Canadian Music Industry Weighs in on How to Support Canadian Audio Content at CRTC Public Hearings

The Canadian Radio-television and Telecommunications Commission (CRTC)'s "Supporting Canadian and Indigenous audio content" hearings are underway.

The CRTC proceedings are centred around the Online Streaming Act, a legislation that updates Canada's Broadcasting Act for the new digital media landscape. It's a once-in-a-generation update to CanCon regulations, and many stakeholders have been weighing in about how it should be implemented.

An important aspect to these hearings is last year's CRTC decision to enforce major foreign-owned streaming services with Canadian revenues over $25 million to pay 5% of those revenues into Canadian content funds, like FACTOR and Musicaction. It's been a major hot button issue, with pushback from the big major streaming services like Spotify and Amazon. After appealing the base contributions, the courts paused payments until an appeal.

That has been a big topic of conversation in arguments over a series of five days of hearings in Gatineau, Quebec, from September 18 to September 29.

The country’s federal government is under heavy pressure from the United States to forego the base contributions in the legislation, with 18 members of Congress signing a letter, claiming the act “imposes discriminatory obligations and threatens additional obligations imminently is a major threat to our cross-border digital trade relationship.”

CRTC regulations state that at least 35% of popular music picks on commercial radio stations must be Canadian content — but this standard doesn't currently extend to music streaming services.

The goal of the hearings is to discuss how CanCon regulations can be adjusted in support of the changes taking place in the music industry and the Canadian broadcasting system, including the rise of streaming services, the decline of radio broadcasting alongside increasing support for Indigenous music and diverse Canadian artists.

In its notice of consultation on the hearing that began last week, the CRTC said streamers should “contribute to the discoverability of Canadian, French-language and Indigenous music either through financial contributions or through initiatives targeting the promotion and exposure of these songs to their users.”

Streaming Services's Influence on Canadian Music Play

In the first two days of proceedings, statements have been made from stakeholders including SiriusXM Canada, Music Canada — who applied to intervene in the appeal earlier this year — Amazon, Nettwerk Music Group and CBC/Radio-Canada.

On September 18, Music Canada — the trade association representing Canada's three major labels, Universal Music Canada, Sony Music Canada and Warner Music Canada — argued that the Canadian music streaming market was already achieving the policy objectives of the Broadcasting Act.

This week, they acknowledged that over the last decade, the streaming market has been key to the Canadian music industry since the first licensed music streaming service launched in the country in 2014, but noted the regulations "should be carefully calibrated to support, not hinder, its growth."

With the Online Streaming Act, “the arrival of these services, coupled with significant and strategic investments in infrastructure and talent by labels and other players across the sector, helped the Canadian music industry rebound and has brought with it renewed investment in the music of Canadian and Indigenous artists,” they said.

To ensure CanCon is being promoted to listeners, Music Canada "has engaged meaningfully throughout the CRTC’s regulatory framework proceedings," calling this a "once-in-a-generation process," that has the means to impact a market that is a key revenue driver of the Canadian recorded music industry and the platforms Canadians listen to, engage with and discover music.

In their submission, Amazon Music — which has boasted Canada-specific initiatives like Northern Echoes — told the CRTC that recorded-music revenues in Canada have almost doubled since 2013, with streaming accounting for about three-quarters of the total. The platform claims that music streamers pay approximately 70% of their revenues to music rightsholders in royalties.

“A framework that recognizes and builds on what streaming services already do to promote Canadian music is far more likely to succeed,” they noted as an opposing argument.

The online platform has made "vast quantities of Canadian music playable at the touch of a button, we make other extensive contributions to the discoverability of Canadian music," including "developing and prominently promoting over 500 playlists featuring, or curated by, Canadian and Indigenous artists, and supporting Canadian and Indigenous artists and industry organizations," through working directly with artists to create new music and by way of advertising, launching training programs and hosting live performances.

Calling their Canadian contributions "substantial," the streamer is a major champion of homegrown talent, working to create Amazon Music Original songs with Canadian and Indigenous artists such as Aysanabee, Ruby Waters, Tia Wood, The Beaches, Alessia Cara and Coeur de Pirate.

Discoverability As Key to Artists' Growth

Nettwerk Music Group considers music streaming vital to the Canadian music industry and the artists on the pioneering B.C. indie label's roster, including Renforshort. Their statement highlighted the “discoverability” of Canadian and Indigenous artists, noting that the guidelines in place for radio should not be synonymous with streaming services.

"It should be noted that while radio has been, is, and will hopefully continue to be an important force in the Canadian recorded music, it is not, and has never been, the recorded music sector's primary source of revenue," they said.

To ensure artists continue to gain an audience, they suggest “investments in hiring and supporting Canadian streaming platform staff who work within the Canadian music business to promote and support Canadian artists,” across the country and globally. They clarify that the term "discoverability” means assisting streaming service users in finding and listening to Canadian and Indigenous music. "Discoverability does not mean controlling the listening habits of those users," they noted.

The following day (September 19), CBC/Radio Canada echoed a similar sentiment about discoverability in relation to the Online Streaming Act, noting that “requirements should be incremental to the financial contributions that support the creation of Canadian and Indigenous content for the audio sector.”

They noted that modernizing the regulatory framework to position the audio sector to positively benefit Canadian broadcasting objectives is long overdue. "The Commission is directed to consider both established and emerging means of discoverability and showcasing to promote a wide range of Canadian programming," they said.

However, CBC/Radio Canada instead argues for a "flexible regulatory approach" that is tailored to individual streaming services. They broadcaster proposed that online streaming services should submit a discovery plan and report annually on measurable outcomes. "The key is to allow each platform to choose its contributions to discoverability, based on their technical means and product designs, product roadmap and customer and marketing strategies."

Watch the CRTC's Public Hearings

The CRTC's hearings are part of an ongoing rollout of the Online Streaming Act. Earlier hearings considered arguments about the definition of what constitutes Canadian Content. The arguments have been compiled into a comprehensive report that is a must-read for the music industry.

The remaining three days of hearings will resume on September 25 and 26 with statements from the FACTOR, the Indigenous Music Office, CIMA, Apple Canada, Bell Media, Spotify, ADISQ and more. The final day is September 29.

The hearings are available for public streaming via CRTC here.