New approaches are needed to maximize opportunities of the digital era, says CRTC

As consumption of audio and video content shifts to digital, all services should contribute to ensure a vibrant domestic market

OTTAWA and GATINEAU, QC, May 31, 2018 /CNW/ - The CRTC today published a digital report on the future of programming in Canada. The report proposes to the government new tools and regulatory approaches to support the production and promotion of audio and video content made by and for Canadians.

The Internet plays a central role in the emerging digital media environment. Although traditional services will continue to evolve and play an important role, that role will become smaller in the coming years. Canadians will rely more and more on the Internet to discover and consume music, entertainment, news and other information.

New and innovative approaches are required to support content made by Canadians and ensure they can seize the many opportunities made possible by the digital era.

The CRTC proposes that any future policy approaches to content and its distribution should:

• Focus on the production and promotion of high-quality content made by Canadians that is discoverable by audiences in Canada and abroad.
• Recognize that there are social and cultural responsibilities associated with operating in Canada. All players benefitting from the Canadian broadcasting system should participate in an appropriate and equitable manner.
• Be nimble, innovative and continuously capable of rapidly adapting to changes in technology and consumer demand.

In its report, the CRTC sets out certain policy options that could help ensure a vibrant domestic market, including:

• Replace prescriptive licensing with comprehensive and binding service agreements for all video and audio services offered in Canada and drawing revenue from Canadians.
• A restructured funding strategy to ensure sustainable support for content production and promotion in the future, including the participation of television service providers, radio stations, and wireless and Internet service providers.
• The development by government, in consultation with stakeholders, of national and cross-sectoral strategies.

Please see the backgrounder for further details.

Quote
"Canadians have access to a wide range of content on multiple online platforms, as well as through traditional radio and television services. While this evolution is a good thing, it has an impact on the traditional model that was designed to provide support for programming made by and for Canadians. At the government's request, we have looked at how our stories can continue to be told and our broadcasting system can remain vibrant. Our digital-first report identifies possible options for a future where high-quality Canadian content continues to be produced, promoted and discovered."

Ian Scott, Chairperson and CEO of the CRTC

Quick Facts

• The government requested that the CRTC submit a report on future distribution models for Canadian programming, as well as whether they would ensure a vibrant domestic market for its continued creation, production and distribution.
• The CRTC held two public consultation periods, conducted public opinion research and reached out to multiple stakeholders to ensure this report provides a fact-based picture of the present market and where it may be going.
• This report offers important context and policy options to inform the government's review of the Broadcasting Act and the Telecommunications Act.

Related Products

• Digital report
• Backgrounder
• CRTC 2017-359 - Call for comments on the Governor in Council's request for a report on future programming distribution models
• Order-in-Council P.C. 2017-1195
• Creative Canada Policy Framework
• Broadcasting Act
• Public Opinion Research Report

Backgrounder

Conclusions

Traditional television and radio services are mature sectors, and some segments are in decline?not necessarily a steep decline, but an evident one. The economics of financing production means that a declining traditional system may be unable to support the production of important programming and promote and make it discoverable by Canadians.

Fostering a spirit of innovation and helping to build a vibrant domestic market in the future?including the new industries and jobs that the Canadian economy will rely on?will require action and investment by governments and all other stakeholders.

A future legislative, policy and regulatory approach to content and its distribution should:

• Focus on the production and promotion of reflective, informative and entertaining high-quality content by Canadians that is discoverable by Canadians and the rest of the world
• Recognize that there are social and cultural responsibilities associated with operating in Canada and ensure that all players benefitting from Canada and Canadians participate in appropriate and equitable?though not necessarily identical?ways to benefit Canadians and Canada
• Be nimble, innovative and continuously adaptable to change

Options

Replace prescriptive licensing with comprehensive and binding service agreements that incorporate all players

• Future legislative approaches should clearly and explicitly make any video or audio services operating in Canada subject to the legislation and incorporate them into the system.
• This approach recognizes that there are social and cultural responsibilities associated with operating in Canada.
• Moreover, it would provide the ability to adapt to the marketplace through customization, incentives and other tools. It would also provide more levers and support for local news, French-language content, and other public interest priorities.
• Such agreements should be subject to public scrutiny and set out specific binding commitments applicable to the service group.
• Legislation adopting this approach should include the necessary and sufficient powers to transparently implement and ensure compliance with agreements and the binding commitments set out therein. These tools could include the ability to assess monetary penalties in instances of non-compliance.

Restructured funding strategy

• The way Canadian-made content is funded is unsustainable because it relies on traditional supports that are in decline (i.e., contributions by cable and satellite companies for video; contributions by radio stations for audio).
• A restructured funding strategy should include a broader number of participants, and be equitable and sustainable. It could integrate, or at a minimum align, the federal government's existing contributions for audio and video content.
• An integrated fund could also be supported through contributions by all broadcasting and broadband connectivity services (television service providers, radio stations, and wireless and Internet service providers), all of which benefit directly from the distribution of audio and video content.
• Such a fund could support content production, promotion and distribution without diminishing support for broadband development in underserved areas. It would be a reallocation of existing contributions without new costs to consumers.
• The restructured funding strategy would collect the same amount of monies over a broader range of services that better reflect today's listening and viewing behaviours.
• If such a fund is created, the manner in which funds are allocated should be the subject of future public discussion, but should include a minimum allocation of funding for:
• Canadian audio content production and promotion;
• French-language video and audio content; and
• Content by and for Indigenous peoples and official-language minority communities.
• This public discussion should also consider the possibility of funding the following, which are not currently supported or unlikely to be adequately funded in the future:
• Content produced in-house by programming services or by affiliated producers;
• Direct promotion of Canadian audio and video content;
• Direct support of new and emerging artists and creatives; and
• Audio and video content in languages other than French, English or Indigenous languages.

National strategies
To better address future opportunities and risks facing the content production, promotion and distribution industries in Canada, the government could consider developing, in consultation with stakeholders, national and cross-sectoral strategies intended to:

• Enable the export of Canadian French and English-language audio and video content, along the lines of the recently announced Department of Canadian Heritage export development strategy.
• Place Canadians at the forefront of new technological developments, such as in artificial intelligence, search, algorithms, digital advertising and the use of blockchain technologies, through the development and funding of academic or research programs and investment in these new technologies.
• Develop inclusive leadership in key creative positions that is gender-balanced and represent Canada's multicultural nature in both the French and English-language markets.
• Develop improved data collection programs for audio and video content that use new technologies to better manage and monitor exploitation and monetization of content rights.

Short to medium term steps
The CRTC could consider a number of interim measures to address some of the issues identified in the report:

• Re-examine the regulatory approach to radio so that it contributes to the promotion and presentation of Canadian artists and music in the digital environment.
• Examine ways to support television news production through increased access to subscription revenue.
• Re-examine the existing regulatory approach to online television service providers.
• Consider the introduction of group-based approaches to the licensing of radio stations and television service providers.
• Consider new approaches and technologies to identify and track content to provide improved data analytics.
• Update definitions of Canadian Program Expenditures in light of the digital environment.

Additional activities could be undertaken in collaboration with other organizations, but may also entail legislative changes:

• Examine how best to remove barriers to funding online-only or online-first video content production and promotion.
• Examine the current definitions of audio and video Canadian content and the certification process with a view to updating them to reflect the new realities of digital production and ensuring that they provide the best combination of supports and incentives for the future environment.

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SOURCE Canadian Radio-television and Telecommunications Commission