CCA Bulletin 15/06

March 31, 2006

The CCA Defends Canadian Content Regulations and Supports Canadian music Talent Development in its Brief to the CRTC

A few months ago, the CRTC announced that it would proceed to Review the 1998 Commercial Radio Policy (see CRTC PN 2006-1). Commercial radio broadcasters have been, and remain, an important part of the distribution system for information, music and entertainment materials. Over the course of the hearings on May 15, 2006, the CRTC will review important cultural issues – explaining why the Canadian Conference of the Arts (CCA) determined it was crucial to intervene in this review process.

The CCA announced its intention to intervene in this important CRTC Review in its “From the Desk of Alain Pineau” bulletin issued February 16 2006 and, on March 15 2006 the CCA presented a brief to the Canadian Radio-Television and Telecommunications Commission (CRTC). The positions taken by the CCA have been developed after consulting with all major stakeholders, both CCA members and non-members.

Context of the CRTC Review

The objectives for Canada's broadcasting system are set in the Broadcasting Act (1991) . Foremost among these are that the system should be Canadian-owned and controlled, that radio programming should be predominantly Canadian, and that listeners should be provided with varied and comprehensive programming from a variety of sources. The Act also states that programming should be of a high standard, balanced on matters of public concern, relevant to local communities and reflect Canada's rich cultural diversity. Finally, broadcasting services must be provided in English and French.

Over the past eight years, there have been significant changes to the environment in which Canadian commercial radio operates and significant changes as well for the music industry with which it has a symbiotic relationship. While Canadians are listening to one hour less radio today than they did in 1999, the overall average Canadian still listened to 19.5 hours per week in 2004, divided between the home, work and the car. However, the average figure tells only part of the story, as there are significant age differences: 12-17 year-olds listened to only 8.5 hours of radio per week, down from 11.3 hours per week in 1999; and 18-24 year-olds listened to 15.7 hours per week. Since there is no evidence that today's young people listen less to music than did previous generations, one must conclude that they are accessing it in new ways.

Audiences do indeed have new ways of receiving news and information and new ways of listening to music. According to Statistics Canada, in 2004, six out of ten Canadian households were connected to the Internet and many Canadians routinely used the Internet at work. Computer networks, including the Internet, are becoming even more pervasive as competition to supply a range of improved telecommunications services heats up. The recent announcement by Toronto Hydro that it will provide wireless Internet access throughout the downtown core of that city later this year highlights this development. Digital downloading has become a significant way to access music, and streaming of broadcasting signals and pod-casting are an increasingly common way of making programs available to Canadians and other listeners.

But despite the changing technological environment, commercial radio remains an important means of distribution and continues to play a critical role in the development of Canadian music and artists. Airplay is still an important way to expose audiences to music and artists.

New technologies have been both a challenge and an opportunity for commercial radio. Many radio broadcasters already have well-developed Internet distribution models, which can attract additional advertising and other revenues.

Finally, thanks in part to the policy adopted by the CRTC in 1998, commercial radio broadcasters are again financially healthy and this is likely to continue for the foreseeable future, since they remain an attractive medium for advertisers.

CCA's positions

For more than 30 years the CRTC's Canadian content rules, which require broadcasters to provide specific levels of Canadian music in their schedules, have underpinned the emergence and development of Canadian music producers and artists. The financial support which broadcasters are requested to give to Canadian music talent development (CTD) have also played a major role in creating the current vibrant Canadian music industry and have led to the emergence of several international stars.

The CCA not only firmly believes that such regulatory tools remain as relevant today as they were when first introduced but that they should be extended to all distribution systems irrespective of the technology used. With respect to material that falls within the definition of broadcasting, ISPs are providing services equivalent to broadcast distribution undertakings. The CRTC should consider requiring them to provide priority for Canadian websites and services, and to make a financial contribution to the production of Canadian music and audiovisual programs delivered over the Internet.
Given the return of commercial radio to profitability, the CCA believes that licensees should be increasing their commitments to all genres of Canadian music and artists, with a particular focus on new and emerging artists.
The CCA is recommending that Canadian content levels be increased: for popular music to at least 40%; for classical music to at least 25%; and for jazz music immediately to at least 20%. The CCA would not oppose a phase-in period for the higher content levels in popular and classical music. The CCA also believes that content should be calculated on the basis of three-hour time slots, from 6:00 am to 6:00 pm to correct the predisposition of some licensees to program Canadian material at times when audiences are lower.
The CCA supports the existing requirements for French-language broadcasters to program French-language vocal music (65%).
The CCA believes that new regulations and incentives are needed to promote airplay for new and emerging artists and for Canadian artists in specialized categories. A system of bonus credits may be appropriate in the context of rising Canadian content requirements.
Finally, the CCA recommends that commercial radio broadcasters make an annual contribution to Canadian Talent Development of no less than $10 million. The appropriate minimum public benefit in the case of transfers of ownership should be increased to 10%. The bulk of the new CTD should flow to existing arms-length agencies involved in talent development, primarily Factor/MusicAction.

The CCA has requested to appear at the hearings which are scheduled to begin on May 15th 2006 in Gatineau. The complete CCA brief to the CRTC (available in English only), can be found on our website at www.ccarts.ca.