Catching Up on MediaPolicy – local television subsidies – Google re-ups in Australia – Music labels angry at CRTC levy – NBA rights go to Amazon – How to fix the CBC

July 27, 2024

This week MediaPolicy posted again about local television news.

The occasion is that the CRTC is kicking off a new proceeding to reconsider the Independent Local News Fund. The gist of the post is to observe that it’s a very difficult task and asks the disruptive question: who needs news journalism subsidies more than others?

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There is a report out of Australia that Google has renewed its three-year licensing deals with news outlets, keeping the platform from being regulated by the News Media Bargaining Code, the equivalent of Canada’s Online News Act. It’s five year deals don’t expire until 2026. The recent renewals are for recurring one-year terms, inviting some reading of tea-leaves as to Google’s long term intentions. 

The value of the deals are not being released, consistent with Google’s strategy of keeping the public, governments, and news outlets in other countries guessing about the value of compensation.

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The CRTC’s June 4th ruling on audio streamer contributions to Canadian media funds was pegged at an unexpectedly high 5% (reduced to 4.65% if you deduct the portion that can be withheld by streamers to spend directly on Canadian music). 

If you listened to Michael Geist’ recent podcast interview of ex-Spotify chief economist Will Page (I recommended it last weekend) you know that the streamer industry believes the 5% contribution is outrageous and could provoke global music streamers to at best raise subscription prices or at worst exit the Canadian market. 

This week the global music labels chimed in: here is a statement from Music Canada’s Patrick Rogers making the same prediction. 

My own view is that the 5% is too high, although I haven’t written at length about that (another day). But note that the streamers and labels are not offering to match lower contributions to any special efforts to make Canadian music discoverable. That’s how Canadian radio does it.

As for the audio streamers’ ability to absorb the 5% hit, obviously the Tech conglomerates YouTube, Apple TV and Amazon are able to fight for market share with no expense spared. On the other hand, the industry leading Spotify does not enjoy that advantage. Instead, Spotify has been raising prices and laying off staff. Its most recent quarterly disclosure announces a 29% profit margin.

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The National Basketball Association has refused to renew its television deal with TNT Sports (owned by Warner Brothers Discovery).

TNT has held the rights for 40 years and was coming off a nine-year deal that included a right-to-match any better offers. Warner said it matched the new offer from Amazon, Disney and Comcast’s NBC Universal. The league said it didn’t. They’re off to court.

Major league sports programming is the biggest and most reliably monetized content in television. So much so, that sports-only streamers like DAZN have driven the value of rights steadily upwards. The Big Tech streamers are also in the rights bidding picture, nibbling away. This is a big bite. If Amazon wins this fight, look to other streamers to up their game.

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The great CBC rethink is picking up steam among policy commentators. There’s an intelligent piece from David Skinner here. It touches on too many important ideas to summarize, but it’s well worth the five minute read. 

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Errors, omissions, and corrections: three of them in one week (but only one is my fault!).

• In a post last week MediaPolicy analyzed an opinion poll conducted by Public Square on behalf of The Hub. My post noted the nefarious fact that only six of the 24 questions —-the Hub article said there were 24 in all— were published. After publication, the good folks at The Hub clarified that the “24 questions” included multiple choice questions. The Hub sent me the full results and indeed no questions or answers had gone unpublished. 

• In previous posts I estimated that the $200 million figure provided by the CRTC as the total amount of annual streamer contributions to Canadian media funds was likely divided $150 million for video and $50 million for audio. My estimate was an extrapolation from 2022 data available on the CRTC website. When I asked the CRTC to confirm or clarify the $150 and $50 million figures, its spokesperson declined to comment. However in the Commission’s recent Notice of Consultation concerning the Independent Local News Fund, it specifies that the 1.5% tranche from the video streamers’ overall 5% contribution is worth $42 million. Doing a little math, that means the overall video streamer contribution is $140 million, not $150 million. While I am on the subject, I should remind readers that the CRTC’s ruling allow streamers to hold back a portion of the levy to spend directly on their own Canadian content: 1.5% of 5% for video and 0.35% for audio. Accordingly, the contribution figures of $140 million and $60 million will be lower. 

• I made a howler of a typographical error in my Friday post, it will amuse you. Here’s the corrected sentence, the bold text was missing in the original: “Finally, a third very taboo question is not asked: what’s an “underserved market” after Pierre Poilievre’s Conservatives follow through on their promise to close English-language television CBC stations?”

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