Unifor National President-Elect Lana Payne is a former journalist. Photo Credit: Jennifer Rowsom/Unifor
August 14, 2022
Last Monday eighteen broadcasting groups and policy advocates filed petitions to federal cabinet asking the government to rescind the CRTC’s controversial renewal of the CBC’s five-year TV licence. The appeals of the 271-page ruling (covering dozens of new and repealed conditions of licence) are itemized and lengthy.
The main argument is that the repeal of key licence conditions supporting Canadian programming is not only bad for public broadcasting of Canadian content but sets a precedent for similar deregulatory rulings for private TV networks and online undertakings in the next two years.
I posted a summary in which I suggest that cabinet has an opportunity to not only reconsider the CRTC’s decision but to refocus the CBC on its public mission.
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In Australia, there is a ruckus over the first annual review of the “Facegoogle” Bill that is the model for Canada’s Online News Act, Bill C-18. Both Google and Meta are publicly trashing the legislation that pushed them in 2021 to negotiate pay-for-news deals with Australian broadcasters and publishers.
Given that Canada’s C-18 will be in front of the Heritage Committee in September, it’s timely that McGill University’s Taylor Owen and Supriyu Dwivedi have published a review of the Australian situation that segues into a list of recommendations to improve C-18.
Added to a similar list from former CRTC Chair Konrad Von Finckenstein, Heritage MPs should get a running start on improving the Bill.
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Judging from my Twitter feed, either the tide of vicious and perhaps criminal online abuseof female journalists is rising or the brave defiance of those women is mounting.
Demands are increasing that police forces respond better to the threats of harm directed all journalists, but especially women and Canadians of colour who are the most frequent targets.
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Speaking of female journalists, Lana Payne was elected National President of Unifor, replacing Jerry Dias. Before joining the labour movement, Payne began her career as an investigative reporter at the legendary St.John’s Sunday Express and later as a columnist at the Telegram.
Unifor represents 10,000 journalists and media workers in print journalism, film production and broadcasting and has been active on a long list of media policy files.
Opponents of the CRTC’s renewal of the CBC’s television licence have petitioned federal cabinet to veto the controversial ruling. The cabinet’s decision is due in early December.
Appeals of CRTC licensing decisions routinely fail, but this time may be different given the far reaching consequences of the CRTC removing key conditions of licence supporting Canadian programming.
The cumulative message from 18 petitions filed by many of the industry groups that participated in the Commission’s licence proceeding is that the results of its 271-page ruling are a mess.
Despite broad-based support for the Commission ordering the CBC to spend more on programming from equity-seeking groups, the petitioners say the CRTC got it badly wrong on local news; badly wrong on support for independently produced Programs of National Interest (PNI); badly wrong on prime-time broadcasting of Canadian content; and badly wrong on striking the balance between encouraging the CBC’s migration to digital while maintaining a vigorous conventional TV platform.
And that’s only a partial list. An exhaustive review of licence conditions can be found here.
To give some context to the controversy, it’s important to look to Canada’s national broadcasting policy that Parliament wrote into section 3(1) of the Broadcasting Act.
That policy makes the CBC the federal flagship of Canadian culture and tells the CRTC what to enforce:
(l) the Canadian Broadcasting Corporation, as the national public broadcaster, should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains;
(m) the programming provided by the Corporation should
(i) be predominantly and distinctively Canadian,
(ii) reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions,
(iii) actively contribute to the flow and exchange of cultural expression,
(iv) be in English and in French, reflecting the different needs and circumstances of each official language community, including the particular needs and circumstances of English and French linguistic minorities,
(v) strive to be of equivalent quality in English and in French,
(vi) contribute to shared national consciousness and identity,
(vii) be made available throughout Canada by the most appropriate and efficient means and as resources become available for the purpose, and
(viii) reflect the multicultural and multiracial nature of Canada;
By contrast Parliament conveyed to private broadcasters more modest CanCon obligations, balanced against commercial considerations:
(s) private networks and programming undertakings should, to an extent consistent with the financial and other resources available to them,
(i) contribute significantly to the creation and presentation of Canadian programming, and
(ii) be responsive to the evolving demands of the public;
It’s not surprising then that the CRTC’s obligations to spend on Canadian programming (“CPE”) are far greater for the CBC than private broadcasters: the CBC’s 85% of total programming expenses compares to only 30% of total revenue for the big private networks.
In addition to the CBC’s high level of overall spending on Canadian content —commensurate with its $1.3 billion in federal funding— the CRTC has long imposed genre-specific conditions of licence for priority programming on linear TV: local news, PNI, children’s shows, French and official minority language programming, Canadian feature films, and so on.
Until this recent ruling, the Commission also required the CBC to showcase Canadian content during prime time evening hours (80% of programming compared to 50% for private networks).
Also until this ruling, the Commission obliged the CBC to buy 75% of its Programs of National Interest from independent Canadian producers. As the largest purchaser of independent Canadian programming, the CBC sustains an ecosystem of homegrown producers who create authentic Canadian shows.
