Will the CRTC increase Canadian content rules for commercial radio?

CCA Bul­letin 25/06

Ottawa, May 24, 2006

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!