One broadcasting policy issue that flew successfully under the regulatory radar during the Parliamentary hearings for the new Online Streaming Act was Connected Television.
Connected TV is the terminology used for Smart TVs —or streaming devices attached to stupid TVs— that slip their viewing menus and data aggregation in between the Internet and you through software embedded in the television or a plug-in streaming stick. The TV or stick manufacturer chooses which streaming apps get carried or made visible.
There are different viewership figures available, but about half of Canadians consume programming on smart TVs.
Radio-Canada published a news article earlier this month in which a number of leading cultural voices in Québec questioned why the CRTC was not regulating this programming distribution technology as it has cable, satellite and channel aggregator websites like Roku.
Those voices include Heritage Minister Pascale St.-Onge wondering aloud why the CRTC hasn’t moved on Connected TV (she missed her opportunity to tell them so in her Policy Direction to the Commission on the implementation of Bill C-11).
I asked the CRTC why not and got a polite but terse reply: the Commission “does not regulate hardware.”
***
MediaPolicy has commented more than once on the expectations of the Québec music industry that the CRTC will do something meaningful to compel major streaming platforms to showcase French language songs. Left untended, the issue could be the spark a political confrontation between the federal and Québec governments over the jurisdiction to take regulatory action on this point.
There has always been a split between Québec cultural groups and the leading English Canadian industry voices on this issue of online music discoverability. Outside of Québec, the independent music producers group CIMA supports greater subsidies for music development, but no interference with playlist curation or song algorithms.
Last week the Heritage Minister announced a $16 million budget increase to the Canada Music Fund for the next two years. According to the Heritage website, in 2023 the federal government contributed $57 million for recording, touring, marketing and music video production. That included $43 million in base funding and a $14 million supplement.
The Liberal election promise in 2021 was to increase its contribution to the Music Fund to $50 million.
The federal grants are administered by the non-profits FACTOR in English Canada and MusicAction for French language artists. Radio broadcasters also contribute to the non-profits and it’s likely that music streamers will be levied by the CRTC.
***
The Paramount Global sweepstakes continue in real time with abortive merger talks, the emergence of hedge fund buyers and now frowning bond rating agencies.
Another major US streamer Warner Brothers Discovery is at last launching its direct to consumer Max (a combination of HBO and Discovery) in Europe.
That’s something for Canadians to take note of, as Max has not launched in Canada. Bell Media continues to license HBO and Discovery content for the Canadian cable and streaming market. It’s a big piece of Bell’s successful strategy of making money on American programming and then earmarking some of the profit to lose money on CTV News.
Bell Media’s deal with Warner Brothers was renewed in May 2023 for an unspecified term.
***
I like reading Canadian book publisher Ken Whyte’s Substack blog for a number of reasons, mostly because he likes to set things on fire whenever possible.
This week he’s writing about the impact of AI on Canadian book publishing.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
Earlier this week MediaPolicy published a summary of Leger’s public opinion polling on the federal government’s overhaul of hate speech laws. The Liberals’ new Bill C-63 appears to have captured the public mood, at least for now. (Note: the CBC news story and photo above are from 2014).
The complexity of our existing hate speech laws is considerable. I made up a chart for myself and I am happy to share it with you: buyer beware, I last studied criminal law in 1983. All corrections will be gratefully accepted.
That’s it for this week: I have to prepare for a one-year old’s birthday party. Wish me luck.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
The survey reveals a significant lack of alignment between public opinion supporting the bill and the prevailing criticism of the bill in the news media and various blogs.
The lead poll question is this: Do you support the government’s plan to regulate content on social media to make their platforms safer and to remove harmful or hateful content?
The results were 68% in favour of the bill versus 24% opposed. You can download the report here to flush out the nuances in the responses.
Despite the strong support for the bill, there is anxiety about the impact on freedom of expression. The second question is this: Do you trust the federal government to regulate online content in a manner that protects your right to freedom of expression online?
The result was that 43% trust “the federal government” and 50% don’t. It’s not clear if this is a concern about the effective execution of the bill in practice or which political party is in government.
Even breaking down opinion into the bill’s three constituent parts (criminal hate speech, human rights hate speech and platform regulation), popular support is consistent.
The fourth question about criminal hate speech tends to conflate two distinct offences (hate speech promoting genocide; willfully promoting hate): Do you support the government’s plan to impose stiffer sentences on those convicted of a hate propaganda or hate crime offence, including up to life in prison for advocating genocide? The current maximum penalty is a two year prison term.
