Panel report targets foreign players, but Murphy urges caution
TORONTO – Doug Murphy said he appreciates the recommendations of the government-appointed panel tasked with reviewing Canada’s communications laws, but the Corus Entertainment president and CEO urged caution about the regulatory pressure it may add to Canadian broadcasters.
“It looks like this report is calling for even more regulation and more regulatory burden,” Murphy said in a phone interview on Friday. “What we cannot have happen here is more regulatory burden on the incumbent actors – that’s not acceptable.”
Murphy, like others, is still sifting through the 235-page report, released Wednesday, which contains 97 recommendations for government action, including bringing foreign players under broadcast regulations, eliminating CBC advertising, and making Canadian content more prominent. While the promise of a more level playing field with foreign media players is welcomed – Murphy said the government must focus on regulating foreign players while reducing regulatory pressure on domestic players.
“For every new regulation that they put on the foreign guys, they should take one off the incumbent broadcasters.” – Doug Murphy, Corus
“For every new regulation that they put on the foreign guys, they should take one off the incumbent broadcasters because we are desperately overregulated,” Murphy said. “We need more flexibility, we need more incentives – get rid of old quotas, get rid of obligations, let us be market driven in our activities.”
Operating as a pure content player, Corus has had its share of ups and downs over the past couple of years. While it’s been able to stabilize and even increase TV advertising revenues throughout 2019, according to its quarterly earnings, it’s still exposed to a rocky advertising market as foreign over-the-top streaming services flood the Canadian market and draw eyeballs.
Murphy said he’s not surprised by the recommendation to bring foreign players under the Broadcasting Act because it had already been recommended by the CRTC’s 2018 report called Harnessing Change.
“I’m pleased that there appears to be genuine efforts to level the playing field and I think that’s important,” Murphy said. “Paying sales tax is something the ministry of finance should be collecting.” Saskatchewan and Quebec already require streaming services like Netflix to collect and remit sales tax, but that rule hasn’t been adopted at the national level.
Murphy also said the panel recommendation to merge Telefilm with the Canada Media Fund — in order to introduce a new financing model to support the creation, production and discoverability of Canadian content – is a good idea, but things need to go further.
He recommended the government do away with the current point system which determines what is Canadian content and therefore what gets funding. Right now, productions must have a Canadian producer and other roles filled by Canadians — for example, a Canadian director and screenwriter would each count as two points — toward the minimum six points out of a 10-point scale. Murphy said there should be a sliding scale that allows more flexibility, optimization and the ability to compete on a broader scale.
“We can optimize our opportunities to bring Canadian talent, whether or not they’re writers or directors or producers or actors, musicians…but also we can package those Canadian points with a strong U.S. lead, a great U.S. director, and have a better chance for international success of Canadian content,” Murphy said.
“We need to permit an opportunity in Canada for broadcasters to make bigger bets on content and that requires a complete rewrite of the points system.” – Murphy
“We need to permit an opportunity in Canada for broadcasters to make bigger bets on content and that requires a complete rewrite of the points system,” he said.
On Monday, following an ambiguous weekend interview in which the topic of licensing of news organizations emerged, Heritage Minister Steven Guilbeault clarified his comments by saying that news outfits would not need to be licensed to operate, nor would the government get involved with determining what content should be considered good or bad.
The report recommends bringing bigger foreign players under the system and requiring them to have “discoverability” thresholds for Canadian content, or to making more prominent that kind of content.
The report recommends that there be “sustainable funding” for a “wide range of news sources,” creators of news be “compensated for the use of their original content by online platform providers,” an expanded mandate for the CBC/Radio-Canada but a gradual phase-out of its advertising, and allowing broadcasters to be eligible for a $595-million, five-year tax credit plan for newspapers announced by the federal government in 2018.
Murphy said private broadcasters such as Bell-owned CTV and Corus-owned Global are also “phenomenal” news organizations, whose fundamental regulatory goal should be to provide accurate and well-researched reporting, adding the discussions about protecting and funding news “must include private broadcasters” and that “needs to be unpacked a little bit.”
However, another unanswered question emanating from the report is how the CRTC – which would be renamed to the Canadian Communications Commission – would define what is considered a media organization in order to absorb them into the broadcasting system. Murphy said that’s a “regulatory burden” that appears “wholly impractical and probably unmanageable.”
The panel recommends making obligations dependent on the category of media, which includes curators, aggregators and sharers of content.
One of the things missing in the report for Murphy was that tangible benefits were not addressed in the report. Tangible benefits are cash which is required of a company that purchases another broadcasting entity, which then goes to improve the broadcasting system as a whole – for example, by allowing public interest groups to participate in CRTC hearings.
Murphy said it doesn’t make sense to have tangible benefits when “Netflix is the biggest broadcaster in any given day of the week.” He also expressed concern that the CRTC’s over-decade-old policy on “diversity of voices,” which limits broadcast acquisitions to a certain percentage of the national audience on linear TV, was not addressed in the report.
Now that the report is out – almost exactly a year after the panel received submissions – Murphy believes the “hard work starts now.
“It’s what is the government prepared to do, what does the legislation look like, how quickly can we bring it to the floor,” Murphy said, “and all of us are going to be talking to the government now about which parts of the report we think are doable/workable, which parts of the report we think needs a lot more thinking through…we’re not going to be able to do 97 things. So we need to really hone down and address what the priority things are and then through another filter, what is actually doable.
“So I think we have to boil down and work in concert with the broadcasters, producers, industry stakeholders, the government – not just Heritage, should be ISED, should be finance as well – and we have to move very quickly to bring forward an impactful, easy to understand, easy to implement, sea change of the existing regulatory bargain and it’s got to be done with precision and alignment with the stakeholders and quickly.”
