By Howard Law
What will “television” look like in 10 years?
Looking into the future of particular services and companies, the Commission expects that vertically integrated companies (companies that own or control programming services as well as distribution services), for their part, will continue to have the opportunity to leverage their resources and audience reach to acquire popular and lucrative programming as well as be well positioned to produce high-quality programming made by Canadians. Their critical mass provides these companies with the financial capital required to succeed both domestically and internationally.
[CRTC chair Jean-Pierre Blais, March 2015]
BARRING SOME UNFORESEEN reversal of political fortune, the Liberals’ digital reboot of the Broadcasting Act will become law with the support of the Bloc and the NDP.
The question is whether Bill C-11 will accomplish its goal of maintaining the production of Canadian media content that nourishes our national identity and supports our democracy.
The critics of C-11 focus mostly, as they see it, on over-regulation and threats to freedom of expression.
Still others focus their skepticism on whether a modernized Broadcasting Act can survive disruption by the Internet at all, so is C-11 even worth the effort?
It’s common to hear our regulatory system lampooned as a relic of broadcasting technology, born in the world of scarce radio spectrum. That’s an ahistorical take. The system was highly successful in achieving its goals of funding Canadian content throughout the post-spectrum hey-days of cable and satellite distribution.
But for the CRTC’s exemption of Internet TV in 1999, renewed twice afterwards, Netflix might have found its place as a major US channel on both traditional and online Canadian broadcasting platforms or even partnered with Canadian TV companies.
Nevertheless, Internet technology is a qualitatively different evolution of media distribution technologies. That’s because in spite of creating even more global content gatekeepers it also provides the means to evade gatekeepers by enabling peer-to-peer broadcasting on hosting platforms like YouTube and Facebook.
It’s that evasion of gatekeepers that both thrills Internet activists and threatens the long-term cohesion of a system engineered to make profitable media companies subsidize cultural programming.
But what is “long-term”? What will media distribution look like five years from now, and when will we see what’s over the horizon? It’s hard to fundamentally re-design a regulatory system for a world we can’t see yet.
When CRTC chair Jean-Pierre Blais released his signature “Way Forward” policy ruling in March 2015, he brushed aside requests to end the Internet TV exemption and bring American streaming giants into the CanCon funding system. Instead, he pugnaciously predicted that by 2025 the major Canadian media companies would continue to prosper and cross-subsidize Canadian content.
Only six months later in October 2015 Blais released the Commission’s annual statistical report that illustrated by every industry metric available that the Internet disruption of the Canadian television audience by Netflix and YouTube and advertising revenue by Google and Facebook was well underway.
At the time, the numbers showed $3 billion in annual Canadian programming expenditures (CPE) by Canadian broadcasters and a $464 million CanCon contribution by cable companies.
Six years later in the Commission’s 2021 report, those CanCon numbers had fallen to $2.6 billion CPE and $397 million from cable companies.
Meanwhile, Internet video revenues in Canada had grown to $3.9 billion, a measurement that the Commission hadn’t even bothered to estimate in 2015.
Those numbers suggest a $467 million decline in CanCon contributions or expenditures since 2015, not even taking into account inflation or growth in GDP.
To put that lost $467 million into context, the combined news budget of Canadian private conventional TV broadcasters is $379 million. Or try another metric: $467 million is the production cost of 359 original episodes of Murdoch Mysteries at $1.3 million per show.
According to the previous Heritage Minister Steven Guilbeault, the Online Streaming Act will levy an additional $800 million annually from Netflix and other Internet streamers and hosting platforms, filling the gap for several years.
At the very least, C-11 is the finger in the dike. Let’s hope it holds.
Howard Law was the director of Unifor’s local media unions from 2013 to 2021. He now blogs at mediapolicy.ca.