The result was 72% in favour and 15% against. I have to say, that one took me by surprise. Life imprisonment.
On to the human rights question: it helps to recall that the bill reinstates the right of Canadians to file anti-discrimination complaints about hate speech to the federal Human Rights Commission, repealed by a free vote of the House of Commons in 2012.
The question is: Do you agree or disagree with allowing people to file complaints about online hate speech to the Canadian Human Rights Commission?
The result was 71% for, 16% against.
An earlier Leger poll found widespread public support for a companion federal Bill C-367 that would repeal the current exemption in criminal hate laws for good faith religious argument (e.g. “God hates homosexuality”).
Back in the late 2000s, there was a lot of public debate about hate speech thanks to some high profile, and unsuccessful human rights complaints, against Mark Steyn and Ezra Levant. In the run-up to the repeal of section 13 of the Human Rights Act in 2012, the human rights law expert Richard Moon submitted an important Report that recommended abolishing section 13 (or alternatively amending it) and relying entirely on Criminal Code hate laws.
I stumbled across an article he wrote, shorter than his Report, that does a great job contextualizing the free speech versus harm debate.
At the risk of simplifying his well reasoned arguments, Moon says that regulation of hate speech should be restricted to incitement or imminent risk of violence (and thus it belongs in the Criminal Code) and that stamping out non-violent harmful speech (which he takes very seriously) would require an intolerable level of censorship to work. That’s why he supported eliminating section 13 of the Human Rights Act.
If incitement of violence were the acid-test of censorship, there is still a debate over what is incitement. For members of those communities who have been the targets of hate and violence for hundreds of years, most hateful speech is a dog-whistle to violence. The virtue of the Human Rights approach over the Criminal Code is that individual Canadians don’t have to ask the Attorney General’s permission to fight it.
***
As I was hitting the “publish” button on this post, over at Canadaland an excellent podcast went up with host Jesse Brown interviewing Ivor Shapiro of the Centre for Freedom of Expression on Bill C-63. Worth a listen.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
The media misery meter spiked again this week as the Atlantic Canada newspaper chain SaltWire announced it was applying for creditor protection. By Wednesday, a court had granted it. SaltWire is the second Canadian newspaper chain to seek creditor protection in six weeks, Black Press did so in January.
SaltWire owns metropolitan dailies in Charlottetown, Sydney, St.John’s and Halifax and a variety of community papers.
There is a backstory of financial miscalculation. SaltWire bought 24 local newspapers in 2017 from Transcontinental, then unsuccessfully launched suit on the grounds that Transcon had withheld damaging information about the state of the business.
The bankruptcy is in response to SaltWire being chased by the financier, Fiera Private Debt, that supplied the cash for the Transcontinental purchase. That’s not the entire story of course. The Fiera debt is at most half of what SaltWire owes to all creditors.
This presents an opportunity for me to plug, one more time, my interview with CEO Jeff Elgie of Village Media, the successful community news network in Ontario. The popularity of the post took me by surprise: it sped past an old post about Margaret Atwood to become the second most read post in MediaPolicy’s short history.
***
You don’t need any help from MediaPolicy to point you to the public debate on the federal hate speech Bill C-63. The generous supply of condemnation from the nation’s free speech ultras is difficult to miss.
The focus of most criticism is not on the “online safety” part of the Bill —where social media platforms are required to step up their content moderation and filtering, particularly where kids are concerned. Rather, the reaction is to the hate speech amendments to the Human Rights Act and the Criminal Code.
Why we need stronger criminal sanctions against hate speech is something the government is going to have to do a better job of communicating. It will have that opportunity when the Bill hits Committee after Second Reading.
The other objective of the Bill is to reinstate section 13 of the Human Rights Act, repealed with much fanfare in 2012. That was the subject of Ms. Atwood’s ire as she was bold enough to ask out loud what others might be thinking: won’t the Commission be flooded with revenge complaints and mercenaries trawling for the (up to) $20,000 compensation that the Commission can order for victims of hate speech spread across the Internet?
Another castigation of the Human Rights amendments came from David Thomas, the former chair of the Human Rights Tribunal (appointed to a seven year term in 2014 by Stephen Harper). His flamboyant guest column in the National Post echoes Atwood on the gates opening wide for mercenary complainants.
That got me curious about data, so I contacted the librarian at the Commission and asked for numbers on the section 13 caseload before it was repealed. It seems the Commission’s Annual Reports began tracking (or at least reporting) that in 2010 as section 13 became increasingly controversial.