The CRTC’s new ruling establishes an overall CPE of 85% for the CBC, now to be shared by both linear and digital video platforms, and eliminates most of the existing licence conditions governing programming for priority genres. The exception is the Commission’s newly created and (mostly) well received spending envelopes for programming from racialized, Indigenous, LGBTQ and disabled Canadians.
The Commission’s reasoning behind this deregulation is at times challenging.
As pointed out in the petition filed by the Forum for Research and Policy in Communications, this was very much in evidence in the Commission’s rejection of a proposed network-wide spending envelope for local news (first created by the Commission for private networks in 2017) and its subsequent repeal of the licence condition requiring minimum weekly hours of local programming at the CBC’s largest stations.
The Commission explained its rejection of adopting the network-wide spending envelope thus:
433. If the CBC can fulfill its obligations (relating, for example, to regional relevance, balanced news, and hours of local programming) while reducing related news expenditures, it should not be prevented from doing so. Although the imposition of a condition of licence would provide a sustained commitment on the part of the CBC to news and local programming across all platforms, while giving the CBC the flexibility needed to adjust expenditures in response to fluctuations in revenues or expenses, it would not address concerns regarding spending in metropolitan versus non-metropolitan markets, and would not necessarily mean that the CBC is directing spending to local programming that includes news. Further, while much news-related spending can be planned, it must be recognized that a significant portion of the spending is either cyclical (such as election periods) or related to breaking news or long-term events (such as the pandemic).
434. In light of the above, the Commission finds that it would not be appropriate at this time to impose on the CBC an expenditure requirement relating to news programming.
It appears the Commission rejected a network-wide news spending envelope because it might allow the CBC to cannibalize budgets from some stations to support others.
Not being willing to trust the CBC on this point, the Commission then turned around and expressed such a high degree of trust in the Corporation that it was willing to remove long standing conditions of licence requiring minimum weekly hours of local programming for its seven metropolitan stations in Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal despite undisputed evidence placed before it of declining news production:
454. The Commission acknowledges the concerns raised regarding the reduction in local programming broadcast on the CBC’s English-language services. However, even though there was a decline in the number of hours of local programming offered on the CBC’s licensed television services, it has still met and well exceeded its conditions of licence in terms of hours of local programming broadcast.
455. Furthermore, the Commission is not convinced that if it were to accept the CBC’s modified conditions of licence [regarding the existing minimum hours of local programming], the CBC’s actual performance on its conventional television stations would change dramatically, since the Canadian public still consumes a great deal of content on its licensed services. Further, the Commission notes that the CBC’s production studios are located in metropolitan markets, and that those markets are therefore very likely to be adequately served by the CBC’s local programming…
459. After reviewing the CBC’s proposal, for the reasons set out above, the Commission is confident that the CBC will continue to broadcast local programming that is predominantly news in both the English- and French-language metropolitan markets. Accordingly, the Commission finds that imposing a condition of licence relating to the broadcast of local programming in metropolitan markets is not necessary for the CBC to achieve the above-noted outcome in this regard.
It’s an ambiguous policy conclusion.
Either the Commission is inviting the CBC to cut local news in large cities to preserve news budgets in smaller markets, or the Commission has a Polyannish confidence that the CBC will not reduce news programming in the metropolitan markets despite having already done so and now having the regulatory freedom to do more.
Either way, the Commission has left the CBC’s metropolitan stations bereft of licence conditions for both spending and exhibition of local news. Private network stations in those six cities retain both. When the private network licences are up for renewal two years from now the private broadcasters will howl for relief.
That’s not the only knock-on effect of this CBC ruling on the regulation of the private stations.
As the petition filed by the Canadian Association of Broadcasters says, the CRTC’s repeal of the CBC’s obligation to schedule Canadian programming during prime time means it can schedule more lucrative US programming in its head-to-head competition against private networks which are still obliged to schedule Canadian shows for 50% of that window.
By now we should be seeing the pattern.
As several of the petitioners point out, the Commission’s repeal of many CBC licence conditions will be demanded by competing private broadcasters in 2024. Not surprisinglypetitionersbluntlydecry the CBC ruling as a “stealth policy hearing” in which significant deregulation of private broadcasting is rendered a fait accompli.
A similar point about stealth policy change is made by the public interest group Friends in reference to the CBC being permitted to share up to 100% of its CPE obligations over both regulated linear TV and unregulated Internet TV.
The Commission’s first foray into setting ground rules for combined linear-online TV operations before Bill C-11 has even passed into law creates facts on the ground when the CRTC issues a Notice of Consultation to implement Bill C-11’s regulation of online undertakings. Just as an example, the Commission’s decision to repeal prime time exhibition rules for linear TV will encourage YouTube to argue for watering down any proposals on “discoverability” of online content.
The Commission’s choice of the CBC licence renewal to signal a system-wide deregulatory tack also raises the question of whether it’s in line with what the government has in mind for the public broadcaster in the first place.
