The Canadian Association of Broadcasters (CAB) said there is a risk of more job cuts if traditional broadcasters are required to make the current level of contributions to the system, in its remarks to the Canadian Radio-television and Telecommunications Commission (CRTC) at the Path Forward hearings in Gatineau, Que..
“The entry of foreign streamers into the Canadian market has fundamentally disrupted the very business models that permitted us to make the level of contributions we’ve been making,” said Tandy Yull, VP, policy and regulatory affairs at CAB, adding that “it’s just no longer sustainable and, kept to the same level of obligation, I think we may see more cutbacks, more layoffs, possibly even more closures.”
Yull was accompanied on Thursday (Dec. 7) by CAB president Kevin Desjardins, who said “what foreign players are drawing out of Canada is too far out of balance with what they return.”
Desjardins argued that foreign streamers have benefitted from “unfettered” access to the Canadian marketplace for a decade and their revenues here “help them play” globally. “Yes, they do produce programming here in Canada for an abundance of very good reasons that make great business sense for their companies’ bottom lines, but not necessarily in support of Canadian public policy,” he said.
CAB proposed the Commission should require large, standalone online undertakings — those not affiliated with Canadian broadcasters and with revenues of more than $50 million — to make contributions to specified funds immediately.
Desjardins said the trade association “wholeheartedly” opposed suggestions by the streamers to delay the application of these requirements and urged the Commission to not add additional obligations to the local broadcasters in the first phase of consultations.
For online undertakings that operate like broadcast distribution undertakings (BDUs), such as aggregators, CAB recommended contribution obligations of 5%, similar to those applied to Canadian BDUs. CAB said online services which operate like audiovisual programming undertakings, such as Netflix, Disney+ or Prime Video, be subject to contribution levels of 20%, similar to those applied to Canadian television undertakings.
CAB also made the case for urgent support for news, proposing that at least 30% of the financial contributions of large standalone online undertakings be directed to a fund that supports the production of news and information programming by Canadian radio and television broadcasters.
“If you ask Canadians, ‘what is the Canadian content that you seek out?’ The number one piece of Canadian content that Canadians are looking for is the news,” said Desjardins.
CAB proposed that another 5% should be put towards funds that support equity-deserving groups, including Indigenous, Black or other racialized communities, Canadians of diverse ethnocultural backgrounds, persons with disabilities, and the 2SLGBTQI community; and 5% to public policy objectives, including the Broadcast Participation Fund and the Broadcasting Accessibility Fund (BAF).
The remaining portion would be directed to existing funds such as the Canada Media Fund (CMF) and Certified Independent Production Funds, and FACTORCanada, Musicaction and Radio Starmaker Fund and Fonds RadioStar for music.
Representatives from Telus Communications proposed that Canadian virtual BDUs be temporarily exempt from contribution requirements to allow for the growth of “these nascent Canadian services.”
Telus proposed an initial base contribution of 3% for online undertakings, but called for a decrease in the contribution level of 5% imposed on traditional BDUs.
Lecia Simpson, director, broadcasting policy and regulatory affairs at Telus said traditional BDUs were seeing declining revenues and could not be expected to continue fulfilling their current levels obligations and contributions.
Speaking earlier in the day were representatives from OpenMedia and The Public Interest Advocacy Centre (PIAC), and the National Pensioners Federation.
Representatives from PIAC said initial base contributions should be interim until a new definition of Cancon, Canadian programming expenditures and discoverability framework are determined, adding that the initial threshold should be $50 million of Canadian revenues for audiovisual and $25 million for audio-only services.
PIAC counsel Yuka Sai said it was vital for the CRTC to also take consumer privacy and data into their considerations when looking at the incentives foreign online streamers have when they operate in Canada.
“They’re not only benefitting from the subscribership of Canadians and their buying power; they’re also benefiting from their consumer data,” added Sai. “That’s another dimension of value that they’re extracting from the Canadian broadcasting system on top of direct revenues.”
Independent producer and distributor Anthem Sports & Entertainment proposed the creation of an Independent Broadcasters Fund, saying the existing funding system has left out independent broadcasters and created “artificial winners and losers.”
“If the CMF were to start fresh with open access to all broadcasters, no reference to historical spending and no restrictions based on content genre, and a specific amount of funding accessible only to independent broadcasters, we could accept that. But we also acknowledge that the CRTC does not oversee that fund,” said Anthem president Anthony Cicione.
Anthem backed the 5% initial base contribution for streamers, recommending that 25% of these funds be allocated to independent broadcasters “through a mechanism that ensures fast and direct access.”
The Path Forward hearings conclude on Friday (Dec. 8).