In 2012 for example, the Commission received 1500 complaints overall (not just section 13). Half were weeded out at the complaint stage, 209 were settled, 190 were dismissed and 113 were sent on for adjudication by the Human Rights Tribunal.
As for section 13 complaints here is the data, which may not be what Mr. Thomas or Ms. Atwood would expect.
Complaints received by the Commission:
Complaints “accepted” (i.e. processed for further determination):
Richard Moon, the hate speech expert who recommended in 2008 that section 13 be abolished in favour of greater enforcement of Criminal Code laws, suggested that the flow of human rights complaints through the federal Commission and Tribunal was modest:
BetweenJanuary 2001 and September 2008 the [Commission] received 73 section 13 complaints (about 2% ofthe total number of complaints received by the CHRC). Of these, 32 were closed or dismissed bythe CHRC and 34 were sent to the [Tribunal] for adjudication... Of the 34 complaints that were sent to the CHRT, 10 wereresolved prior to adjudication. In September 2008, 8 of the complaints forwarded to the CHRTwere awaiting conciliation/adjudication. In the remaining 16 cases the CHRT found thatsection 13 had been breached and imposed a cease and desist order. In several of these cases theTribunal also imposed monetary penalties.
***
The federal government has done the expected and made a five-year funding commitment to the Indigenous Screen Office at $13 million annually in production funds, to be disbursed by the ISO to Indigenous filmmakers.
The ISO has emerged as a parallel institution to the Canada Media Fund that channels production dollars to independent Canadian producers for “CanCon” shows that are broadcast on television and streaming platforms. The CMF receives funding from both the federal government and, upon the direction of the CRTC, Canadian cable companies.
One of the regulatory issues to be determined by the CRTC under Bill C-11 is whether both of the CMF and ISO will be able to supplement their existing funding from a levy on foreign streaming platforms.
***
Dipping into the ocean of political opinion out there, I recommend a Canadaland podcast hosted by the very annoying Jesse Brown with an excellent panel consisting of Jen Gerson, Paul Wells and Stephen Marche.
The subject is blue skying about a Pierre Poilievre government.
You know that aphorism about good journalism “saying one true thing”? You will hear lots of that in this podcast. And plenty of annoying stuff too, so it’s worth your time.
***
And if all this politics gets you down, brighten up your day by enjoying London Ontario’s Ryan Gosling knockin’ ‘em dead at the Oscars.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
The freshly tabled Online Harms Bill C-63 is going to get a lot of media coverage in this session of Parliament. I said last week that it’s two bills in one; it would be more accurate to say three bills (online harms and safety, criminalized hate speech, and discriminatory hate speech governed by the Human Rights Commission).
There is a lot of detail and, allowing for the usual flights of Parliamentary rhetoric and fundraising posts, it will be overwhelming and confusing. Some of that will be deliberate.
My advice to the keenly interested is to start following Emily Laidlaw’s blog posts on C-63 now. Her Part 1 is a set-up that introduces all of the major elements of the Bill. She has some editorialized opinions, but she’s an expert and scrupulous in her summary. You might even bookmark her site.
***
There have been disparate developments in the ongoing story of the financial sustainability of Canadian news media.
The narrative of the Online News Act Bill C-18 continues with the CRTC inviting news outlets to step forward and apply for eligibility to receive compensation from the $100 million in annual Google funds. Unless this process goes off without a hitch, I would expect some nasty internecine squabbling among news outlets over the apportionment of the funds even though the money is to be distributed on a per journalist basis.
Meanwhile in Australia, from whence the “bargaining model” for the Canadian Online News Act came, Meta has announced it will not renew its expiring compensation deals with Australian media companies. It will also terminate its news aggregation tab on Facebook. In other words, Meta will dare news publishers and the Australian government to make the same choice made here in Canada: cave to Zuckerberg or see news banned from Meta platforms.
On yet another policy front, a majority of MPs on the Canadian House of Commons finance committee just submitted 359 recommendations to the full House of Commons. Recommendation 213 advocates for policy action to “close the [online] loophole” that still allows digital media to escape federal tax laws requiring Canadian businesses to advertise in Canadian media if they want to claim a business expense:
Introduce tax measures to incent businesses to advertise with private sector Canadian news outlets and bring fairness to the different tax treatment of advertising purchased from foreign websites to ensure media organizations are not deprived of revenues.
