In September 2007, I wrote a column titled “Canadian Broadcasting Policy for a World of Abundance”, which focused on a report commissioned for the CRTC that recognized that conventional broadcast regulations were crumbling in the face of new technologies and the Internet. As it turns out, the Dunbar-Leblanc report was ahead of its time as the CRTC was not ready for the regulatory overhaul it recommended.
Standing beside two giant screens proclaiming “Age of Abundance”, CRTC Chair Jean-Pierre Blais unveiled the latest round of decisions from the TalkTV hearing and left little doubt that the Commission is now ready to lead with changes that have been a long time in coming. For Canada’s broadcast regulator, it was time to admit that decades-old policies must adapt to a changing environment in which the viewer is in control (or the emperor, in Blais’ words). Those policies were largely built on creating a regulatory wall for the Canadian system with Cancon requirements, genre protection, foreign ownership rules, and simultaneous substitution. Like many walls, the rules shielded the Canadian market from competition, guaranteeing a place for Canadian content and limiting the impact of more popular U.S. programming.
Yet the wall has been steadily crumbling since rules no longer shield Canadian broadcasters or creators from competition. The industry has reacted in different ways to the crumbling wall. Some, such as the Writers’ Guild (or the Ontario government), want to patch the wall by regulating new services such as Netflix. The group issued a release yesterday arguing that the migration to unlicensed platforms raises concerns about medium-to-long term sustainability as they want the CRTC to require Netflix to contribute funds toward Canadian content (ie. a Netflix tax). Others, such as Bell Media, want to build a bigger wall. Last week, Bell Media CEO Kevin Crull called for blocking U.S. channels and adopting measures to make it more difficult for Canadians to access US Netflix.
Yesterday, the CRTC made it clear that it believes the way forward does not involve extending or expanding the regulatory wall. Instead, it recognizes that broadband Internet allows Canadians to effortless circumvent the wall, watching what they want, where they want, and when they want. The new regulatory structure therefore focuses primarily on three ways to tear down the wall by creating a more competitive broadcast environment.
First, the consumer choice that is an integral part of the Internet is being extended to conventional broadcast. The pick-and-pay world of television channels won’t be announced until next week, but yesterday’s decision helped lay the groundwork for pick-and-pay by removing some of the licensing limitations that make it difficult for broadcasters to convince consumers to pay for their service. Under the new rules, genre protection is eliminated, meaning there can be more competition in specialty areas and specialty services will be better able to respond to the market with their programming choices. Moreover, discretionary services with audiences under 200,000 subscribers will be exempt from licensing. All of this is designed to force broadcasters to compete (the elimination of simultaneous substitution, which was likely part of the CRTC’s original plan, would have done so as well). This should create a real market with broadcasters enjoying greater freedom in what they program and consumers finally permitted to make their own subscription choices on a pick-and-pay basis.
Second, the CRTC is changing some of the rules with respect to Canadian content. These include pilot project changes in what counts as Canadian content (an effort to expand the scope of potential Canadian productions), the removal of Cancon requirements during the daytime programming (creating incentives to make bigger investments in prime time programming), and initiatives to promote Canadian content. While some are skeptical about the likelihood of success, the premise is that good enough is no longer good enough. As the wall comes down, Canadian content must stand on its own and these changes are designed to increase the chances of that happening.
Third, the CRTC has been working to address Internet-related competition concerns. The Commission’s decision on Bell’s Mobile TV service brings net neutrality into the discussion as it was concerned that zero-rating would “may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice.” Moreover, yesterday’s decision created a new class of video on demand service known as a hybrid service that borrows from both the regulated video on demand services and the Internet-based video services. The full rules are still to be determined, but the goal would appear to be encourage services such as CraveTV and Shomi to compete in the Internet video space (or face conventional regulation and obligations). Further, it goes without saying that the CRTC did not adopt a Netflix tax, leaving the Internet-only space largely unregulated.
While success is by no means certain, Blais made it clear that the Commission is ready to fight for its new vision of Canadian broadcast regulation. I was in the audience for the speech and the one comment that generated an audible gasp was the following:
If you hear criticisms of our decisions ask yourself this question: Are the arguments advanced by these critics those of the public interest or are they rather those that find their true roots in private entitlement, dressed up to look like they are founded on the broader public interest? This town is full of lobbyists whose job it is to spin their client’s private interests into something else, to wrap themselves up, as it were, in the flag, and to puff about Parliament Hill with an air of shock and dismay. I respect their right to do so, but I respect more the rights, expectations and wishes of Canadians we serve.
In a room full of the clients and their lobbyists, Blais offered his unofficial response to the recent Bell lawsuits against CRTC decisions and the likely backlash against his latest plan: bring it on.
Honestly, anything to dissolve the duopoly is good news. As a consumer, Netflix is a fantastic service and the regulator should permit them whatever business they would like to conduct unless it can show some undue market harm done. The onus should be on the regulator to do this. You don’t want market participants skewing numbers to their advantage.
I think pick & pay is inevitable against the internet broadcaster’s competition. However, this has been an unacceptably late decision. This should have been done twenty years ago. I’m sure there’s problems I don’t understand, but there’s no problem we can’t solve with a little effort right?
I still think cancon is relevant. It should be reviewed given market conditions. I think that’s prudent.
At the end.. this market needs to have more diversity. The moment we take our eyes off that goal, is the moment we’ve started to make mistakes.
I tought they put a stop to substitution with specialty channel. I check last sunday and the Nascar race on Fox was substituted still with TSN3. On Bell TV obviously. When will that stop ?
My understanding is simsub was intended to be an incentive for OTA broadcasters, but Bell TV got an exemption a while back and they are still under the impression that they are.
I expect they have been given a timeline to stop, but if it continues to happen, please lodge a complaint.
Why is it only Bells Mr Crull whinning? This is the second go at CTV for Bell. The first go resulted in the dropping of Canadian shows shot at their Agincourt studios. This time the introduction of automation, more job loss. And the corporation makes how much a year. Like he has done to us that work in the industry sink or swim Mr Greed!
I may need a t-shirt with Jean-Pierre Blais’ face on it…. or perhaps sitting on the Throne of Swords…
The best reason for this decision is that times have changed, and these regulations can’t withstand the abundance of choice through the internet.
The worst reason for this decision is to decide that Canadian culture doesn’t matter. It still does for many reasons: economic, cultural, and everything in between.
I see a lot of talk about how the old regime was broken. But for all the hype about Canadian lobbyists are being disingenuous, I see a white flag to American lobbyists. There isn’t very much for creators and workers in the industry to cheer for. (Maybe the hope that less daytime cancon will lead to bigger investments in prime time cancon.)
I would like to see the term cancon changed to any movie or series filmed in Canada to count and at the same time any so called Canadian movie etc that’s not filmed in Canada to not count.
I know where you are going BUT I dis agree and should still be “creatively” Canadian
so if a Canadian film maker goes to India to make a Canadian POV production about India
YOU say NO to CanCon I would say show percentage of Canadian creative input IE writers / editors / directors ETC
also looking in “reverse”
a Indian “Bollywood” production comes to Canada to FILM a Bollywood written/directed story
your measure is to say YES CanCon Met but I say there is LITTLE Canadian cultural value / Canadian creative effort
and I believe the cultural / creative side is more important to Canada and THAT NEEDS protection
If you were to ask most would you support a ban of all American content 99% would say no.
Lisa, I’ll buy one of those shirts!
Hooray for Mr. Blais! Finally someone with the druthers to stand up and act in the interests of Canadians, rather than big business and their cronies.
Cheers for Mr. Blais!