Music Canada, which represents the interests of Canada’s major record labels, says the CRTC’s move to impose mandatory contributions on the biggest music streamers, could amount to a “cultural policy disaster.”
In June, the commission announced that online streaming services not affiliated with a Canadian broadcaster that make $25 million or more in Canada, must contribute five per cent of their Canadian revenues to support the Canadian broadcasting system under the Online Streaming Act. Starting in the 2024-25 broadcast year, the funds will be directed to areas of immediate need, including local radio and television news and Canadian television content.
Music Canada CEO Patrick Rogers wrote in a statement posted to the not-for-profit’s website this week, that imposing a five per cent contribution rate is “staggering” and risks streamers’ further investment in Canada.
“For context, it’s roughly 10 times what radio broadcasters are required to pay,” wrote Rogers. “And when you look at how that 5% is divided up, you see that 40% of it goes to funding the radio industry. It is truly confounding that such a large sum of money from streaming services like Spotify, Amazon Music and Apple Music will be used to subsidize our radio industry.”
“The decision ignores the role that licensed streaming plays in the growth of the industry and furthering the careers of our artists,” Rogers continued. “Paid subscription streaming services that pay royalties when music is played are what allow all music companies, big and small, to reinvest in the next generation of Canadian and Indigenous talent.”
Foreign streaming services benefiting massively: CAB
Canadian Association of Broadcasters (CAB) President Kevin Desjardins said it’s not surprising to see Music Canada siding with foreign digital giants.
“Their focus remains on extracting as much money and obligations from the Canadian broadcasting industry, while doing the bare minimum to support Canadian artists and creators,” Desjardins told Broadcast Dialogue.
“Music Canada has strenuously supported an asymmetrical approach to regulating the sector that places Canadian media companies at a competitive disadvantage, maintaining rules from the old reality on broadcasters while their friends at the global streaming platforms are free to operate however they wish,” he continued. “Foreign streaming services are benefiting massively from their presence in Canada. It is only right to expect them to help support the goals of the Broadcasting Act.”
The CRTC estimates the Online Streaming Act will bring in an estimated $200 million per year in new funding for the Canadian broadcasting system.
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