This policy idea has been mooted for a couple of decades and it just might make it into the next federal budget.
It does feel at times that Canadian news media is on a hamster wheel of government policy action as the red ink, journalist layoffs and closures of news outlets shows no sign of abating.
On the other hand, there are bright spots that inspire the possibility that mainstream news outlets that cover original news could find a new and sustainable business model, especially where it is most needed in local communities and cities. MediaPolicy interviewed Village Media CEO Jeff Elgie and I think you will find that short piece interesting .
***
You will never find in MediaPolicy posts any devotion to the argument that Canadian media companies ought to make their way in the marketplace bereft of government policy intervention. But I do like to spotlight stand-out entrepreneurial examples. Hence, the Elgie interview above. But another example, my recommended read for this week, is a feature on Blue Ant Media’s Michael MacMillan, Canada’s producer/broadcaster extraordinaire.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
There’s not much reason for optimism these days in Canadian news journalism. It’s red ink, layoffs and closures as far as the eye can see.
Opponents of government aid to news journalism point to the many digital start-ups but, inspiring as that is, those are opinion sites or niche, single-beat journalism rather than broad spectrum news outlets.
Rare bright spots include La Presse and the Globe and Mail, two news outlets that hold the privileged (and well earned) title of being a number one national news outlet.
But the reason why news journalism is still in crisis is the relative dearth of financially sustainable news journalism in regional, metropolitan and local markets.
Enter Jeff Elgie, Canadian unicorn.
Elgie is the owner and publisher of Village Media, headquartered in the Ontario city of Sault Ste. Marie (population 70,000). A 48-year-old native of “the Soo,” Elgie headed his own digital advertising and IT consulting firms before getting into publishing. Since 2014, he has grown a chain of hyperlocal community news websites from its original base in the Soo to a network spread across the near north and southern regions of Ontario.
He’s continually growing and his operations are in the black. MediaPolicy interviewed him to find out how.
You have a new community news website launching soon in the downtown core of Toronto, south of Bloor Street to Lake Ontario?
Yes, it’s a hyperlocal digital product for people who live and work in the community, like we have for our other 23 local markets. It won’t have a provincial or national focus and we aren’t going to imitate the lifestyle news products that are already out there. It will be local news and information, mostly text journalism, with about eight to ten reporters. I wouldn’t consider it as head-to-head with the Toronto Star or CP24.
It took you ten years to get to 23 markets and now you’re really picking up speed. You’ve just added two Golden Horseshoe communities, Oakville and Flamborough. Now you’re looking at a foothold in Toronto. Are you profitable?
Yes. We have some markets that are stronger than others. Probably about ten of them could not be profitable as stand-alone enterprises – meaning, they wouldn’t support the necessary infrastructure to run independently. Building scale has helped a lot. We launched our own content management system nine years ago. It was purpose built for our business model. It’s not just for publishing editorial content but classifieds, auctions, business directories. A lot of commercial thought went into it. Now we license it to other community publishing companies, like Black Press and Glacier. So our technology line is now a profit-centre, not a cost.
I asked you on Twitter some time ago what makes for a successful market, and you said the saturation level of the ad market was important but the most important thing was whether the local audience was looking for hyperlocal content, as opposed to looking past you to the nearest metropolitan daily?
Yes. So long as the community thinks local first, we’ll succeed. It’s very important to give the community more than just news, but also information.
That’s what print newspapers had in the glory days right? The bundled product. The bundle of news, weather, classifieds, comics, entertainment listings. Then the Internet took that away.
Yes, but you can re-create that in a digital product, adding all sorts of community information. Weather, classifieds, school bus schedules, community web cams and so on. People want that. It’s a huge draw. And if you think about it, it’s the only way we can make this work. Thirty-seven per cent of our monetized page views are news. A third of that slice is basic service journalism, information about what’s happening in the community. The other 23% to 24% is original news reporting, the expensive stuff. We have two full time employees over our entire operation collecting and publishing obituaries. Obits are 20% of our traffic. But it takes 90 journalists to do the original news reporting.
I have often said that we are digital first and only. Creating a digital publishing business is an entrepreneurial pursuit and we built our model from scratch. We were never a print operation, so we have a different mindset. Repurposing print for digital cannot be an entrepreneurial plan. Doing print and digital at the same time splits your focus. We only focus on digital. Our advertising sales reps are entirely digital oriented. Also there’s an audience focus issue. Where markets have lost their print dailies, the audience shifted to digital and we were there to serve. Digital is not a high margin business; you have to be lean and efficient to make it work. Legacy publishers are going to struggle with it.