The Prime Minister’s mandate letter to Heritage Minister Pablo Rodriguez following the 2021 election gives explicit instructions:
Modernize CBC/Radio-Canada, proceeding in a manner that respects the public broadcaster’s independence by:
Updating CBC/Radio-Canada’s mandate to ensure that it meets the needs and expectations of Canadian audiences, with unique programming that distinguishes it from private broadcasters;
Reaffirming its role as public broadcaster in protecting and promoting the French language and francophone cultures in Quebec and across the country;
Increasing the production of national, regional and local news;
Strengthening Radio Canada International, so that it can continue to advocate for peace, democracy and universal values on the world stage;
Ensuring that Indigenous voices and cultures are present on our screens and radios;
Bringing Canada’s television and film productions to the world stage; and
Providing additional funding to make it less reliant on private advertising, with a goal of eliminating advertising during news and other public affairs shows.
On the latter point, the Liberal election platform promised $100M annually in additional funding. That funding did not find its way into the Finance Minister’s “restraint budget” in April but the outstanding promise is a culmination of several years of advocacy (including CBC management as recently as 2016) for the CBC to distinguish itself as a public broadcaster by going ad-free, like the better funded BBC.
The silver lining in the CRTC’s ruling on the CBC licence, and the subsequent petition to cabinet, is that it challenges the Minister and his cabinet colleagues to engage in the hands-on review of the CBC contemplated in the PM’s mandate letter.
Federal cabinet also has the opportunity to think carefully about the intended or unintended consequences of the CBC ruling for the regulation of private domestic broadcasters and also the regulation of online undertakings that the government has fought so hard to introduce in Bill C-11.
This may be a big increase in workload for a Heritage Minister already shepherding three Internet Bills through the House. An alternative proposed by one of the petitioners is for cabinet to veto the CRTC’s ruling (with the exception of the spending envelopes for equity-seeking programming) and instruct the Commission to extend the existing CBC licence until after the Commission has implemented Bill C-11. This would also give Heritage and Finance more time to chart a course for the public broadcaster.
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This post is already too long. The Commission’s majority and dissenting opinions are 271 pages long covering a long list of repealed licence conditions. The 18 petitions are just as encyclopaedic.
For policy junkies, you can find the petitions hosted on the FRPC’s website.
As a postscript for those of you whose patience is not exhausted yet, at least two more points raised by petitioners are worth mentioning.
PIAC has cited statistics demonstrating the large audience still devoted to linear TV despite years of cord-shaving and cord-nevering.
From the PIAC petition, sourced from the CBC
That age-skewed audience is characterized by a strong preference for linear television and confirmed resistance to Internet adoption.
From the FRPC petition, sourced from Statistics Canada
That has real consequences depending on how far the CBC exploits its new freedom to shift resources from linear to digital and especially away from metropolitan local stations: home to nearly 40% of the Canadian population.
Unthinkable only a few years ago when the previous CBC President advocated for an ad-free CBC, Tait is taking the Corporation in the opposite direction over the objections of her own newsrooms and without a mandate from anyone outside her own office. While advertorial and sponsored content is common-place in commercial news organizations, it is not in public broadcasting.
Most petitioners are asking Cabinet to review the Commission’s decision not to ban Tandem.
Before Parliament broke for the summer, Bill C-18 the Online News Act passed second reading in the House of Commons and is slated for further debate and possible amendments at the Heritage Committee in September.
The Bill is aimed at compelling Facebook and Google to pay more (or at all) for Canadian news content that draws and retains traffic to their sites. It’s modelled on similar legislation in Australia which rebalances the bargaining power between the FaceGoogle platforms and news organizations. The key is the availability of binding arbitration should negotiations fail between Platforms and news organizations (who are allowed to combine into bargaining coalitions).
Like Australia, Canada is small potatoes to Facebook and Google. Their fight back against government regulation is global. The UK, Europe and the US are the prize fights. Canada and Australia are on the undercard.
That’s why it’s important for Canadian policy makers to pay attention to similar legislative efforts in the big markets. Last week, US Senator Amy Klobuchar got her skinny American version of C-18 in front of the Senate Judiciary Committee, fifteen months after she first tabled the Journalism Competition and Preservation Act (JCPA) in the Senate.
The House version of the Bill hasn’t even got to the Committee stage. What is murky in a Beltway kind of way is that the main sponsor of House 1735 is talking openly of a more robust Bill, more like C-18, but has not been able to table it.
The JCPA is skinny not only because it is a single page of text but because it is nothing like C-18. It merely gives news organizations a four-year exemption from powerful American anti-trust rules so they can lawfully bargain as a group to get a better deal from the Platforms: there is no arbitration and no obligation for the Platforms to negotiate in good faith with any news organization.
Facebook and Google would grab this skinny JCPA deal in a New York-minute (okay, Silicon Valley-minute) if it set the bar for similar legislation around the globe.
Things have gone too far for that in Canada unless Google and Facebook can find a way to get Pierre Poilievre to blow up C-18 and no doubt he is game.
Meanwhile Google is engaged in a lobbying and publicity campaign against the Bill, while Facebook is making ominous comments about downgrading news content in their feed (used to be “newsfeed”) algorithm.
