By Jonathan Daniels, pictured above, vice president of regulatory law at Bell
The CRTC recently announced the first round of consultations on the implementation of the recently adopted Online Streaming Act. Of the three sectors affected by this legislation – foreign streamers, Canadian producers and Canadian broadcasters – it is clear that broadcasters are the group in crisis mode.
It goes without saying that foreign streamers like Netflix are flourishing in Canada. Their success has benefited Canadian producers. The Canadian Media Producers Association recently noted that “in almost every way, [last year] was a record year.” Meanwhile, broadcasters are struggling.
The challenge we are facing is an outdated and rigid CRTC regulatory framework that does not allow us to respond quickly to massive shifts in the industry and the way Canadians consume content.
The CRTC’s consultations are intended to ensure that foreign streamers finally contribute to the Canadian content system. This is important, no question. But the commission is so focused on this point that it has ruled out any immediate reductions to broadcaster licence obligations. We think they have their priorities backwards.
To address our concern, Bell Media has applied to the CRTC to ask for immediate amendments to certain conditions of licence related to our TV stations. What we are asking for is simple: a decrease in our required Canadian programming expenditure and for the Commission to address imbalances with other industry players. Other private broadcasters like Corus and Québecor have made similar applications – each with their own unique remedy. The changes we are seeking may be different, but we are all driven by the same market realities.
Normally, we would seek such changes as part of our licence renewal process. However, our TV licences, last issued in 2017, were automatically renewed last year until September 2024 – without any opportunity to request changes.
This is too long to wait in the face of a rapidly changing market landscape. Many of the foreign streaming services that we are competing against today, like Disney+ and Paramount+, did not even exist when our licence was last renewed. Those that did exist, like Netflix and Prime Video, were not nearly as large or as ubiquitous as they have become.
According to the CRTC’s Communications Marketing Report, estimated revenues for online streamers were just $600 million in 2012. By 2021, they had jumped a whopping 750 per cent to $5.1 billion. Further, the Media Technology Monitor reported that, in 2012, just five percent of Anglophone Canadians were watching TV online exclusively. In 2021, that number sat at nearly a quarter. Over the same period, conventional television revenues decreased by 26 per cent.
If we are able to compete, we need a level playing field. Relief from local programming obligations in line with what was provided to CBC/Radio-Canada would make a real difference.
Our 35 local television stations are reliable windows into the communities they serve and share important local perspectives on the national and international stories that affect us all. That will continue with or without codified obligations.
Billions of dollars in revenue has migrated away from traditional media and the TV audience has fragmented. Many broadcasting organizations have had to make difficult cuts, including staff reductions.
While the Online Streaming Act is a positive step forward in addressing the issues broadcasters face, based on the CRTC’s current approach, change will not come fast enough.
Bell and other Canadian broadcasters are well aware that our collective work of building a modern and nimble broadcasting framework is just beginning. In the meantime, the delays in granting any interim relief have had an impact on our bottom line and have caused an imbalance in the sector. We cannot afford to wait any longer, we need the CRTC to provide relief now as we all work together to shape our industry’s future.
Cartt accepts commentary from informed observers of the telecommunications and broadcasting industry. The views reflected in these pieces do not necessarily reflect the views of Cartt. Pieces for consideration should be sent to editorial@cartt.ca.