What’s your next content innovation?
We want to win back the hyperlocal topical discussion from social media platforms. It’s lower cost than original news reporting and it has important community information. I would describe it as “Facebook groups meet Reddit meets NextDoor.” It will be a safer, more moderated and more regulated discussion of community topics than what you see on social today. We’ll have postings from local experts and organizations, who can also host and moderate – we’ve done a lot of research on this. We’ve been working on it for a year and a half and we will be ready to pilot it by summer. There have been attempts by other news organizations to create this kind of forum, but we think ours is more thought out as an editorial product.
What’s it called?
“Spaces.”
And if it works?
We think it could be a game-changer for the business model of local publishing. And we’ll scale it as quickly as possible.
What I really want to know is if your success can be replicated in metropolitan markets. You are succeeding in digital news journalism at the hyperlocal end of the spectrum, and the Globe and Mail has proven the same thing at the other end, at a national scale for premium journalism. But in the big fat middle there seems like so little hope and Postmedia and Torstar are just hanging on.
We like to say that over the years we have been encircling Toronto. We’ve succeeded in a lot of markets where the print publication failed, like Orillia. In the Guelph newsroom we employ seven journalists [Ed Note: approximately the same number of journalists at the defunct Guelph Mercury]
We are going to establish our toehold in Toronto with our new site. If you ask me what would happen if the Toronto Star went out of business, not that I am wishing for that, but yes I think there would be an opportunity and we could make a go of it. But it would take time to scale up to replicate the same news coverage. In time, absolutely we could do it. When you think of it, in markets of 75,000 to 100,000 we cover a lot of institutional news beats. In a larger city, you can cover the same beats with a greater audience scale.
Let me change the subject to ask you about employing journalists. We were both at a news industry roundtable back in 2018 where Paul Godfrey of Postmedia speculated out loud that you might be succeeding by underpaying young journalists. Any truth to that?
(Laughs). We absolutely pay comparatively or better than unionized in the same market. We employ full timers with benefits. Since day one, ten years ago. We are also a Living wage certified employer.
When I organized small market newsrooms many years ago for Unifor I found most were a mix of 20-somethings getting their career start next to lifers from the local community who knew everything about the community. What about Village Media newsrooms?
More of the latter I would say, the local lifers as you call them. It’s not that easy to attract young journalists to some of our markets, especially in the north. But in our Toronto operation we should be able to hire some good young journalists. The challenges of hiring the right journalists is more of barrier-to-market-entry problem than you might think.
Let’s talk about something you and I don’t agree on, government subsidies and the Big Tech bill, C-18.
Okay.
I once asked you how dependent you were on these different programs and you said it was a small portion of your overall revenue. If it all disappeared, what would the impact be on your business?
Well it would all be a direct hit on our bottom line. We could stay in business. I think many other news publishers could not. We might have to shut down some of our more marginal publications. There’s no doubt the extra revenue from government programs has allowed us to scale faster. If it was gone, our growth would slow and we would shut down some unprofitable or new markets. One of the reasons we are launching our Spaces pilot is in anticipation of losing these government programs.
You were very critical of C-18, especially after Facebook embargoed news in response to the Bill.
Yes, our Facebook traffic was 17% of our business. We haven’t lost that much, partly because we’ve been doing other things to grow audiences, like our newsletters, because we anticipated this was going to happen. We’ve also lost the licensing income from Facebook. But we were able to launch in Flamborough anyway, it’s doing okay, although it would have done better if Facebook was available to gather audience. Losing Facebook distribution makes life very difficult for start-ups. The other thing about Facebook’s exit, is that it really hurts any news operation that is in second place in the local market, we’ve seen that happen. That has actually helped Village Media where we are in first place. But it makes start-ups more difficult. If we still had Facebook money and distribution, it would be a gold rush.
Okay, so the big question: what is to be done? If you were Heritage Minister, what would you do about subsidies, incentives, or digital news policy in general?
I look at all of these programs, the Local Journalism Initiative, Aid to Publishers, Special Measures for Journalism, the QCJO salary subsidies, and Bill C-18. The only one I would keep is the QCJO salary subsidy. I would prefer nothing from Big Tech, the traffic is way more valuable than the money. If government wants to do something, the QCJO salary labour tax credit is the best.
And if they are gone under a new government?
