CAB Terms New CRTC Policy 'A Profound Disappointment'

By FYI Staff

The following is reprinted from the Canadian Association of Broadcasters’ website, as posted yesterday–Dec. 07.

Today’s decision in the Canadian Radio-television and Telecommunications Commission’s (CRTC) Commercial Radio Policy review is a profound disappointment and a missed opportunity to help ensure the future sustainability of radio in Canada.

As the national voice of Canada’s private broadcasters, the Canadian Association of Broadcasters (CAB) finds it disconcerting that today’s long-awaited decision is deeply rooted in validating the policies of the past while downplaying the current challenges in the commercial audio market.

“After a drawn-out process of well over two years, we are dismayed that the Commission has missed this critical opportunity to establish a forward-looking policy for the sustainability of radio broadcasting in Canada,” said CAB President Kevin Desjardins. “Instead, we have been presented with regulation through the rear-view mirror, which uses past policy touchstones that do not create the conditions for future success for a radio sector already in crisis.”

The Commercial Radio Policy was last reviewed in 2006, before iPhones, Spotify, Apple Music, and other internet-based audio services even existed. It is unfathomable that the Commission would, 16 years later, adopt a policy framework that largely maintains the status quo when the evidence is clear that the radio industry is experiencing a significant decline due to massive changes in the audio ecosystem.

With a few small exceptions, the updated Commercial Radio Policy does not include any meaningful changes for commercial radio broadcasters. In fact, it instigates further processes through Canadian Content Development (CCD) initiatives and the review of Canadian content requirements. Moreover, the Commission chose to defer important aspects of the decision into further proceedings without providing a timetable for those processes.

Today’s decision placed its greatest emphasis on supporting Canadian artists. This is a laudable goal, and Canadian radio contributes to their successes in many ways. However, our ability to continue doing so depends on a healthy and sustainable radio sector. According to the CRTC’s own results, the radio sector has seen considerable reductions in revenue over the last six years, with a precipitous decline due to COVID. Many stations are unprofitable, and radio owners have been awaiting the CRTC’s decision to determine whether to continue operating or not.

A healthy radio sector inherently supports the goals of the broadcast policy – as it has for decades – so it is unfortunate that commercial radio broadcasters have been treated as an afterthought.

Canadian commercial radio broadcasters are an integral part of communities across the country, and they are dealing with considerable challenges, including declining advertising revenues worsened by the pandemic and a slowing economy. Over the past six years, total revenues for commercial radio in Canada have declined by more than half a billion dollars, with massive foreign digital platforms taking a significant bite. According to an analysis from Communications Management Inc. (CMI), there are 188 radio stations across Canada that are at risk, with profits before interest and taxes (PBIT) of -20 percent or more. Many of these stations were awaiting a lifeline from this decision, which did not materialize.

At a moment when the market for audio listening is exploding with unregulated options, the Commission must change course for the future viability of the sector. In line with our submission to the policy review, more could and should be done to ensure that commercial radio broadcasters can continue to do what they do best: inform, entertain and connect Canadians.

However, Music Canada's view of the new policy framework is quite the opposite.

In a statement released yesterday afternoon, MC CEO Patrick Rogers stated, “We appreciate the Commission’s work as radio continues to be an important way for Canadian artists to connect with their fans. We look forward to helping them modernize the definition of Canadian content to ensure it reflects not only how Canadians make music today but how they find success on radio and in streaming (and) we applaud the Commission for maintaining current Canadian content regulations,” even as “we would have liked to have seen a higher play requirement for plays by emerging artists.”

He added that a “5% requirement will act as an important tool to help ensure the next generation of great Canadian talent is heard. Lastly, we support the Commission's efforts to help create an environment where music from equity-deserving and sovereignty-affirming groups can grow in that it is done so in ways informed by the voices from those communities.”