Yale report a month on: The good, the bad and a quid pro quo?

Column: Irene S. Berkowitz examines the long-term implications of the BTLR report for Canadian media makers.

irene berkowitz It’s been four weeks since the release of Canada’s communications future: Time to Act, the final report from the Broadcasting and Telecommunications Legal Review Panel (BTLR). The Yale report was Canada’s fourth federal inquiry into digital disruption since 2013, preceded by Let’s Talk TV (2015), Creative Canada (2017) and Harnessing Change (2019).

This report is 235 pages with 97 recommendations for Canadian media institutions, consumers, and content. It was released with much fanfare just before the Canadian Media Producers Association (CMPA) annual confab in Ottawa, Prime Time 2020. If half as important as the hype implied, the Yale Report should still warrant our attention. What are its longer-term implications for Canadian media makers?

It includes benign recommendations, such as the harmless idea to rename CRTC as CCC (Canadian Communications Commission). It wisely recommends merging CMF and Telefilm, because content is length agnostic today. It suggests GST/HST be collected on global screen services, a consumer tax that does not directly impact Canadian media makers and has been implemented in Quebec, where it was  “spectacularly successful,“ and other North American and global jurisdictions.

Its key recommendation may be to transform CBC to a non-commercial service, which seems essential for Canada’s global brand in the global, online era. Our government’s attention, including that of CRTC, may have already moved on to focus on this job, via its upcoming CBC consultation; comments closed last week. Successfully reimagining and retooling CBC for the 21st century seems an urgent priority and an absolutely enormous task. How great could it be if Canada gets this right.

Upon release, the report took the most heat about recommendations No. 55, 56 and 64. (No. 55 says the Broadcasting Act should be amended to establish that the legislation applies to entities that don’t have operations in Canada; No. 56 advises that a registration process be created for OTTs; and no. 64 says the CRTC should use its power to collect data from online services).

Positioned in the content section, these curiously placed suggestions appear to walk back promises to consumers elsewhere in the report (and previously promised to Canadians for two decades): Universal access to an open, neutral, global Internet. They appear to suggest CRTC powers be expanded to include, register, and potentially regulate the Internet, or about 1.5 billion sites (hey, only 200 million are active).

But let’s set aside this contention – just for the moment – while we examine the report’s other content recommendations. We’ll return to it.

There appear to be errors of analysis around three terms: content, contribution, discoverability – as well as omissions.

CONTENT

Words like alphanumeric and audiovisual are circa early-twentieth century. They set an old-school vibe; do they mean text and video?

No. 51 [that the Broadcasting Act should make "alphanumeric news" available to the public] content defines programs as media intended to inform, enlighten and entertain. This phrase from the extant Broadcasting Act was incomplete in 1991 because it omitted to sell. Today, ads get awards and millions of views on YouTube as stand-alone content. What of Amazon.com or fashion runway videos, among countless e-commerce sites and content marketing programs?

Another obvious purpose – to connect – applies to Facebook, Uber, AirBnb, and more.  What about to persuade, like the doctored Pelosi video that Facebook and Twitter recently refused to take down, a drop in today’s tsunami of pernicious disinformation?

A 20th century phrase no longer defines program. The point is that boundaries between genres are forever blurred. New forms and purposes are constantly invented.

No. 54 parses media into three confusing categories: Curation, aggregation, sharing. To me, there seem to be two: content distributors and content manufacturers. These functions have mutual need and zero value alone, per Marshall McLuhan on medium versus message.

CONTRIBUTION

Specious logic swirls around contribution. Many global media services are not yet clearly profitable, whether monetized via subscription or advertising. Assuming new legislation could grant our government uncontested right to levy foreign companies, implementation could require assigning separate value to each of the two functions in a subscription, such as Netflix’s cost of content distribution versus manufacturing. Not easy.

