Satellite Radio with a Canadian Twist

The CRTC released its satellite radio decision earlier today. I'll have more to say about it in next week's column, but the short story is that the Commission has granted licenses to all three proposals but with stronger Canadian content requirements than the two satellite providers had initially offered.

In the case of Sirius and CSR (the two satellite providers), the Commission is calling for a minimum of 8 Canadian channels (they had offered 5) along with maximum of nine foreign channels for every Canadian channel. Moreover, the Commission has set out a wide range of additional requirements including commitments to airplay for new Canadian music and the provision of 5 percent of gross annual revenues for Canadian talent development.

While presumably all parties will complain as the satellite providers will argue that there is too much Canadian content and the traditional radio providers will argue there is too little, the reality is that the CRTC has worked to adapt Canadian content requirements to the satellite environment. The traditional 35% standard simply won't work for satellite providers and while this decision forces those same providers to go beyond their proposals, it might be just close enough to entice them to pursue the opportunities and bring the product to market. Given that there are reportedly already 100,000 grey market customers in Canada does provide some further comfort of the viability of the market.

It is also notable that the the CRTC rejected CRIA's request for inclusion of anti-copying technologies as a condition for the entry of satellite radio. While CRIA implausibly argued that satellite radio will lead to widespread copyright infringement, the Commission has sensibly decided to promote Canadian content by encouraging its availability, not by seeking to lock it down. In doing so, today's big winner are Canadian artists who get a new source of funding and an important new distribution channel.

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