As a kind of insurance policy, over the last year both Platforms made confidential pay-for-news deals with individual print news organizations for what are surely on terms dictated by the Platforms.
In the course of summarizing a portion of his narrative about the beguiling power of storytelling in news journalism —that we are imprinted with a primal desire for good storytelling— I unwittingly stumbled into an important academic debate about whether storytelling is truly “innate” and even further that it is “primal” in an evolutionary sense.
For those of you with an academic bent, you may find Jonathan Kramnick’s “Against Literary Darwinism” Critical Inquiry 37 (2011) interesting. If you want to read the full article for the purpose of research, I believe I will be on the right side of the copyright/fair use line by sharing it with you, so just email me at Howard.Law@bell.net.
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The debate over the Online Streaming Act Bill C-11 has been mercifully quiet for a few weeks.
Today the Globe’s Johanna Schneller wrote an interesting piece on the US streamers’ purported pivot to making and distributing nationally-distinct programming as a global business strategy.
Whether that is just spin for the C-11 debate (the timing is very convenient) or a real change in global programming strategy is something we will have to wait and see about.
There are some insights from Schneller’s interviews with the Californian streaming studios about working on authentically Canadian projects with independent Canadian producers who will expect under current CanCon certification rules to hold onto the intellectual property rights to second seasons, sequels and spin-offs.
Amazon’s Christina Wayne was having none of that when she told the Globe “the deals we do [with Canadian producers] are competitive. If producers want to retain ownership, they can sell somewhere else.”
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There are other policy issues bubbling to the surface that I hope to post about soon.
A number of broadcasting and policy groups are filing petitions to the federal cabinet to overturn some of the more controversial terms of the CRTC’s renewal of CBC’s licence.
The CBC has filed its own appeal document (to federal court) against the CRTC’s ruling on the use of the N-Word by two Radio-Canada hosts.
A fresh development that impacts the debate over the Rogers-Shaw merger is a complaint filed by a small Canadian broadcaster One Soccer against Rogers for denying access to distribution on the Rogers Cable platform. During the merger approval at the CRTC, the Commission mostly deflected the efforts of small programmers to obtain mandatory access to Rogers’ cable platform which will, if the merger is completed, own 47% of the English Canadian cable market.
More on that once Rogers files its reply a month from now. The One Soccer filing is listed on the CRTC site as Timeless Inc. v. Rogers.
A review of Veils of Distortion: How the News Media Warps our Minds, by John Zada.
This book is yet another introspection in response to the Internet’s fragmentation of media, the undermining of mainstream news journalism, and the degradation of civic debate.
The message from Toronto-based journalist John Zada, who spent several years working for cable TV news outlets at the CBC and Al-Jazeera, is this: mainstream news journalism is messed up.
It is true that the strident defense of journalism you will find on MediaPolicy.ca has to contend with some inconvenient poll numbers marking a frayed trust in media and even a possible decline in news consumption.
From the Reuters digital news survey – 2022
Zada’s brief, readable and inexpensive book covers journalism’s shortcomings, both known and many. He also prescribes newsroom solutions for journalists and media literacy for citizens.
What makes his professional mea culpa different are intriguing observations about storytellers and story listeners that might help us better understand the increasingly bloody-minded civic discussion in the modern world.
Journalism, like any attempt to describe what is happening in our world, is a map of reality, not reality itself. Zada sums it up this way:
“Twentieth century Polish-American scholar Alfred Korzybski championed the idea…that humans do not experience objective reality. He claimed that what we know and see of the external world is that which has reached us after being filtered by the brain. “The world is not an illusion, it is an abstraction,” Korzybski once wrote.
“His most famous and oft-quoted maxim “the map is not the territory”….[meant] our mental abstractions and representations of a terrain, no matter how detailed or well constructed, do not resemble the real thing. Rather our maps our grossly inaccurate. They are at best metaphors….
“This map-terrain relation applies to the news…[a] crude “map” that depicts the event-scape of the world.”
If journalism is the map’s cartographer, Zada finds journalism wanting: hence the book title’s harsh accusations of distortion and mind warping.
The first distortion is journalism doing a bad job of news curation by fixating on alarming news of what just happened and almost totally ignoring the mundane long-term improvements in the human condition.
Another veil of distortion is the sensationalism that exaggerates the world as being in constant turmoil or slavishly competes for a mass audience drawn to “infotainment.” The media’s early addiction to reporting on Donald Trump grew his popularity, says Zada, and that illustrates the distorting power of journalism.
Some of the other sins of journalism include uncritical reporting on contentious or speculative scientific studies. Or journalists being manipulated by their news-subjects: commercial interests, celebrities, or governments.
We’ve heard these criticisms of journalism for decades and opinions are going to vary on whether they represent imperfections or fundamental flaws.
As a life-long admirer of journalists, I will go with imperfections.
But another veil of distortion —and here the curiosity of your inner nerd may be piqued— is that of news storytelling itself.
