Catching Up on MediaPolicy – Online Harms bill is here – EU takes on the global music streamers – the end of broadcasting cross subsidies

March 3, 2024

The federal Online Harms Bill C-63 was unveiled last week in the House of Commons. 

It is at least two bills in one. The first is the government’s do-over of making social media platforms take more accountability for harmful content. This “duty of responsibility” approach is self regulation: the platforms will have to develop transparent content moderation policies and then live up to them or face large fines. The focus is on revenge porn, harm to children, fomenting hate against identifiable groups, and incitement of violence, extremism or terrorism. There is a helpful YouTube review of the bill from experts hosted by Taylor Owen of the Centre of Media, Technology and Democracy.

The other half of the Bill is a reprise of section 13 of the federal Human Rights Act, narrowly repealed in 2013 in a free vote in the House of Commons. It provides a path for Canadians belonging to identifiable groups to go to the federal Human Rights Commission with a complaint against hate speech over the Internet:

13 (1) It is a discriminatory practice to communicate or cause to be communicated hate speech by means of the Internet or any other means of telecommunication in a context in which the hate speech is likely to foment detestation or vilification of an individual or group of individuals on the basis of a prohibited ground of discrimination.

There is a definition of “hate” set a high threshold:

hate speech means the content of a communication that expresses detestation or vilification of an individual or group of individuals on the basis of a prohibited ground of discrimination. For greater certainty the content of a communication does not express detestation or vilification…solely because it expresses disdain or dislike or it discredits, humiliates, hurts or offends.

Notably, none of this applies to federal broadcasting. 

That’s interesting because so far the CRTC has not shown any interest in extending its television and radio rules —-prohibiting “abusive comment” directed at identifiable groups or “misinformation” —- to Internet streamers like Netflix, Crave or US news networks. 

Additionally the Online Streaming Act specifically rules out applying these content regulations to social media platforms when they act as broadcasters. During the debate on Bill C-10 in 2021, Liberal MPs deflected attempts to amend the bill on the grounds that harmful content on YouTube would be covered in Bill C-63. It now appears that the remedy for this harm will be left to individual Canadians bringing human rights complaints against the uploader, not the social media platform. In fact, social media platforms and ISP providers are expressly exempted from liability under the Bill.

And finally it should be noted that if the targeting of harm does not fall within the traditional catchments (gender, race, sexual orientation, etc), there can be no complaint. For example, the vilification of politicians, journalists or health professionals is not regulated. 

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There’s plenty of regulatory activity in Europe over music streaming. 

The EU Parliament overwhelmingly passed a resolution —-setting the stage for a binding Directive at some point in the future—- that could require streamers like Spotify and Apple to make their algorithms sufficiently transparent so that artists can verify whether their songs are being repressed. As significant, the EU resolution calls for greater distribution and prominence of European songs on global platforms making music available in EU countries. This suggests that if the major streamers don’t improve the exposure of local European music the EU will replicate its 2018 Directive for video streaming that included inventory quotas and prominence requirements.

As usual, the French government is already ahead of the EU Parliament. In 2023 it passed legislation requiring streamers to pay a content tax to support French music. A government report later suggested 1.75% of revenues as the right amount: Spotify responded by cancelling its support of French music festivals.

None of this has escaped the attention of Québec Culture Minister Mathieu Lacombe, as MediaPolicy reported previously. Lacombe is looking for CRTC action on the discoverability of French language music and, if that doesn’t happen, he is considering a variety options including a streamer tax or a discoverability law. Either brings him into a constitutional confrontation with Ottawa’s exclusive federal power over broadcasting. 

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The CRTC released your mandatory bedtime reading, the Aggregate Financial Returns of Canadian broadcasters. The reports for 2022-23 are a jolt and put in perspective the considerable noise the Canadian broadcasters have been making in demanding regulatory relief from their obligations to make Canadian programming (effectively a $2 to $1 ratio in making Canadian content versus buying American programming).

Regulatory insiders have long described the business model of the large English language broadcasters —Bell Media, Rogers, and Corus— as relying upon the cross subsidy of their specialty television channels laden with cheap and popular American programming to pay the bills for their expensive Canadian news, sports and entertainment which is difficult to monetize outside of our small domestic market.

What’s changed in the last ten years is that the pool of specialty television profits has shrunk while on the other hand the advertising market for Canadian content on conventional network television has plummeted. The 2023 results are really bad.

Here are some numbers demonstrating that:

In 2018, Bell Media made $201 million in net income on its specialty channels while losing $69 million on conventional television (most of which is news). By 2022 its specialty division made $310 million but lost $95 million on conventional. In 2023, its specialty free fell to a $121 million profit. Its conventional losses rocketed to $205 million. For the first time, Bell Media’s combined specialty and conventional television is in the red, an $84 million loss.

In 2018, Corus specialty channels made $167 million in net income but lost $64 million on conventional. By 2022 its specialty profit was $66 million while losing $110 million on conventional for a combined deficit of $54 million. In 2023, its specialty channel profits were flat, losing $420,000. It lost $124 million on its Global network for a combined television loss of $125 million.

The sports-focussed Rogers Media is still in the black with a $50 million profit in 2023 for combined specialty and conventional television. That’s down from $121 million in 2018.

Another factoid is that all three broadcasters, and add Québecor’s TVA here, have held the line on news spending over the same period of time, although there is a modest decline once inflation is factored in.

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If you are looking for something quick and interesting to read, there is a handy book review of Kara Swisher’s Burn Book: A Tech Love Story, thanks to the Globe’s tech beat reporter Josh O’Kane.

Swisher has been the US’s best known tech journalist over the past three decades. She enjoyed a lot of access to the Silicon Valley heavyweight bros. It seems she can’t abide them any longer.

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