The Canadian Association of Broadcasters (CAB) Radio Council is calling for foreign-based digital audio and music services like Spotify and YouTube to be brought under the Broadcasting Act.

In its submission to the Broadcasting and Telecommunications Legislative Review Panel, the Radio Council says it believes “that the best way that communications legislation can promote access to Canadian voices on all platforms, in both official languages, is to make it explicitly clear that digital platforms are captured by Commission regulation. We submit that legislative change is not necessary to give the Commission authority to impose contribution requirements on digital foreign-based platforms.”

The council, which represents 500 AM and FM radio stations, argues that essentially most online foreign services already fall under the definition of a broadcast undertaking. It makes the call to have the Broadcast Act encompass those operators in the context of what it terms “disturbing trends” driven by an exodus of advertising revenue to digital platforms.

The submission states that while digital platforms have been undermining the economic model of print media for over a decade and since 2011 have reduced conventional TV revenues by 25 per cent, the impacts on radio have become evident only recently.

Quoting CRTC statistical data, the council iterates the finding that private radio has experienced four successive years of “systemic (not cyclical) revenue declines” totaling $103 million or 6.5 per cent since 2013.

• From 2013 to 2015, radio recorded an unprecedented two years of successive revenue declines, for a total reduction of $20 million or 1.3 per cent on annual revenues of $1.6 billion;

•  From 2015 to 2016, revenues declined by $53 million or 3.2 per cent to $1.55 billion;

•  From 2016 to 2017, revenues declined a further $30 million or 2 per cent to $1.52 billion. CRTC projections estimate declines of a further 3.3 per cent through 2021, with audience listening decreasing by 16 per cent in the same time frame, from an average of 14.2 hours to 11.9 hours per week, excluding radio streaming.

“Notwithstanding radio’s continuing relevance and popularity with Canadians, advertisers are opting to spread their marketing budgets across the vast array of digital advertising platforms available to them. The perception of many advertisers is that they must be on global platforms regardless of whether the metrics demonstrate effectiveness. The largest of these digital advertising platforms are owned by Google and Facebook, which were estimated to be responsible for nearly three-quarters of the Canadian on-line advertising market (or over $5 billion) in 2017,” the submission states.

“If listening to traditional radio continues to decline at the current rate, we could see it
drop by over 33 per cent in the next 10 years. This decline is driven by music listening shifting to digital platforms.”

Regulations should be relaxed and streamlined: CAB

The council says to stay competitive, private radio must be allowed to increase its operational efficiencies through the elimination of outdated regulations and restrictions that applied in a pre-internet era. The council specifically wants to see a relaxation of rules that prevent radio operators from owning more than two FM stations in any market.

“This would allow greater operating efficiencies in a declining revenue environment, allowing a greater proportion of radio’s limited resources to be directed to programming, including local news and information. It will also allow migration to the FM band for those radio stations still operating on the declining quality AM band.”

The council also asks for an expansion of existing Canadian content support mechanisms that recognizes the multi-platform nature of Canadians’ media consumption habits. It also opposes any suggestion radio increase its contributions in support of Canadian content, saying that any declines in revenue (and therefore funding), should be offset by financial contributions from foreign online players.

“Regulations should also be streamlined to put less emphasis on contributions to third party funds and allow more opportunities for radio stations to invest their regulated contributions in news and other Canadian programming that they themselves use (on radio or on an enterprise basis) and exploit,” the council states.

The submission also calls for reasonable measures to maintain consumer access to radio under the Broadcasting Act principle of “priority” for Canadian programming, suggesting those measures could include requiring smartphone manufacturers to activate FM chips in their tech and collaboration with the automotive industry to ensure radio’s prominence on the dashboard continues.

“Greater clarity” on CBC/Radio-Canada is essential

The Radio Council’s submission calls for “greater clarity on, and criteria for, CBC/Radio-Canada’s digital initiatives, including digital advertising.”

The CAB Radio Council is in favour of the public broadcaster eliminating advertising
on its online platforms, and/or government deducting all digital revenue earned by CBC/Radio-Canada from the corporation’s parliamentary appropriation.

“In this environment, taxpayer money should not be used by CBC/Radio-Canada to fund competitive efforts against private Canadian media for market share,” the submission states.

Additionally, it calls for better definition of CBC/Radio-Canada’s role in local news, suggesting it be more “complementary to that of private sector players.” In particular:

• In smaller markets, where private sector players exist, CBC/Radio-Canada should be
more of a supporter rather than competitor, sharing with independent stations national
and regional news feeds without specific attribution requirements; and

• Priority for any new local CBC/Radio-Canada services (be they digital or traditional)
should be given to providing local news in markets where private broadcasters,
newspapers and/or online news websites are not present.

“Even with its significant government funding, CBC/Radio-Canada cannot be everything for all people. What it can do is make a difference in areas that matter the most. The Canadian public will not accept a future where the state-funded broadcaster is the primary source of local or national news. Diversity of editorial opinion between the private and public sectors is paramount,” the submission concludes.