Learning by storytelling is as old as time and primal, as any parent of a small child will know intuitively. “The human mind evolved to become a story processor,” says Zada. “The news both reflects and caters to our sense of mythos and desire for universal narrative archetypes.”
Good story telling requires dramatis personae: heroes, victims and villains as protagonists engaged in contests of will or power.
Good story telling demands human agency: intentional events marked by actions that ring with moral (or immoral) clarity.
Good story telling exploits the human susceptibility to what behavioral scientists call the “narrative fallacy,” our story listening instinct to stitch together facts into an emotionally satisfying narrative even at the cost of eliminating more fulsome but less dramatic explanations of what is happening in the world.
As story listeners we love to simplify, to make the abstract into the familiar, and to comprehend events that conform to our assumptions about the world.
In political reporting this kind of storytelling skews towards assigning blame to archetypal villains. It has an easy affinity with populist politics that pose a binary struggle of the powerful against the powerless.
Is it any accident that one of the proud monikers of the journalism profession is “holding the powerful to account” ?
It even seems that journalists are aware of the seductive power of storytelling and mitigate it with “both sides” reporting which presents news as an inconclusive battle of protagonists where no one is quite sure of who is the hero, villain or victim.
Now Zada is not calling for an end to storytelling any more than he is suggesting our brains should have evolved differently.
He does however issue a call to newsrooms and journalists to take a step back, be cognizant of narrative fallacy, and insist on higher standards.
He endorses “service journalism,” meaning editors should curate in favour of news that informs rather than entertains. That approach works in tandem with solutions-oriented journalism: coverage of more than dramatic differences of opinion, but also of a possible solution.
He recommends more diversity in the newsroom, not just in better representation of equity seeking groups, but in terms of life experience.
All of this is necessary if news reporting is going to remain credible and relevant to an increasingly disaffected audience.
News readers need to do our part too, says Zada, and he pleads for better media literacy: a healthy skepticism towards our news sources and an acknowledgement of the beguilements of narrative.
Zada does not engage in how we are going to pay for all of this better journalism (we seem to have a problem paying for what we already have) but that is a problem for another day.
Last month the CRTC renewed the CBC’s five-year licence in a burst of deregulatory enthusiasm that took many by surprise.
The CRTC’s precedent-setting decision to repeal the core of minimum programming standards and expenditures for most of the public broadcaster’s linear TV operations was not requested by the CBC nor was it included in the CRTC’s detailed agenda when it published the required Notice of Consultation that began the proceeding.
Inevitably the CRTC ruling is being appealed: the Associations representing independent producers supplying much of the CBC’s programming in Quebec (AQPM) and English Canada (CMPA) filed their appeals this week, citing the scathing dissent of the minority Commissioners. The CMPA also suggested it may file a parallel complaint to the federal cabinet.
Court appeals of CRTC decisions are long-shots and excessively technical: they require an “error of law” as opposed to an error of policy. Cabinet appeals are explicitly policy-based but effectively require the government to issue the regulator a vote of non-confidence.
The CBC was also in the public eye this week when former TV host Wendy Mesley emerged in a podcast hosted by Postmedia’s Anthony Furey to explain her departure after 42 years at the public broadcaster (and promote her new podcast Women of Ill Repute, a co-venture with Maureen Holloway).
Mesley gives a mea culpa of her use of the n-word in an internal production meeting and then, with a diplomacy the CBC probably doesn’t deserve, tells the story of her employer suspending her and busting her to junior reporter.
The most combustible podcast I listened to last week (maybe ever) was the June 6th Canadaland interview of National Post columnist Terry Glavin, which I stumbled upon after reading Glavin’s blog update of the long-running controversy surrounding the coverage of graves and graveyards linked to Indigenous children who attended Residential Schools.
For background on the media coverage, you can read Robert Jago and Jonathan Kay. For the grave story itself, in addition to Glavin’s update there is a helpful piece written last year by the CBC’s Ka’nhehsí:io Deer
The Canadaland podcast hosted by Jesse Brown crackles from the first moment of its hour-long length. You won’t find your attention wandering.
In other industry news:
In an earlier post about the declining financials in Canadian broadcasting I noted that yet-to-be-released CRTC data for 2020-2021 would provide more clarity about how broadcasters are coping with the growth of American streaming apps. A grim foreshadowing of that data may be contained in the US Nielsen data released this week.
There may be a breakthrough for a trimmed down version of US President Joe Biden’s legislative program. Included in the package is ratification of Biden’s support for the OECD deal on a minimum 15% corporate tax to fight against international tax avoidance. If the OECD deal goes through, Canada would not trigger its Digital Services Tax on Big Tech companies operating in Canada, set to come into force in 2025.
VMedia announced it has been acquired by Québecor. The Ontario-based VMedia operates multiple telecommunications businesses including retail Internet (ISP) and online television (IPTV). The purchase provoked an outcry against corporate consolidation in the ISP market. Those critics take no solace in the competitive upside of strengthening Québecor’s expansion as a national competitor against the other big telcos in ISP and IPTV outside of its home territory.
