditures to support own media- 1964: Income Tax Act amendments- 1964: Customs Act amendment

- Exemptions for Time and RD - after pressure from Henry Luce- Concerns with and Autopact negotiations- Representing 43% of all Canadian magazine ad dollars!

by 1970 up to 56% of ad spend

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1970’s

- 1970 Special Senate Committee on Mass Media- a.k.a. the Davey Report- Recommends no more exemptions for Time/RD- Enacted 1976 through Bill C-58 changes to Income Tax Act

- (and also applied to broadcasting)- 75% Canadian owned- RD reached an accommodation

by 1979 from 56% to 22%

Success!

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1980’s

- Mid-1980’s Conservative election victory brings rumblings…

- Time begins lobbying to remove C-58- Debate over removing FST exemption- Debate over elimination of postal subsidies

- Canadian magazines distribute 90% of its circulation via mail- US titles dominate newsstand distribution

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1990’s

- Early on in 1990’s suffered same problems as Book publishing:

- FST to GST eliminated the manufacturing tax exemption- Postal subsidies begin to decline with privatization of Canada

Post

- Significantly lower (historically) direct subsidy to support production

- $2-5M – partially through Canada Council

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1990’s

- Task Force on the Canadian Magazine Industry- After Time plans “Canadian” version Sports Illustrated (1993).- 1994 findings/ recommendations:

- Continued low profitability of Canadian magazines - (2.5% v. 12% for US. Magazines)

- Split Runs if re-established could take out 40% of ad revenue- Importance to keep up the postal subsidy

- 1995: Bill C-103 - 80% excise tax on split run magazines (and tougher controls on

dumping)

- 1996: US challenge to WTO- Charges Canada’s C-103 is “discriminatory practices”- 1997 ruling for US

- No excise tariff, - No limiting import of magazines soliciting Canadian advertising- Subsequently, Canadian-only postal subsidies illegal.

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Key forces:

- Neo-liberal fiscal restraint (budget cuts)- Neo-liberal trade agreements (FTA 1988)- Pressure of Global Media concentration

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WTO Ruling: Significance

- “For the first time a formal trade treaty had been used to overturn policies established to protect Canada’s cultural sovereignty and identity” – Paul Audley, 2001

- Rallying cry worldwide in anti-globalization movement (McChesney)

- Direct impetus for UN Convention on the Protection and Promotion of the Diversity of Cultural Expressions (2005)

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New Millennium

Bill C-55 (1999)- Attempt to prevent split runs- After US retaliatory threats: US magazines can carry up to

18% Canadian ads- U.S. companies can set up Canadian magazines can set

up as long as they carry substantial “Canadian content”

Dropped in favour of direct investment and postal subsidy (2000)

- PAP - Publications Assistance Program- Heritage Canada pays about $45M/yr to Canada Post to

subsidize Canadian controlled magazines- CMF - Canada Magazine Fund

- About $35M in direct subsidy for editorial content, small business start up and marketing

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Lobby Groups

- Canadian Magazine Publishing Association (CMPA), a.k.a. Magazines Canada

http://www.cmpa.ca/

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Think Break – Questions

Would you say that relative to other cultural industries the Canadian government strongly supports Canadian magazines?

What is Lon Dubinsky’s perspective: a cultural nationalist, neo-liberal, post-modernist?

Another point of view: http://www.findarticles.com/p/articles/mi_qa3683/is_200010/ai_n8904169

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Think Break – Questions

Is magazine publishing in Canada a cultural success?

Is magazine publishing in Canada an economic success?

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5. Challenges

See CPMA presentationfinance cattie pre-budget submissionSept 2005.pdf