CCA Bulletin 25/06

FROM THE DESK OF ALAIN PINEAU
National Director
Canadian Conference of the Arts

Ottawa, May 24, 2006

Will the CRTC increase Canadian content rules for commercial radio?

The Canadian Radio-television and Telecommunications Commission (CRTC) spent all of last week in Gatineau , Québec, holding a public hearing on the review of its Commercial Radio Policy. The Commission received a total of 183 briefs from various individuals and organizations from all over the country. Of this number, fifty-five intervenors (including the Canadian Conference of the Arts) had obtained permission to participate in the public hearing and debate their views in front of a panel of five commissioners, including the President of the CRTC, Mr. Charles Dalfen.

Each intervenor was given between 10 and 20 minutes to present his views, followed by question periods of various lengths depending on the particular interest of this presentation. Some, like the Canadian Association of Broadcasters (CAB) or the Québec music industry (ADISQ), which had presented voluminous briefs in the initial filing and being parties central to the debate, were given the lion's share of the panel's time. So much so, that after two days, the process was so far behind that the CRTC decided to extend their workday (and that of those who were waiting to be heard!) in order to catch up. After sitting late at night both Tuesday and Wednesday, they were pretty much back on track by the time the CCA was called on Thursday morning.

The main issues of the week were obvious after the very first day:

Canadian Content rules: should CanCon be increased, and if so, by how much (the requirement was increased from 30 to 35% at the last revision)? Positions on this varied from status quo all the way to 51%. Some increase seems to be likely, but it is hard to predict for sure.
Diversity: How to ensure that there is more diversity (in terms of artists, songs and genres) on commercial radio, whose formats are very limited and whose DJs keep playing the same songs all the time? Everybody was concerned with this issue. The CAB put forward a bonus plan for playing the music of 'emerging artists', to encourage broadcasters to take programming risks! Many intervenors pointed out that there was absolutely nothing preventing such risk taking right now and that a bonus point system was just a backdoor way to less Canadian content overall. Others, like the CCA supported incentives if CanCon were raised to 40 or 45%, and as long as the current level of 35% become an absolute floor.
Emerging Artist: At the centre of the debate concerning any bonus system is the definition to give to 'emerging artist'. A variety of suggestions were put forward by participants, some linked to the length of time following the first appearance of an artist in the Top 40 (one year? Four years?), some starting the clock after the launch of a first or a second commercial CD, some referring to a Gold record, etc. Then there is the question about dealing with an artist who has been pursuing a career for a number of years with limited success and has never made it to the Top 40? Obviously, any bonus system for CanCon raises many difficult questions as to whom it should apply!
Contribution to Talent Development (CTD): In 1998, confronted with the poor financial health of commercial radio, the CRTC lowered the contributions broadcasters must make to CTD each year (or in special circumstances, like when buying a new station). The Commission had at the same time considerably relaxed restriction on multi-station ownership in the same market. This de-regulation has led to a considerable amount of consolidation of the industry in a number of large networks and has contributed greatly to the re-establishment of healthy profit margins for the industry, particularly in Anglophone markets.

This return to financial health has prompted many intervenors to demand that contributions to CTD be raised back considerably, despite broadcasters' arguments that things may be better for the moment, but can only get worse because of the increased competition they face from other media (an argument radio has been using since the appearance of television!).

Still related to CTD, there was quite a lot of discussion on how best manage the money. Should the CRTC accept the argument presented by broadcasters that since FACTOR/MusicAction are generously funded by the federal government and that therefore, all the money broadcasters contribute should be directed to their own funds, StarMaker/RadioStar, whose mandate is to give a boost to the career of artists who have already reached a certain level of success? Or, on the contrary, should the CRTC listen to intervenors representing artists or producers (SOCAN, CIRPA, ADISQ) or the CCA, who advocate for a consolidation of the central role played by Factor/MusicAction?

In its presentation to the panel, the CCA reviewed the main arguments included in the brief filed on March 15. Commissioners paid attention and asked a number of questions. One of our main points was that it is necessary not only to maintain Canadian content requirement on commercial radio but to extend the notion in whatever appropriate way to any other media offering music (Internet, satellite radio, cell phones). The CCA also stressed the importance of having a level playing field when it comes to supporting Canadian talent development. It is vital for the health of the Canadian music industry that new media be asked to contribute as much, if not more, depending on the real exposure they give to Canadian artists, than traditional broadcasters. The CCA has expressed serious concern with the exemptions granted by the CRTC to new media, whose popularity and impact is growing fast. This is a file to which we will come back in a few weeks!

CRTC's new Commercial Radio Policy should be published in a few months, after they have finished analyzing and weighing the various arguments put forward by the numerous intervenors. Stay tuned!