Traditional broadcasters will pay lower fees starting April 1, under a new structure the CRTC announced this week.
Drafted with an eye to striking a fair balance between the regulatory fees paid by traditional broadcasters and online streaming services, the Broadcasting Fees Regulations are calculated and based on broadcasting revenues.
“In making these regulations, the Commission was mindful to minimize the regulatory burden on the Canadian broadcasting system in order to support flexibility and adaptability in its regulatory framework,” the commission stated in a summary. “The Broadcasting Fees Regulations allow traditional broadcasters and online streaming services to continue to benefit from exemption thresholds: large broadcasting ownership groups will not pay fees on the first $25 million in revenue and individual broadcasters will not pay fees on the first $2 million in revenue.”
Under the new framework, traditional broadcasters will pay a lower percentage of total fees. Licencees are also benefitting from the abolishment of Part II fees, formerly charged to hold a broadcast licence. Broadcasters will now pay a single fee, financing the commission’s regulatory activities.
While the commission’s group-based approach was controversial during the consultation phase, the CRTC says it ultimately will result in broadcast undertakings receiving fewer licence fee invoices and contribute to reducing the overall administrative burden on operators.
“Moreover, implementing a modified group-based approach recognizes that the Commission exercises its mandate in a rapidly changing broadcasting landscape, where broadcasting ownership groups (which may be composed of a single broadcasting undertaking) play a significant role and where several traditional undertakings are moving certain operations online (or supplementing existing operations with online versions),” the regulator added.
Revenue excluded from the new fee structure includes audiobook, podcasting, and video game services. Advertising-based Video on Demand, online news undertakings and revenues of online undertakings themselves that provide social media services derived from their own broadcasting activities, such as ad or subscription revenues, are to be included in the revenue calculation.
Commissioner Joanne T. Levy is on record as taking issue with the podcast revenue exemption. While not expected to generate a significant level of regulatory activity, Levy writes that the commission “has no evidentiary record to support such a conclusion; therefore, the Majority Decision is flawed.”
“It would be more appropriate to allow revenue from podcast services to be added to the fees, assess real world evidence as to whether it is insignificant, and proceed to decide whether or not to exempt on that basis,” Levy stated.
The Canadian Association of Broadcasters (CAB) said the new structure should help ease the regulatory burden for broadcasters as they continue to grapple with advertising market disruption and the presence of previously unregulated players in the broadcasting system.
“The CAB is pleased that the new Broadcasting Fees Regulations announced by the CRTC will start to level the playing field for broadcasters by requiring online streaming services to pay annual fees, contributing to regulatory costs for the first time,” said CAB President Kevin Desjardins. “We are particularly relieved that the Commission heard our concerns about minimizing the impact on smaller broadcasters.”
Subscribe Now – Free!
Broadcast Dialogue has been required reading in the Canadian broadcast media for 30 years. When you subscribe, you join a community of connected professionals from media and broadcast related sectors from across the country.
The Weekly Briefing from Broadcast Dialogue is delivered exclusively to subscribers by email every Thursday. It’s your link to critical industry news, timely people moves, and excellent career advancement opportunities.
Let’s get started right now.