If all programs gone, it’s a disaster scenario model. It will devastate a large part of the industry. Although that does leave us an opportunity at Village Media. But I don’t want 3000 journalists to lose their jobs and we can’t fill the gap overnight. We can’t replace 3,000 journalists in a year.
Are there other survival strategies that haven’t been explored?
Well If you look at some of these regional local markets, and you take into account the gradual retreat of broadcasting news, it seems to me there is room for one high quality digital news outlet in each local market publishing in multiple formats, audio, visual, and text. That might be newsroom collaboration and the sharing of news copy among competitors. Imagine if we could focus local journalism investment into one top quality product. Or we may end up with a last man standing.
Speaking of competitors how does the CBC fit in?
It’s time for implementing the idea of a creative commons, where the CBC shares content with private news companies. It would be a win-win and more news would reach more of the population.
And CBC digital must get out of advertising. It’s obscene that the public broadcaster is competing with us for ad dollars. To do that, the government could replace their advertising revenue and fund them properly. They should get out of the ad market and get out of sponsored content. It would make a world of difference.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
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.
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 reportedpreviously. 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.
***
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.
***
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.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
I am BritBox binging on movies staging Jane Austen novels. The plots invariably centre on the rotisserie of marriage courting. This is a handy segue to the spate of recent news in which Hollywood streamers search for partners, the most recent rumour concerning Viacom-owned Paramount and Comcast NBC Universal’s Peacock getting together.
Just before Christmas, the rumour was Paramount and Warner Bros Discovery (owners of HBO) hitching up. So Austen. If you know the books, at the end of every novel, everyone gets married. Sometimes for love and sometimes for money.
That’s the latest in entertainment streaming. Over in sports, last month we told you about the recently announced streaming joint venture between Fox Sports, Warner Bros Discovery’s TNT and Disney ESPN.
The strategy is to defend market share but also to recapture broadcast rights from digital-only upstarts DAZN and FuboTV. The New York-headquartered Fubo is best known in Canada for broadcasting English Premier League matches. Fubo is objecting to this marriage, challenging the Fox-WBD-Disney joint venture in the US on grounds of anti-trust.
***
Two recommendations for this weekend.
The first is to immediately buy Alexandra Posadzki’s Rogers v Rogers. I will spare you a plot summary, most readers already know it. It’s obviously about the family civil war for control of the telecommunications and media company and the dramatic Rogers-Shaw merger.
It’s page-turning storytelling full of some surprising and humanizing anecdotes and all of the industry backstories rendered decipherable for the lay person. Above all the book leaves you with deep thoughts about organizing economic activity in such a crucial industry. Four stars.
The other recommendation is a 50 minute Press Gazette podcast; an interview with media tech guru Ricky Sutton. The first half of the podcast is Sutton ripping the Big Tech platforms for backing away from a grand bargain to voluntarily provide billions in funding to news journalism; after the break he continues with a proposed solution, bringing together news organizations to license their content to Big Tech’s AI-LLM products.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
The public debate over defining subsidy-worthy “Canadian programs” has revved up lately, despite the fact that the CRTC will not formally review the definition until later this year.
The conservative opinion salon The Hub ran an article this week penned by Richard Stursberg which it headlined in my Google news feed as “Canadian content is a scam.” Stursberg said no such thing, but all is fair in love, war and click bait.
Stursberg is a Canadian cultural sovereigntist (my label) who has long advocated a “cultural test” of identifiable Canadiana as the threshold for earning production subsidies, replacing the forty-year-old “creative headcount” test.
At the same time, Robert Armstrong (author of the seminal textbook, Broadcasting in Canada) published a defence to the status quo test that awards subsidy points based on the domination of key creative roles by Canadians: screenwriters, directors, lead actors and most importantly producers. The gist of the headcount policy is that Canadians will make Canadiana.
The volleyed policy argument has been around for a while, worthy in its own right. But lately it has become a political football thanks to Netflix and the Hollywood studios demanding a change in policy during the Parliamentary debate over the Online Streaming Act Bill C-11 and the CRTC’s upcoming regulatory hearings that will review whether a new subsidy test is a good idea.
The purpose of this post is to suggest that the CRTC should follow its past instincts on this complex policy file: experiment a little. There’s a lot at stake here, culturally and economically, so much so that it would be a shame to turn this policy issue into a political prize to be seized by any number of actors who are self-interested or just plain troublemakers.
I say that not just because the Conservatives have decided that a Canadiana test is a delightful opportunity to prang the government and the industry establishment. Rather, it’s important to appreciate that this game is afoot at the behest of Netflix and the other US streamers.
