Satellite Radio Wants Regulatory Relief in Canada
Tuesday, June 26, 2012 at 8:35AM
Full disclosure: I like satellite radio. A lot. I have a receiver in my office and another one in my car. My wife's new SUV has it.
Yes, there are many annoying things about satellite radio--for example, if SiriusXM is now one company, why can't I get all the Sirius channels on my XM radio?--but I find it most uselful as music and information source.
I remember when satellite radio came to Canada back in 2005. Terrestrial broadcasters were (a) secretly afraid that it would siphon off a significant amount of listenership; and (b) angry at what they saw as a regulatory free ride when it came to the issue of Canadian content.
Point (a) never happened. Ratings for terrestrial radio stayed strong, even with all the incentives offered by the two satellite networks and the widespread availability of satellite radio in new cars.
Meanwhile, XM and Sirius lost buckets and buckets and buckets of money, prompting a merger in the US and later here in Canada.
Now SiriusXM's first license term is almost up. They have until August 31 to sort things out with the CRTC so it can be renewed. And here's where it gets tricky.
One of the conditions of granting the original license was a hefty Canadian content development committment. The square-peg-round-hole issue of CanCon was addressed by demanding that the satellite radio companies commit 5% of gross revenues to developing new content.
That's a lot, especially considering that the committment terrestrial radio stations is 0.5%--ten times less. And Sirius XM Canada is not profitable. They say they're losing money at "a disturbing rate."
And it's not like Canadian music development needs more money. We are the envy of the world when it comes to providing financial assistance for our muscians. There are those who say that the various organizations entrused with doling out this cash have more than they can spend. And with the BCE purchase of Astral, tens of millions of new dollars will soon be injected into the system.
(When there's a merger like this, a condition of the sale is to put aside a sizeable percentage of the purchase price for Canadian talent/content development.)
But CanCon is a political minefield. There's not a more contentious amongst broadcasters, artists, managers, labels, publishers and the Heritage Ministry. Any request to back off CanCon obligations is received as not just un-Canadian but downright traiterous. (Trust me: I've had first-hand experience with this culture war.)
Read more about SiriusXM Canada's issues here. Everyone will be watching closely.
Reader Comments (5)
I love CanCon. It succeeded in its goal to nurture and promote Candian talent. Is it still relevant for Canadian music to flourish? YES IT IS. Just look at how little Canadian content there is on TV and in Cinemas. (At least in English) Either Canadian TV broadcasters step up voluntarily and start developing unique Candian content not just Canadian verions of American shows or they need stronger rules and regulations. Canadian cinema is a whole other mess. You can't tell me that these giant multiplex theatres don't have the resources to dedicate one or two of their screens to CanCon and not just in the big cities but in each city that has a theatre. After all if our tax dollars are spent by the National Film Board of Canada to produce films then give us a chance to see them easily and on a big screen.
tell us more about your "first-hand experience with this culture war"
I was deeply involved in the CRTC's review of radio in 2005. This is the once-a-decade-or-so time for the CRTC and broadcasters to discuss changes in the marketplace, consumer behavior and technology to see if regulatory changes are warranted. The position of my group was that given the unregulated nature of the Internet, CanCon rules for radio needed to be modified to reflect some new realities. Our main point was that broadcasters should be rewarded for taking chances by playing new, unfamiliar and emerging artists. It would have created a new framework for exposing new music over the air on commercial radio instead of...well, hearing the Tragically Hip one more time.
A couple of things.
1. Can-Con has been very successful. So successful, in fact, that it has created massive amounts of recorded Canadian music. Once achieved, and the industry was established and viable, the rate of 30% for radio play should have been decreased to 25%. Instead, it was increased to 35% - and the defacto rate for a new radio application is 40%. Ridiculous.
2. Alluding to Alan's point, rather than the all or nothing of the current MAPL system (1 point gets 0% but a 2 point for a domestic artist covering a foreign song gets 100%, the same credit as the 4 point indy singer-songwriter recording his own material in his basement), playing a 4 point song should get a station a better credit than a 3 point, which should get a better credit than a 2 point - and a 1 point should count for something. This is easy to do in the era where everything is on a hard drive and could get some other artists some exposure - though it might not reduce the Tragically Hip spins.
Yes, there are many annoying things about satellite radio--for example, if SiriusXM is now one company, why can't I get all the Sirius channels on my XM radio?--but I find it most uselful as music and information source.