In the case of YouTube’s advertising model, the platform’s annual maintenance contribution exceeds US$6 billion. Assessing additional contributions could require summing production budgets of Canadian ads; advertising employment including spin-offs such as MCNs; production budgets of Canadian videos; as well as estimating on- and off-platform earnings of YouTube producers; and volume of jobs created. The last two data sets are in Ryerson University Audience Lab’s Watchtime Canada 2019. I was lead on that study and can affirm that examining the totality of the above data would be a task. That’s just for one platform.

There also seems a conceptual error in recommendation 60, which suggests all media content undertakings that benefit from the Canadian media communications sector should contribute to it. Legacy broadcasters benefit from the regulatory bargain whereby a 30% audience boost from simultaneous substitution is granted in return for a 30% spend on Canadian content. This renders legacy contribution a net zero while brilliantly delivering cross-subsidization of Canadian content – thanks to the popularity of Hollywood hits. In comparison, OTTs compete for Canadian audiences with zero regulatory benefit.

Sourcing contributing funds seems problematic. Double-digit profits from broadband and wireless distribution are replacing cable. Owned by the same horizontally integrated conglomerates, creative destruction of delivery technology is no harm, no foul – to them. Could a fix for Canadian content funding be to substitute the 5% cable contribution with 2.5% from broadband and wireless?

And is employment a contribution? As noted at Prime Time 2020, thanks to global manufacturers, the production sector “has never been more buoyant.”

DISCOVERABILITY

No. 64 considers discoverability, a word misappropriated by Canada since 2014′s Let’s Talk TV. A TV remote is an infuriating, ancient way to discover a show that a viewer wants to watch. Discoverability, fancy for “searchability,” was identified by Hollywood as TV’s No. 1 threat and if unsolved, there would be no No. 2. Interpreting discoverability as obligation to prioritize unpopular content reminds me of a statement by former CBC head, Robert Rabinovich in the 2001 Lincoln report: “Nobody can make anyone watch anything and nobody wants to.”

OMISSIONS

There’s no mention of the plan underway and due out this year from Organization for Economic Cooperation and Development to synchronize 137 nations, including Canada, via strength in numbers to address taxation of global services.

Also MIA are recommendations for measurable content outcomes, such as market performance, in an era when popularity is content’s sole mode of survival, and arguably always has been.

No. 69 [that tax credits and funds are platform-agnostic and are accessible to all Canadian production companies, whether independent or broadcaster affiliated] does mention an urgent policy innovation – platform agnostic funding – but omits producer access and sliding-scale audience incentives per my published version.

No. 55 seems overlooked. Could removing Canadian ownership allow our media conglomerates to sell out?

QUID PRO QUO

Now reconsider No. 56, 60 and 64. Their placement in the content section suggests a quid pro quo, which translates to this for that.

While appearing to empower CRTC to break promises to Canadian consumers, is their real purpose to empower CRTC to seek subsidies to content makers according to policies that don’t achieve 21st century goals? Very crudely: A money grab?

There are 37 million Canadian media consumers. There are about 179,000 jobs in our TV/film sector, about 1.2% of Canada’s 15.45M jobs. Only about a third of this work is on official Canadian content, the main arena that benefits from subsidies.

Many Canadian workers have been disrupted by digital, but thanks to digital, Canadian media manufacturers have never been busier. The Toronto Film Office even has a program to retrain workers from declining manufacturing sectors for jobs in TV/film.

For perspective on this 2020 report, consider these 2013 words of then CRTC Vice Chair Telecommunications Peter Menzies: “We can no longer define ourselves as gatekeepers in a world in which there may be no gates. How can we act as an enabler of Canadian expression, rather than as a protector? How can we shift our focus from rules and processes and procedures to outcomes? How can we help Canadian creators take advantage of all the opportunities in the new global environment, in which opportunities may exceed threats?”

Remarkably, these words precede Let’s Talk TV. Could they guide the work ahead to create bold media policies for Canadian media in the global, online era?  I hope so.

Irene S. Berkowitz, PhD is Ryerson University’s Policy Research Fellow in the Faculty of Communication and Design (FCAD) and Instructor in Ted Rogers MBA.