The streamers are trying to game the CRTC and the Canadian public by supporting a cultural test for subsidies as a trade off for abolishing the “headcount” rules for using Canadian talent once the CRTC assigns them a spending quota on offering “Canadian shows.” That’s because what they really want is to use American showrunners (writers and producers) and Hollywood stars. The paying audience they have in mind is not just Canadian, it’s global.
Netflix can and has pointed to its 2020 production of the Québec wilderness thriller Jusqu’à Declin as a good example of how authentic an American-produced (but Canadian written and acted) piece of Canadiana can be. But when Netflix and the streamers tell the CRTC they want the British cultural test to replace the Canadian headcount test, one needs to look exactly at what they propose.
The UK “35-point test” is heavily weighted to scripts with identifiable British settings, themes, characters and so on. It’s so heavily weighted that the British people are subsidizing shows that are owned and made by American producers and potentially employing Hollywood directors, screenwriters and all-American casts (in practice, it’s rarely that extreme).
The cultural test is so goofy that the “British setting” points are available on the basis of fractions: a show earns 25% of subsidy points when a quarter of the plot is visibly on British soil, scaling up by 25% increments.
Also, you have to get your head around the fact that an arms-length industry committee administers the test.
But let the UK system not be a straw person. Presumably we Canadians could come up with a better cultural test than that!
I am getting to my point, dear reader. But one more thing you need to know is that any changes or tweaks to our subsidy test requires that multiple gatekeepers get on the same page. That’s no mean feat when the layered inventory of subsidies are dispensed by Heritage Canada, the Canada Media Fund, Telefilm, and the CRTC. The governance of those bodies is complicated enough that a willing Heritage Minister would have to be heavy handed to dictate any big changes.
It’s unlikely the current Heritage Minister Pascale St.-Onge would want to do that and thank goodness because any significant shift from the headcount model to a cultural test is rife with uncertainty and unintended consequences for Canada’s domestic television and film industry, successfully nurtured over four decades.
The last time anyone tinkered with the subsidy test, it didn’t go far. Under Jean-Pierre Blais’ CRTC in 2017, the Commission experimented with pilot projects for certifying broadcasters’ “Canadian” programs that fulfilled their programming obligations.
The first was to cut in half the requirements for Canadian creators (from six to three points out of ten) if the show was based on a novel written by a famous Canadian novelist (hypothetically, Margaret Atwood’s American dystopia, The Handmaid’s Tale). But the other gatekeepers wouldn’t change their subsidy rules in response to Blais’ experiment, so it went nowhere.
An earlier CRTC innovation was to green light Canadian-American co-ventures, relaxing the CRTC rule that producers of Canadian programs must be Canadian. That generated some modest injection of Hollywood financing into Canadian programs, although the co-venture could not draw subsidies from the other funding agencies who did not relax their rules. As soon as Netflix is ordered by the CRTC to produce (a lot more) Canadian programming, the co-venture program is going to draw more attention and is likely to be reconsidered.
Here’s three other back-of-the-napkin ideas we might try as pilot projects:
1. Continue the current “headcount” test for determining 100% of subsidy funding but create a 10% bonus for meeting a thematic standard (and please don’t use the British system!).
2. Without changing the subsidy tests at Heritage, CMF or Telefilm, the CRTC could permit streamers and broadcasters to reserve a modest portion of their Canadian programming budgets to meet a cultural test only. This would be similar to the “Canadian novelist” pilot project. It would allow Netflix to put its money where its mouth is and make Canadiana without CMF, Telefilm or Heritage subsidies.
3. The CRTC, coordinating with the other funding agencies, could give Netflix et al a quota for Canadian programming that exceeds the current benchmark of 30% and the extra program spend can be cultural-only and eligible for subsidies from all gatekeepers.
There are undoubtedly flaws in these ideas that I can’t see, but in the spirit of policy innovation, some successful experimentation could help.
Even if you are with me so far, there remains one big caveat.
What would really deep-six our domestic industry is if anyone watered down the Canadian content rule that prohibits broadcasters (and now streamers) from forcing our independent Canadian film and television producers to alienate the long-term intellectual property in their creations. That’s a vital issue, but grist for the policy mill on another day.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
Université de Montréal law professor Pierre Trudel weighed in this week in Le Devoir
February 18, 2024
Lately we’ve been following Doug Shapiro’s futurist projections of media consumption.