Netflix CEO Reed Hastings insisted that linear TV will die in “five to ten years,” as he hosted yet another quarterly investor call to explain the streaming service’s stall in subscription growth (it lost 1.3 million North American customers and will have to get by with its remaining 220 million global subscribers). Hastings’ comments prompted an ode to the staying power of linear TV by Alex Cranz in The Verge.
The uncertain future of linear TV in Canada is the focus of a CRTC report about the revenue impact on Canadian TV companies losing access to programming rights to American premium movies and hit drama series. The Report suggests the Netflix prediction might be true and Hastings’ estimate of “five to ten years” too generous. I posteda summary of the Report’s projections.
Last week I posted that Washington Post columnist J.J.McCullough’s loose description of Bill C-11’s “regulation” of YouTube videos needed to be tightened up: the Bill excludes the possibility of CanCon “exhibition quotas” or abusive content codes for videos posted to social media platforms. When the Heritage Minister’s Chief of Staff John Matheson quoted my post on Twitter he drew fire from C-11 opponents which I summarized briefly because the back and forth seemed to resolve some misunderstandings about the Bill. This is definitely a post for C-11 disputants and Parliamentarians, but of less interest to normal people.
A Globe and Mail editorial weighed in on the tax avoidance strategies of Big Tech companies, in this case Amazon. In passing the Globe mentioned that ratification of the multi-nation OECD agreement on a minimum corporate tax is stalled in US congress along with much of the Biden agenda. If the OECD deal falls apart Canada’s Digital Services Tax on Big Tech would kick in after all. As I wrote in previous post last December, this “audience tax” is the ideal revenue stream to aid Canadian media that has lost its advertising revenue to Google and Facebook.
Last week the CRTC quietly released a disquieting study it commissioned on the decline in Canadian television broadcasters’ opportunity to buy and re-sell popular US programming on their networks.
The take-away from the report written by industry analyst Peter Miller is that the entry of more foreign, mostly American, “Direct to Consumer” (DTC) television apps into the Canadian market threatens to cancel the Canadian broadcasting system’s meal ticket.
The DTCs include the California-based studios Disney, Paramount (CBS) and Apple TV, increasingly selling exclusive access to their premium movies and hit drama series. Competing apps from Peacock (NBC) and Warner/Discovery’s HBO are potential market entrants in Canada. The DTCs compete for subscribers against Netflix and Amazon Prime but also against traditional broadcasters whose audiences watch drama and comedy shows for forty per cent of their monthly viewing hours according to the CRTC.
The popularity of US dramas with Canadian audiences drives broadcaster profits that set-off losses they sustain making Canadian news, information, sports and Canadian “programs of national interest.”
If the supply of US programming to Canadian broadcasters is severely diminished, says Miller, the rate of cable-cutting and cable-nevering will increase. That will push Bell, Corus, Québecor, and Rogers ever closer to the dreaded tipping point where subscribers and national advertisers no longer view cable TV as a must-see or a must-buy platform. Miller doesn’t make the comparison, but this is what happened in the newspaper market several years ago.
The Report says that whatever television services are most exposed to the loss of US drama programming are at the greatest risk: specialty television channels and Video-on-Demand services will suffer the most. Given that specialty TV has been the profit-engine of Canadian TV for decades (and “conventional” local stations are generally unprofitable), the Report concludes the Canadian broadcasting system faces an existential moment in the near future. Miller maps out a range of outcomes from best to worst case scenarios.
Although traditional television revenues have fallen steadily since 2014, so far the profit margins of our major media companies are holding, at least in cable distribution and specialty programming if not conventional broadcasting.
Also there is as yet no hard data measuring the loss of US programming rights: most of the CRTC’s relevant data metrics are confined to Canadian programming and Numeris does not appear to have access to data that would support a metric on the loss of US programming.
Of necessity, Miller’s observations are documented by numbers that show the revenue growth of foreign Internet TV apps in the Canadian market; the market entry of new DTC apps based on exclusive programming offerings; and a series of confidential interviews he conducted with Canadian TV executives about the declining availability of programming rights.
We can engage in limited data snapshots of the specialty channels most likely to be impacted by the loss of programming rights to premium American movies and drama series. As of August 31 2020, data submitted to the CRTC by our largest broadcaster Bell Media reveals revenue, subscriber and growth metrics for its key English Canadian specialty and VOD services:
As you can see revenue is treading water but subscriber numbers are falling and that can’t last indefinitely. Fresh CRTC data for 2020-2021 is due soon.
This 2020 data may or may not measure the full impact of market entry (and exclusivity practices) by Disney Plus in November 2019 and Paramount Plus (formerly CBS All Access) in 2018. At this point in time the precise pace and impact of the loss of US programming rights is still informed guess work.
A significant variable in that guess work is the entrepreneurial response by Canadian broadcasters. (An insightful article by OutTV CEO Brad Danks both acknowledges the omnipotence of the American streaming apps and suggests an entrepreneurial response).
The latest development in television business models is the emergence of free-advertising supported TV (FAST), embedded advertising for shows streaming on Internet TV platforms.
