Pressure on, polls abound in satellite radio fray

The independent Canadian music scene and others supporting the CRTC’s licensing of satellite subscription radio services are ramping up their lobbying amid recent speculation that Canadian Heritage minister Liza Frulla is going to ask the federal Cabinet to refer the decision back to the commission for re-evaluation. Indie Pool Inc., a for-profit provider of bulk recording, merchandising and marketing services to independent Canadian musicians, has released a survey showing that a majority of such artists support the CRTC decision, while Sirius Canada on August 29 announced that 76% of Canadians agree with the commission according to a recent poll it commissioned. Indie Pool surveyed a sample group of independent artists in July and August to gauge their take on satellite radio, with 518 of 568 musicians aged between 16 and 67 representing all provinces and genres of music who were polled saying they supported the CRTC’s decision to license the satellite radio services of U.S.-based XM Satellite Radio Inc. (Broadcasting Decision 2005-246) and Sirius Satellite Radio Inc. (Broadcasting Decision 2005-247). Sirius’s more recent study revealed that only 21% of Quebecers think the federal Cabinet should overturn the CRTC decision. A slew of Quebec-based cultural organizations are among the parties appealing the decision, claiming that the two satellite subscription services wouldn’t contain enough Canadian content, particularly in the French-language. In releasing the survey results, Sirius trumpeted the fact that satellite radio will give Canadian artists exposure across the continent. The satellites that are to be used for the two radio services cover all of North America and are currently in use for U.S. versions of the offering. Those U.S. services would be offered in Canada with some Canadian channels added that would also gain North American-wide availability. Sirius notes that its survey found that 69% of Quebecers agree (31% strongly agree) that having four commercial-free 100% French radio stations broadcast throughout North America will provide Quebec artists with great exposure, Sirius said. Opposed to that line of logic are a plethora of arts and labour organizations, including the Society of Composers, Authors and Music Publishers of Canada (SOCAN), l’Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) and the Canadian Independent Record Production Association (CIRPA), who are appealing the CRTC’s decision. CIRPA executive director Cori Ferguson says her group is concerned about Canadian artists "getting their fair shake" from satellite radio providers, saying that in conventional terrestrial radio "35% Canadian content is billed as a minimum, and treated as a maximum." "We don’t want the 10% of the channels having Canadian content to be looked at as a maximum. If it is, it becomes detrimental to Canadian artists – there’s no guarantee they’ll ever get played on the American channels, there’s no guarantee that Americans will listen to the Canadian channels," she says, adding that the Canadian channels are also programmed in block-genre format. "If I really like folk music, am I going to tune in to the Canadian channel between 3 a.m. and 4 a.m. to listen to folk music, or am I going to listen to the all-folk channel?" Gregg Terrence, president of Indie Pool, reiterated in a recent interview with Canadian NEW MEDIA some of his organization’s old arguments in support of the licensing. He says that at the CRTC’s November 2005 public hearings on satellite radio, his organization "asked the CRTC to extract as much as they could from these companies: as much money as they could, as much CanCon and Canadian channels, as much control over decency, extract everything you can from them," while still granting the two entities permission to operate in Canada. XM Radio is represented in Canada by John Bitove’s Canadian Satellite Radio Inc., while Sirius is a venture between it and the CBC and Standard Radio Inc. While Terrence says he’s a staunch supporter of Canadian recording talent, he also states he was mindful of the fact that satellite radio already had 100,000 subscribers in Canada before it was even approved here, according to Sirius’s estimates. Accordingly, he says he felt it was time to face facts. " don’t go so far as to drive them into the grey market, because then we have zero, and they have no incremental costs to broadcast into Canada, just the benefit," he says. Further delays – or even an eventual reversal of the decision – will mean more money diverted from the CTD system permanently. "Let’s say two years goes by – instead of there being 100,000 Canadians with it, there’s 300,000 or 400,000. We’re never going to get them back," nor their potential contribution to Canadian Talent Development, Terrence says. "There’s a big possibility that if this is rejected by cabinet, have a chance to legitimize these guys again...we’re just going to see a massive grey market evolve in Canada real quietly." However, those figures for the grey market are likely overstated, says CIRPA’s Ferguson, citing a poll of Canadian attitudes toward satellite radio that the Canadian Recording Industry Association (CRIA) included in its statement during the licensing hearings. "Of the they’d polled, only 15% were aware that there were new radio services that had been licensed. So, how is it that they already have 100,000 people subscribing to these American channels?" she asks. A main argument against allowing satellite radio providers to broadcast into Canada hinges on the lower amounts of Canadian content they were asked to provide by the commission, versus the amounts that terrestrial broadcasters are mandated to by CRTC regulations. While homegrown music radio stations must provide a minimum of 35% Canadian content (and 50% for talk radio), XM and Sirius will only be committing about 10% of their total global programming to Canadian artists under the licence, which says they must have one Canadian content-driven channel for every nine foreign channels broadcast into Canada. Both providers have plans to create Canada-focused channels (four at XM and five at Sirius) with no less than 85% CanCon on each, but the CRTC has mandated they each offer eight upon launch. Allowing XM and Sirius to broadcast in Canada with roughly 30% of other radio stations’ CanCon requirements is not a perfect scenario, Terrence admits. "If we could get 35% Canadian content on these U.S. satellite services, then great – if we could, we would. But it’s not possible: the shareholders would never allow it in the U.S., it’s obviously a ridiculous demand," he says. However, Ferguson notes that a third option – CSRC, the terrestrial-based subscription radio service proposed by Astral Media Inc. and CHUM Ltd. – was approved at the same time as the CSR/XM and Sirius licence applications. "The delivery method may be a bit different in that it’s terrestrial based on repeaters, but it’s a subscription service that at least adheres to Canadian content regulations," she says. "It’s a made-in-Canada solution to the problem, and it would still continue to provide Canadians with subscription radio they could listen to from coast to coast. I don’t understand why we’re not concentrating on finding a Canadian alternative rather than wholesale selling-out our satellite airwaves to the Americans." For his part, Terrence says he also supports the Astral/CHUM offering and its licensing requirements. Another contentious issue is the commitment to Canadian Talent Development made by the U.S.-supported offerings. The average Canadian terrestrial music station pays about $15,000 a year into the CTD system, according to CRTC figures from 2003. By contrast, XM and Sirius will each pay 5% of their yearly revenue into the CTD program. By current projections, that will mean a contribution of $19.75 million in XM’s case and $21.5 million in Sirius’s during their first seven years of operation. Interestingly, one of the proposed beneficiaries of XM’s CTD contributions is Indie Pool, which is slated to receive $420,000 over the seven-year licence term. Terrence says Indie Pool was asked by XM how it might help unsigned artists, and says funds represent "a subsidy we’re not allowed to make a profit from," but will go directly to covering artists’ costs. "In hindsight I wish I had rejected that ," he adds. Despite the sometimes-heated exchanges Terrence says he has nothing but respect for those appealing the ruling. "A lot of people I respect and work with are on the other side, and I think feel the same way – there are all kinds of people on this side who are pro-CanCon flag-wavers." Cabinet will rule on the appeals on or before September 14.

Pressure on, polls abound in satellite radio fray

News | 09/02/2005 4:00 am EDT

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