CRTC Review of Radio

On Friday Dec. 15, the CRTC delivered its Christmas present, announcing the results of its commercial radio policy review. I suppose that makes Chairman Charles Dalfen Santa or Scrooge, depending on your point of view. The proximity to Christmas will serve to limit reaction time, but I'm sure all of the interested parties will be giving us their viewpoints on what they found in their stockings.

The story began with four gruelling days of hearings held this past May in Gatineau. Since then, members of the broadcast and music industries have been nervously waiting for word to come down. While there was nothing startling in the release, the most surprising elements were the regulations that were not altered. Let's take a look at the highlights, and most importantly, the ramifications of the decision.

The CRTC discussed the serious competition the radio medium faces from new regulated and unregulated technologies for the distribution of music (i.e. MP3 players, iPods, internet radio, podcasting, downloading, satellite radio and cell phone radio). Dalfen, Chairman of the CRTC, said "the key challenge facing the radio industry is to remain relevant" in the face of the technologies. Still, little in the review beyond new approaches to Canadian Content Development directly addresses these issues.

Even though it was widely expected that a bonus or quota system for new and emerging artists would be introduced to compliment Cancon, the minimum level of Cancon remains at 35% without further restrictions. 40% was considered and rejected due to the competitive climate in which radio finds itself.

Independent artists and those representing them will be crushed by the decision. Regulations were changed for classical (raised to 25% from 10%, jazz and blues (up to 20% from 10%), but this will have an effect on relatively few stations. Bottom line: the CRTC deferred to broadcasters by not imposing more taxing regulations while they are preparing for the fight with outside influences. The demands of artist groups were heard but not answered in this area. I should mention that the Canadian Association of Broadcasters were disappointed that the CRTC maintained the status quo with regard to French vocal music. Lastly, as some concession to new artists, "applicants for new licences, licence renewals and transfers of ownership or control of radio stations will be asked to make specific commitments to provide airplay for and to promote emerging Canadian artists and their music…….the Commission may decide to impose conditions of licence".

There were some changes made in the approach to Canadian content development contributions. The basic contribution system would be based on a radio station's revenues as opposed to the size of the market in which it operates. The CAB issued a release saying that "the increased burden that will result from tying these initiatives to broadcasters' revenues is of some concern." Bottom line: this makes common sense and is probably the way it always should have been…pay on the ability to do so. Smaller niche stations will be the grateful winners in this scenario. As we deal with a more fragmented playing field, this assistance to niche players should be welcomed.

In the area of CCD, broadcasters will continue to contribute to FACTOR, MUSICACTION, the Radio Starmaker Fund and Fonds RadioStar. The Commission noted that the following are also eligible for CCD funding: Music Associations, schools where contributions benefit students of music and journalism, talent contests and production of emerging artists, independent producers of spoken word content, and other specialized services covering the interests of children, Aboriginal peoples, and persons with disabilities. Bottom line: a serious sigh of relief from FACTOR, MUSICACTION, the Radio Starmaker Fund and Fonds RadioStar. This could also open up some intriguing opportunities for enterprising producers, journalists and musicians.

One part of the decision that didn't garner a lot of attention, but perhaps should have….L-band licensees "will be free to develop whatever broadcast services they believe will be of the greatest interest to the listening public" Remember….DAB stagnated largely because stations were limited to replication of existing AM/FM programming with the exception of 14 hours per week. Consumers weren't willing to buy new receivers unless they got alternative programming. Bottom Line: look for innovative, niche and multicultural broadcasters to exploit this in a significant way.

What does all of this mean to the average listener or advertiser? Bottom line: in all likelihood, most will greet the decision with a collective shrug of the shoulders since there will be no fundamental change in regulated programming structure. Far more intriguing will be the manner in which new media conduct their onslaught and the way in which radio defends its traditional base.

I tend to believe that the real review of radio will be conducted by the listeners being confronted with all of these choices... Stay tuned. Happy holidays.


David Bray is Sr. Vice President of Hennessy & Bray Communications.

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