FAST could be the coup de grâce to ad-supported conventional television (already having lost market share to Google and Facebook) or it could be an opportunity to reclaim it.
Another innovation is Corus distributing its conventional programming, including Global News, on digital platforms like Fubo TV, Paramount’s Pluto TV, Amazon Prime and Roku for a negotiated fee, something not available to them from cable companies who are permitted by Canadian copyright law to retransmit broadcaster programming for free from their over-the-air signals.
Bell Media clearly would like to partner up with Netflix to make Canadian content: it unsuccessfully urged the federal government to amend Bill C-11 in a manner which would have given the CRTC the regulatory power to create co-production opportunities.
Niche Canadian programmers like OutTV, Blue Ant, and independent YouTubers are increasingly seeking out global distribution by major digital distribution platforms, a strategy available to other Canadian broadcasters.
Whether these are winning entrepreneurial plays or just whistling past the graveyard is something we will watch unfold in the next few years.
Miller’s Report recommends a government policy response, and quickly, given his projection of a major downturn in the financial viability of Canadian broadcasters impacted by the loss of programming rights. Regrettably neither the CRTC’s 2018 forecast (“Harnessing Change”) nor the 2020 report of the Broadcasting and Telecommunications Legislative Review tackled the programming rights issue or recommended any policy response.
Bill C-11 is not that policy response, says Miller.
Bill C-11 will result in an injection of $1 billion (according to government estimates) into the production of Canadian programming by foreign owned Internet TV companies. While the legislation should bring the foreign streamers’ regulatory costs up to the same level of Canadian broadcasters, it does not provide any incentives or requirements to continue selling programming rights to Canadian broadcasters instead of pushing their TV apps as the exclusive access to their hit programming.
Miller writes enigmatically at the conclusion of his report that Canada should consider a range of pro-Canadian policy measures that revive wholesaling programming rights as the most attractive option to American media companies seeking Canadian audiences:
… structural measures that financially advantage or give priority to Canadian owned and controlled broadcasting services (such as Internet advertising tax deductibility, zero rating of wireless data usage, preferential access to Canadian productionfinancing and expanded rights protection measures) should be under serious consideration.
Thank goodness we are now getting at the truth of how Bill C-11 will regulate YouTube, and how it will not.
The most industrious critic of C-11 Michael Geist has acknowledged that C-11 excludes the authority of the CRTC to devise quota regulations for online undertakings for Canadian programming in general or even for specific genres like drama, news or children’s programming. That’s the outcome of the “quota” sections 9(1)(a-d) being excluded by section 9(6) because YouTube doesn’t have programming control over its videos.
Also Mr.Geist no longer contests that uncurated hosting platforms (YouTube, TikTok, Facebook) will be exempt from CRTC Codes governing misinformation or abusive content because the enabling provision of the Act [section 3(1)g] for those Codes is inoperative for those platforms. For better or worse, the CRTC cannot apply those standards to YouTube because once again the platform doesn’t exercise “programming control” over YouTubers [sections 3(1)h and 2.2].
Now perhaps Mr Geist’s fellow C-11 critics —Open Media, Digital First Canada, Washington Post columnist J.J.McCullough, and Conservative MP Rachael Thomas— will make the same acknowledgements and be more precise in their public statements.
It’s the “discoverability” provisions of C-11 that still trouble its critics.
Mr Geist claims that under section 9(1)(e) of C-11 the CRTC will have the authority to order YouTube to make Canadian content thirty per cent of its algorithmic recommendations, a number he has picked out of the air. Keep in mind this requirement in C-11 to “showcase and discover” Canadian content applies equally to domestic broadcasters, Netflix and other online streamers, as well as YouTube and the other hosting platforms.
Putting the “30%” aside —maybe it should be a different number— is expecting media companies to “showcase and discover” Canadian content bad?
Is it bad to connect Canadians to the availability of Canadian news, drama, sports, children’s programming et al, given there is no obligation to watch it?
Also, it might be helpful to our debate over C-11 to describe exactly what we mean or fear about asking YouTube to connect Canadians to CanCon either through search responses or personalized recommendations based on past viewing history.
One of Mr. Geist’s wise companions from the Internet Society, former CRTC Commissioner Konrad Von Finckenstein, was helpful when he appeared before a Senate Committee on June 21st. He suggested the CRTC should only use these 9(1)e powers to ask YouTube to supplement (not replace) algorithmic recommendations with Canadian videos that are responsive to viewers’ search queries or consumption habits.
If C-11 passes and the CRTC convenes its public hearings to consider “showcasing and discoverability” expect a common sense solution like that advanced by Mr Von Finckenstein to find a lot of support.
The CBC will appeal the CRTC’s censure of CBF-FM and two Radio-Canada radio hosts in the N-Word controversy following a public backlash in Québec and demands from Premier François Legault and Radio-Canada journalists to take the CRTC to Federal Court.
The CBC press release announcing the appeal is a marvel of craft: the public broadcaster issues a full throated apology but states categorically the CRTC has no right to tell journalists what to say. CBC lawyers may have difficulty convincing a federal judge that the protections of journalistic independence in the Broadcasting Act go that far, but they still have a good case that the CRTC erred in completely ignoring that legislative provision in its decision.