In the last of his four part series he repeats his belief that the world wide inventory of consumer attention has plateaued and future media creators —-whether selling premium video or DIY niche content—-will be fighting over the same pie. He believes that in the near term future the digital platforms hosting the creator economy —YouTube, TikTok etc.— will make out like bandits. But ultimately, he says, this is not the big story.
In this last instalment, Shapiro suggests two game-changers. The first is the debut of virtual reality media which he thinks will take the market in media consumption by storm.
The other is driverless cars which would open up a new frontier on time spent on video consumption, an attention inventory that he suggests is fixed at the moment.
As for today’s winners, including the global streamers, “the challenges are immediate and the opportunities distant.“
There are some variables unaccounted for in Shapiro’s projections. For one, the consumer demand for premium video —-which he sees as a diminishing force—- might be more price inelastic than he thinks. In other words, if Hollywood and other purveyors of premium content respond to adversity by charging higher prices, we’ll pay them. The product is that good.
The other variable is the sustainability of this expansion in consumer attention. Shapiro clearly believes it is robust and reminds us that it didn’t take long for consumers to adopt online dating and online purchasing, so why not virtual reality media? On the other hand, we are entering new territory in media saturation. Supersaturation really is possible. After all, there is doting on babies and walks in the woods. Unplug, anyone?
***
Two weeks ago we posted on the Beaudoin Report commissioned by the Québec CAQ government on a political strategy to rectify the declining availability and consumption of French language media.
I am boldly predicting this issue has legs and we will keep hearing about it. A recent column in Le Devoir by Pierre Trudel, a highly influential commentator on media in the province, suggests that the political class in Québec is coming to grips with the probability that a Pierre Poilievre government will not be the friend of Québec’s cultural goals, at least not through the federal regulation of global streaming platforms.
On that score, Trudel expresses some politely worded disappointment in federal efforts to promote French language media (which MediaPolicy has covered here). He speculates it won’t get better, only worse, under a Poilievre-led Conservative government:
But realism requires us to keep in mind that the outcomes [of producing and promoting French language media] that will result from [Bill C-11] are largely dependent on the determination of the CRTC to apply them. In the past, the Commission has not always been enthusiastic about imposing requirements for Canadian and French-speaking presence in digital spaces.
Above all, we cannot ignore the possibility that federal power will one day be held by leaders hostile to imposing diversity and discoverability requirements on online platforms.
And the understated punch-line:
Québec must therefore use all means to guarantee effective presence and discoverability French-speaking creations from here and elsewhere.
That seems to be political code for encouraging the CAQ government to pursue the political strategy suggested in the Beaudoin Report: the CRTC must produce better results on the discoverability of French language media on global platforms or else face demands for a formal sharing of regulatory jurisdiction between Ottawa and Québec City.
***
Still in Québec, Radio-Canada published an opinion piece from Louis Audet last week. Audet owns the cable provider Cogeco and is probably best known outside of his home province as the man who said no to Rogers.
Audet is pushing a media policy that is regaining public attention: extending current federal tax rules that favour the purchase of advertising in Canadian print media, TV and radio to cover digital advertising.
Audet’s pitch is that Canadian businesses spent $14.3 billion last year on digital advertising, of which $10 billion went to American owned platforms instead of Canadian media. He thinks that if the ban on tax deductibility of advertising expenditures on foreign media were extended to online, the ensuing diversion of advertising to Canadian media would be considerable.
Alternatively, Audet says the law could go further than just limiting tax deductibility to advertising expenditures placed with online Canadian media: governments could even provide a refundabletax credit, ultimately a cash subsidy.
A refundable tax credit for advertising expenditures would parallel the federal government’s current program for subsidizing reader subscriptions. In effect, this is the democratization of government subsidies to media: the gatekeepers are readers and advertisers instead of governments. For those opposed to government subsidies of journalist salaries, this is intriguing public policy.
CAQ Culture Minister Mathieu Lacombe has already suggested that Québec could move into this policy sphere based on the claim that the tax regulation of online media is within provincial jurisdiction.
***
Here’s a riveting weekend podcast from the New York Times‘ “Matter of Opinion“: Men are from YouTube, Women are from TikTok. It’s not really about media, it’s about politics.
***
If you would like regular notifications of future posts from MediaPolicy.ca you can follow this site by signing up under the Follow button in the bottom right corner of the home page;
or e-mail howard.law@bell.net to be added to the weekly update;
MediaPolicy.ca 