The Canadian Radio-television and Telecommunications Commission (the CRTC) released its long-awaited report on the future of programming distribution in Canada. Titled Harnessing Change: The Future of Programming Distribution in Canada, the Report provides an overview of the changes that are taking place in the marketplace, with respect to technology, competition and consumer behaviour. It also proposes some legislative and regulatory amendments designed to support the production, distribution and promotion of Canadian programming in the future.
The genesis of the Report was an Order in Council issued by the Federal Government in September 2017, in which the CRTC was asked to address the following three matters:
- The distribution models of programming that are likely to exist in the future;
- How and through whom Canadians will access that programming; and
- The extent to which these models will ensure a vibrant domestic market that is capable of supporting the continued creation, production and distribution of Canadian programming, in both official languages, including original entertainment and information programming.
The Report was requested by the Federal Government as part of its broader review of the Broadcasting Act and the Telecommunications Act, which had been announced in the 2017 federal budget.
Not surprisingly, the CRTC concludes that "(I)n the future, Canadians will increasingly rely on the Internet to discover and consume music, entertainment, news and information" and that the role of traditional television and radio will be smaller "as they are gradually overtaken by online services." Given the changes that have taken place over the past two decades, there is little doubt that Canadians are increasingly accessing their audio and video programming from online platforms and that these platforms will continue to grow in importance.
The CRTC also emphasizes that the opportunities and risks of the new environment require new strategies and directions and that the approaches used in the past will not work to overcome the challenges and harness the opportunities of the new world.
It is on the issue of how Canada can harness the new distribution models to ensure that there continues to be a vibrant domestic market for Canadian programming that the CRTC makes some interesting and somewhat controversial proposals. These proposals fall into two broad categories: legislative changes and regulatory changes. The former are proposals that the CRTC believes can only be adopted through amendments to the Broadcasting and Telecommunications Acts, whereas the latter includes changes that the CRTC can, and perhaps will, implement on its own initiative over the next few years.
The first legislative change proposed is to replace the current broadcast licensing model with comprehensive and binding service agreements. These new agreements would apply to both Canadian and non-Canadian audio and video services, including traditional broadcasters and new digital service providers. They would provide both incentives for parties to participate in the new system and require commitments from them to ensure that Canada's longstanding cultural objectives can still be achieved.
The second legislative change involves restructuring Canada's funding strategy for the production of Canadian programming. Specifically, the CRTC is proposing that the current funding model be revised and expanded to include the participation of television service providers, radio stations, and wireless and Internet service providers (ISPs). Incorporating wireless carriers and ISPs into this program funding model would require legislative change. According to the CRTC, an integrated fund could be revenue-neutral and would not require Canadian consumers to incur additional costs.
The third legislative change involves developing new strategies: (i) to enable the export of Canadian content, (ii) to fund research programs and invest in new technologies; (iii) to develop inclusive leadership in key creative positions; and (iv) to improve data collection for managing and monitoring the monetization of content rights.
As for the regulatory frameworks that fall within the CRTC's authority, the CRTC proposed a number of potential changes it might consider, including:
- Re-examining the regulatory approach to radio to develop innovative ways for this sector to promote Canadian artists and music in the digital environment;
- Examining ways to support television news production through subscription revenues;
- Re-examining the role and effectiveness of the existing regulatory approach to online broadcasting distribution undertakings;
- Considering group-based approaches to the licensing of radio stations and broadcasting distributors, similar to those used for television services;
- Considering new approaches and technologies for content identification and tracking to provide improved data analytics; and
- Updating definitions of Canadian programming expenditures in light of the digital environment.
While the CRTC's recommendations for legislative and regulatory change are short on detail and somewhat controversial, the Report provides the Federal Government with a research-based vision of the future as it proceeds to review and modernize the Broadcasting Act and the Telecommunications Act.