Cumulative revenue for Canadian TV and radio has declined by $1.36 billion since 2016
By Robert Malcolmson
THE DIRE SITUATION FACING Canada’s television and radio industry – the lifeblood for Canadian content, including local, regional and national news – is hurting our communities and weakening a far-reaching sector of the Canadian economy, a sector that employs approximately 25,000 and contributes enormously to our cultural landscape.
With Bill C-10, the government of Canada is laying the groundwork for a much-needed rebalancing of available support for the Canadian broadcasting system.
This rebalancing would see online players like Netflix, Amazon’s Prime Video, Disney+ and others – companies that today have millions more Canadian subscribers than all of Canada’s TV distributors combined – also start contributing directly to the system while, at the same time, recognizing the necessity of providing established Canadian players with more flexibility and financial sustainability to meet today’s challenges.
Canada needs this. At its roots, the situation now facing private commercial broadcasting in Canada is the direct result of public policy requirements and regulations designed for a long-ago era that pre-dates the emergence of streaming video, leaving the current system dependent on a range of complex, anachronistic funding mechanisms that are less and less sustainable.
Particularly vulnerable are traditional television and radio, especially local, regional and national news from Canadian producers and journalists. This is because the resources supporting most locally produced content – especially advertising revenue – are drying up. Despite enduring popularity among Canadian viewers and listeners, cumulative revenue for Canadian TV and radio has declined by a staggering $1.36 billion since 2016, a trend rooted in the shift of advertising dollars away from traditional media to online platforms, an ecosystem dominated by massive, non-Canadian players.
As a legislative response, Bill C-10 would clear the way for changes to Canada’s 1991 Broadcasting Act and require over-the-top (OTT) streaming services to contribute a portion of their Canadian revenues to support Canadian programming, production and news, just as Canadian media companies and broadcasters are already required to (and do).
Without doubt, OTT providers like Netflix, Disney+, Amazon’s Prime Video and Apple TV have the financial resources to contribute meaningfully to the Canadian system. Netflix, for example, already takes full advantage of Canadian skills, talent, generous tax credits and a low Canadian dollar to ramp up content production in Canada.
“There is an important distinction to be made: Just because content is made in Canada does not mean that the content qualifies as being Canadian.”
But there is an important distinction to be made: Just because content is made in Canada does not mean that the content qualifies as being Canadian. Filming in Canada is not the same as using Canadian resources, recognizing Canadian intellectual property rights and fulfilling very specific regulatory criteria.
Yet only Canadian broadcasters and distributors must check these boxes despite having to compete directly with the online giants. Global OTT players do not support local TV and radio stations from British Columbia to Newfoundland, nor do they specialize in professionally researched and produced local news and journalism so critical to audiences – and our democracy – in communities, regions, provinces and territories throughout the country.
Bill C-10 will hopefully set in motion further changes by the CRTC that could strengthen local TV and radio and rebalance outdated regulatory obligations at a time when the important contributions broadcasters make to Canada’s social, economic and political fabric are increasingly vulnerable.
Increasing but also rebalancing the distribution of support for Canadian programming and news content would provide Canadian media companies and broadcasters with greater flexibility to respond to the changing marketplace for local TV and radio. It would provide incentives for OTT players like Netflix, Disney+ and others to do what they already do very well but with even greater emphasis on producing content that is more inclusive and reflective of Canadian stories, voices and cultural values. It would also inject additional funding for Canadian broadcasters and producers to tell meaningful Canadian stories to us all while, at the same time, providing a path to future financial sustainability.
The result? A more level playing field between OTT providers and Canadian broadcasters and distributors, more content from Canadian producers and more support for local news produced by Canadian companies, for Canadians.
Robert Malcolmson (above) is chief legal and regulatory officer, Bell Canada.
