New Commercial Radio Policy will see biggest revenue earners pay more

The worst fears of many broadcasters failed to materialize when the CRTC released its Commercial Radio Policy on December 15: the commission kept Canadian content requirements for English-language daytime music at 35%. But the regulator also ruled that those who earn the most should pay the most to Canadian Talent Development (CTD) initiatives, a quid pro quo many are still pondering."I think we recognize how difficult it was for the commission to come up with something that will balance these two, but I think…leaving Canadian content at 35% and having an increase in funding is fine," Paul Ski, president of CHUM Ltd.’s CHUM Radio division, says of the decision in Public Notice 2006-158. That acceptance is shared by smaller broadcasters as well. "It represents a significant increase in the cost of doing business for the industry," says Rick Arnish, president of Jim Pattison Broadcast Group Ltd. "If there’s a tradeoff…it’s that the Canadian content level was left at 35%." According to the CRTC, the amount of CTD contributions generated during various broadcasters’ licence renewal processes in the 2004-2005 broadcast year was $2.83 million. Under the old system, the size of the market a licensee operated in dictated the annual amount, up to $27,000 per year of licence in the largest markets. However, the new policy replaces that market-size test with one geared to revenue, with the largest players – those with total revenue exceeding $1,250,000 – contributing $1,000 plus a portion of the previous year’s revenue if it exceeded $1,250,000. Using that formula, the CRTC says the various licence renewal processes in 2004-2005 would have generated $4.1 million, a 45% increase over the old method of calculating CTD contribution levels. Those changes would most adversely affect the largest broadcast groups in terms of revenue, such as CHUM; it’s not surprising, then, that Ski has a somewhat guarded reaction to them. "Fundamentally, I think our belief has been that if you’re in a larger market then all of the broadcasters should be paying the same amount," he says. In addition to those accounting changes, the commission also changed the name of the CTD regime to Canadian Content Development (CCD) and ruled that a minimum of 60% of basic annual contributions under the new CCD regime should go to the Foundation Assisting Canadian Talent on Recordings (FACTOR) and MusicAction, which help independent artists produce recorded works. That decision goes against the wishes of the Canadian Association of Broadcasters, which had pressed for contributions to go to the broadcaster-created Radio Starmaker Fund and Fonds Radio Star instead. Earlier this year, FACTOR president and CEO Heather Ostertag expressed fears that if the CAB’s request was approved, it could trigger a cascade effect that would see the Department of Canadian Heritage pull its funding as well, leading to an eventual collapse of FACTOR (CCR, April 21/06). However, the commission also approved several other categories of initiatives eligible for CCD funding, including music industry associations, schools and educational institutions, and initiatives for promoting local music and talent. While Arnish says he supports FACTOR and MusicAction, he’s pleased that his firm’s Save the Music Foundation, which funds projects by British Columbian and Albertan recording artists, would be an acceptable recipient of CCD funds under the latter category. CHUM’s Ski echoes that sentiment: "We’re certainly supportive of the great work that FACTOR and StarMaker do, and I think the opportunity to use some discretionary funds for other things which regionally help talent or do things for talent is I think also really good too."

New Commercial Radio Policy will see biggest revenue earners pay more

News | 12/20/2006 5:00 am EST

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