There are two further insightful commentaries on the controversy from Québec journalists, one for anglophones written by Jérome Lussier and the other in French authored by Vanessa Destiné.
On Mediapolicy.ca I completed my two-part analysis of the CRTC’s renewal of the CBC licence which was released just before the N-Word decision. I argue the Commission made hasty and unnecessary regulatory changes that may leave the public broadcaster’s programming (especially local news) vulnerable to slash and burn from a hostile government.
For some added perspective on public broadcasting, Press Gazette published a good summary of the BBC’s annual report. Although the BBC is better funded and more commercially successful than the CBC, it is unloved by the current Conservative government and so is trying hard to demonstrate its fiscal responsibility.
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Bill C-11 is on summer hiatus but the Washington Post’s J.J. McCullough is spending some time video-campaigning among his fellow Canadian YouTubers to put public pressure on the Senate and the Liberal government to exempt their creator community from the legislation. The lad is a communications genius but he has key facts about the Bill wrong which required me to blog a response.
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The Heritage Minister’s expert panel on regulating Online Harms submitted its final report that leaves the government with some complex policy choices to make. Pollsters at the University of Saskatchewan released their findings on public attitudes towards freedom of expression that may encourage the government.
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Lastly, Postmedia ended its holdout and became the last major Canadian publisher to accept Google’s terms for a deal providing syndicated news to the Google News platform. Its not clear if this impacts Bill C-18, the government’s “FaceGoogle” compensation-for-online-news-content legislation. This is a global story that Press Gazette follows diligently, so expect something soon from them.
On the topic of Postmedia, it is worth checking out Canadaland reporter Jonathan Goldsbie’s tweet chain beginning with National Post columnist Rex Murphy’s unhinged attack on Canadian journalists caught on video (at the event where Convoy organizer Tamara Lich violated her bail conditions) and ending with National Post Editor in Chief Rob Roberts asking extremists to stop abusing his reporters.
Canadian YouTuber and Washington Post columnist J.J. McCullough has a summer DIY: rallying fellow YouTubers to fight Bill C-11.
McCullough was the star of the show on behalf of the Conservative Party during Parliamentary Committee hearings on the Online Streaming Act last month (sheepishly acknowledged in this video on June 4th which six weeks later has nearly 500,000 streams.)
Since then McCullough has made more videos about C-11 and is asking fellow YouTubers and his 800,000 subscribers not to bother with petition-signing but concentrate on mobilizing public opinion against the Bill through YouTube’s network.
If you haven’t caught his act yet, McCullough posts vlogs about C-11, Canadian nationalism, and all manner of politics and popular culture. A gifted explainer, he salts his narratives with libertarian tropes and irreverent cheek.
No doubt the cheek has helped him earn him a bigger audience. When he appeared before the Heritage Committee, he scolded the Liberals for tabling a Bill that would enable autocrats like Hungary’s Viktor Orban to censor their media because, well, Canada did it first. A few logical leaps taken, but quotable as heck.
The insouciance also sees him pushing boundaries like proposing “Quebecreïch” as the name of a sovereign Québec should Canada break apart.
As part of his summer project to evangelize against C-11 he recently appeared on another YouTuber’s channel, the Gary Klutt show, where he aired it out on C-11 for an hour.
After briefly discussing controversial “discoverability” provisions he and other C-11 opponents criticize, McCullough said the Bill would also “mandate Canadian content quotas and Canadian genre quotas” on YouTube.
That is misleading, to choose my words carefully. The Bill exempts You Tube and other uncurated social media platforms from CanCon exhibition requirements like those in place for television and radio. The Bill also exempts social media platforms from any regulation of what YouTubers like McCullough can say, unlike TV or radio which are governed by “abusive comment” and “misinformation” codes.
McCullough also sought to stoke any resentments YouTubers might be feeling about “old media” protecting their parochial interests while continuing to air unwatchable CanCon every evening on television (his words, not mine).
The “old guard” is so jealous of the new media, McCullough said in earnest, they want to regulate YouTube so that it becomes “less attractive” and less distinct from conventional Canadian television.
This inspired his host to chime in that old media is “just like Walmart,” supporting minimum wage laws to “minimize competition from smaller stores that can’t pay that wage.” In reply, McCullough either mumbled “yes, that’s fair” or choked on his coffee, it was difficult to tell.
As of now, what little we know about public opinion on Bill C-11 suggests that McCullough has his work cut out for him.
A Nanos poll taken in May (before much of the C-11 Parliamentary fireworks began) suggested solid support for C-11.
This should not be too surprising. A 2019 Nanos poll showed that public support for Canadian programming policies in general is very strong.
And a recent opinion poll from the University of Saskatchewan took the temperature of Canadians on freedom of expression, revealing that the rhetoric we are hearing from C-11 opponents might not be an accurate reading of Canadian opinion.
But the summer is only half over and the stream count is rising.
MediaPolicy.ca 