CBC 2.0 at the CRTC Hearings on New Media
By: Gregory Taylor
Thursday, 26 February 2009
CBC/Radio Canada stood before the CRTC to present their case concerning new media, on a day when the Canada’s national public broadcaster was itself in the news over potential revenue shortfalls and the looming possibility of cuts to services. Steven Guiton, the CBC’s Chief Regulatory Officer, accompanied by four other CBC officials, attempted to convince the CRTC that Internet Service Providers have indeed become broadcasting distributors, and as such, should be required to contribute to program funding.
There is a familiarity to CBC presentations at CRTC hearings: the main issue will inevitably come around to funding and the CRTC Chair will eventually remind the CBC that such matters are beyond the regulator’s jurisdiction. At one point in the hearings, CRTC commissioner Timothy Denton asked if the CBC had considered on-air fundraising drives like PBS in the United States. The CBC politely answered “no”, though added they saw no legal barriers.
The on-line world has hit the CBC particularly hard. There is an increased demand for new on-line content from the public broadcaster, especially in areas like digital archives, yet there is no increase in parliamentary funding to accompany this expanded role. An extra $60 million per year, awarded in 2001 by then-Heritage Minister Shiela Copps, is set to expire this year and Finance Minister Jim Flaherty said on Wednesday that CBC already gets "substantial financing" and should not expect more.
The hybrid nature of Canada’s public broadcaster (it reports to both citizens and advertisers) is particularly evident in relation to new media. The CBC inevitably faces comparisons to the BBC and its aggressive move toward on-line programming and extensive digital archives in the UK, yet the BBC receives stable, long-term funding and does not depend upon advertising revenues. The CBC works within very different parameters and views an ISP levy as a potential source of revenue for new on-line material.
The CBC emphasized to the CRTC that new media allow for dialogue with Canadians in ways never possible in traditional broadcasting, yet consistent with the CBC’s mandate as a national public broadcaster. According to the CBC panel, during the recent visit by President Barack Obama, 16, 000 Canadians were engaged in exchanges on CBC journalist blogs during the day.
The CBC sees no new parliamentary funding on is horizon and on-line advertising has simply failed to materialize. Weak ad revenues for on-line content are not a product of the current economic recession. Advertising on the internet thus far has proven lucrative for search engines and classified sites, not for content providers. This is not to say internet content is not being viewed (Newsworld’s on-line streaming capacity was close to capacity during the hours of the Obama visit), the industry has simply thus far been unable to find a way to monetize the on-line product. The CBC is developing new media content and promoting Canadian content by offering programs on new services such as Apple’s iTunes, where producers share in any extra revenues.
Like on-line ads, iTunes sales have not proven adequate to cover the costs of producing new media content. The CBC remains upbeat: “hopefully when the money flows, we’ll have an engaged audience”.
Expect ISPs to present strong arguments that any new revenues should not be flowing from their bottom line.
gregory.taylor2@mail.mcgill.ca
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Political Star Power at the CRTC Hearings on Canadian Broadcasting in New Media
Wednesday, 25 February 2009
By:Gregory Taylor
The Canadian Wireless Telecommunications Association used a well-known political figure in Ottawa to deliver their message that the 2007 CRTC decision to exempt mobile content from broadcasting regulation should be upheld. Former New Brunswick Premier Bernard Lord was the sole speaker for this industry group who hold a significant stake in the proceedings. A key question of these hearings asks: are measures needed (i.e. a levy on ISPs) to support the promotion and visibility of Canadian broadcasting content in New Media?
The former Premier’s response was clear and blunt: “Not at all”.
At its essence, the debate between Lord/ the CWT and the CRTC commissioners centred around if the fact that wireless companies are providing broadcasting content for consumers, makes them de facto BDUs (broadcasting distribution undertakings – usually cable and satellite providers)? This is a vital distinction for the industry. As a condition of licence, television BDUs in Canada contribute a percentage of their revenues to the production of Canadian content via the Canadian Television Fund. For the last two years, the wireless industry has offered programming on mobile hand sets but has not been required to contribute to the production of content. Lord argued that too define wireless carriers as BDUs “is too broad”, and then asked “what is a BDU in a wireless world”?
There are few issues which so clearly encapsulate the blurring of lines between previously distinct forms of media. Traditionally telecom and broadcasting have been separate zones within the CRTC, with broadcasting reporting to Heritage Canada and telecom under the auspices of Industry Canada. Mobile broadcasting challenges the foundation of this split.
Mobile content has hardly been a success thus far, despite regulatory exemptions, but it would appear the industry has faith in the potential of this service. It was an understatement when Bernard Lord observed that broadcasting via cell phone has “not reached a broad acceptance level”. The Canadian Wireless Telecommunications Association estimates half of wireless users do not even know mobile broadcasting is an option, with only 2% who have watched a video on their cell phones, and only 1% who have watched one of the shows offered by the wireless providers.
However, despite these bleak numbers, the wireless industry still invested $4.3 billion in Canada’s wireless spectrum auction last spring - a number more than triple original forecasts. The Chair pointedly asked the former Premier, “Are all these people wrong”? Lord noted he did not think the same amount would be raised if the auction were held today.
Bernard Lord repeatedly emphasized that any regulations placed upon this nascent industry could impede its development. In a moment of levity, CRTC Chair Konrad von Finckenstein observed “like a good politician, you stay on message”.
The Chair also challenged the Association’s position by noting “if it (mobile broadcasting) doesn’t take off, there’s no levy to be paid”.
The hearings continue until March 11.