Some old, some new in radio policy review

After an eight-year interregnum, the CRTC is ready to re-examine its commercial radio policy after announcing a framework for the review on January 13. Topping the list of issues to be addressed is the impact of emerging technologies – satellite and Internet radio broadcasts, podcasting, and music downloading and file-sharing – on existing commercial radio services. The Canadian Association of Broadcasters (CAB) asked the CRTC to delay the launch of the radio policy review expressly so that the CAB’s members might have time to gauge satellite radio’s impact, but the CRTC declined (CCR, Oct. 7/05). While the introduction of US-based satellite radio services last June has dominated headlines, Wayne Stacey, a technical advisor to the CAB and a consulting engineer with his own practice, notes that concerns surrounding terrestrial digital radio precede the arrival of satellite radio in Canada in June 2005 by more than a decade. "We of course have had terrestrial digital radio for quite some time here," Stacey says. "There are dozens of stations on the air." In 1992, an organization called Digital Radio Roll-out Inc. (DRRI) was formed to facilitate the launch of digital audio broadcasting in Canada. However, the rollout of digital radio services proceeded much slower than originally anticipated by DRRI, and the organization restructured in 2004 to cut its costs. Today, there are approximately 50 digital radio stations in operation, mostly clustered in the three major markets: Toronto, Montreal and Vancouver. The review framework makes mention of the stalled transition to digital radio services: "In spite of the availability of DAB signals, very few people are listening to these services due to the limited take-up of DAB receivers in Canada. This has been due, in large part, to the limited availability and cost of the DAB receivers that have entered the Canadian market." "It’s the old chicken-and-egg receiver problem," Stacey says. "If the people aren’t out there in droves and putting demand on the retailers for these receivers, then it’s hard to justify stocking them." Although the technology will allow the multicasting of several separate channels for each AM or FM station, broadcasters currently using the technology "are confined to simply simulcasting their existing programming" by the 1998 CRTC radio policy in effect at this time. That lack of additional content has proved another major factor in the slower-than-expected transition to digital radio. Despite the near-CD quality sound and interference-free reception, "it’s hard to convince people to part with the money for new receivers when you’re getting no increased choice in the programming," he adds. "That’s part of the question the CRTC wants to get into, too: should they stick with this simulcast policy, or could they make things move ahead a little better in this country with what we’ve got if they were to allow additional programming that would only be available through a digital radio receiver?" Stacey says. "They’re a little overdue in reviewing this transitional DAB policy anyway, because they did say they would review it within a couple of years but then things kind of slowed down and they weren’t particularly inclined to get into that on its own, so it’s got rolled into this policy hearing as one element." However, notes Stacey, the CRTC turned down the CAB’s request to delay the review because "there are other fish to fry in the radio review. It isn’t all just about digital radio and transition and so on, it’s about a whole host of other things. They have to deal with Canadian talent development and Cancon and other stuff that is contained in their policy." The last radio review got underway with a consultation round in 1997, with the commission issuing a revised policy the following year. Key concerns at that time included ownership issues such as the common ownership policy and local management agreements; Canadian Talent Development, Cancon levels and the benefits test applied when radio stations change hands; broadcasting in both official languages; and programming and news diversity (CCR, May 13/98). A major outcome of that review was the CRTC’s move to increase the daytime Cancon requirement from 30% to 35%; further, the commission hinted the level could move to 40% in the next review. "It’s excessive, unfounded and most importantly, not what listeners want," Michael McCabe, the CAB’s president during the 1997 review process, said at the time of the increase. He also added the 5% hike could adversely affect private radio. CAB VP Pierre Pontebriand noting the "extremely short timeline" for the review’s consultative round, says the group needed to consult with its membership before responding with a statement. However, he points at another part of the policy in need of re-evaluation, the requirement for Quebec radio stations to play 65% Francophone content at peak times, in light of radio’s declining fortunes in French Canada. According to the review framework, profit before interest and taxes declined by 1.3% at French-language stations between 2000 and 2004, while it gained 8.8% at English-language stations. The CRTC reports that stations have been playing shortened song fragments in order to reach their content requirements more quickly, defeating the purpose of those Francophone content requirements and allowing the stations to devote more air time to high-profile international English-language artists. The deadline for comments on the radio review framework is March 15, with the public hearing getting underway on May 15 in Gatineau QC. TIMELY TOPICS OF DISCUSSIONSome questions the CRTC plans to address during the 2006 commercial radio review process What is the likely impact of other audio technologies, such as satellite radio, Internet radio, podcasting, file sharing and downloading, on commercial radio and the music industry? How can commercial radio attract younger audiences in light of competing sources of popular music? How can French-language broadcasters respond to the demands, particularly of younger audiences, for a greater variety of music? How will Canada’s changing demographics, particularly the increasingly multi-ethnic and Aboriginal composition, affect the audience and revenue base of commercial radio over the next 5 to 10 years? What are the appropriate responses of commercial radio to these changes in order to attract and retain its audience? What factors will influence the availability of popular Canadian music, in both English and French, over the next 5 to 10 years? What is commercial radio’s role in ensuring a steady supply of such music? In a fragmented marketplace, what strategies will result in an appropriate balance between the market and regulation in order to ensure that commercial radio successfully contributes to the objectives of the Broadcasting Act?

Some old, some new in radio policy review

Broadcast | January 27, 2006

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