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Speech by Scott Hutton, Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission

Mar 27, 2014

Source: Canadian Radio-television and Telecommunications Commission

To the Standing Committee on Canadian Heritage

Ottawa, Ontario
March 27, 2014

Check against delivery

 Thank you, Mr. Chair, for inviting us to meet with your Committee. With me today is Annie Laflamme, Director of Radio Policy and Applications.

We welcome this opportunity to explain the many ways that the CRTC is helping to foster a diverse radio sector in this country. And how this sector, in turn, contributes to Canada’s music industry.

Today, Canadians have access to over 1,150 commercial, public, and campus and community radio stations that offer a variety of formats in English and French, as well as in many other languages.

Although the results are only preliminary at this point, it appears that the commercial radio industry maintained the course in 2013. These stations have reported total revenues of $1.62 billion and pre-tax profits of $331 million. I would caution, however, that these totals may well change once they are finalized.

Competition for new licences is an additional indication of the sector’s vitality. In the last two years, the CRTC has issued close to 50 new licences. These applications are a vote of confidence in radio’s future.

Another positive sign is the success of Canadian performers. Many Canadian artists are now household names around the globe. We see them perform on the world’s biggest stages and hear their songs in films and TV shows. We feel a sense of pride when they are nominated for Juno and Felix awards in this country, or the Grammy’s in the U.S. and the Prix Victoire awards in France.

We sometimes forget that most of these artists got their start on Canada’s airwaves.

Over the years, the CRTC’s regulatory policies and licensing decisions have supported and helped to promote Canadian music. For example, 35% of the songs played by English-language commercial radio stations must be Canadian. French-language stations have an additional requirement. They must ensure that 65% of the songs they broadcast are in French.

Back in 2006, the Commission adopted a new approach for the commercial radio sector. We decided to put additional emphasis on the creation and promotion of audio content through the development of Canadian musical and spoken-word talent.

The revised policy requires radio stations to support FACTOR and MUSICACTION, which play an important role in the development of Canadian talent, including new and emerging artists. Stations must also continue to make contributions to two funds that have been in existence since 1998: the Radio Starmaker Fund and Fonds Radiostar.

As a result, over the past six years, commercial stations have invested more than $280 million to support, promote and train Canadian musical and spoken-word talent.

This approach is helping to strengthen Canadian talent and increase the amount of high-quality Canadian content, in both English and French.

To ensure that Canadian music remains vibrant, it is important to feature new and emerging artists. All radio stations in the country advance this goal. But campus and community radio stations play an especially important role. To ensure they have access to a predictable source of funding, commercial stations must now make annual contributions to the Community Radio Fund of Canada.

A 2013 report by Nielsen found that 61% of Canadians tune in to radio stations to discover music that is new to them. And nearly half of the new music they encounter is broadcast by a radio station. This is the highest share among all sources, including YouTube, the iTunes store and social media.

What’s especially encouraging is that Canadians are keen to listen to made-in-Canada music. Polling by Canadian Heritage in 2012 revealed that 92% of Canadians strongly or somewhat agree that it’s important that Canadians have access to music by Canadian artists.

This high level of interest is also reflected in the television broadcast of music award shows like the Junos, the East Coast Music Awards and the Gala de l’ADISQ. The CRTC has designated these shows as programs of national interest to help promote and market Canadian music—fuelling demand to hear it on the radio.

Of course, radio isn’t the only way that people access music today. Thanks to the multitude of online services available, music has become a commodity that can be packaged and delivered in countless ways.

According to the CRTC’s 2013 Communications Monitoring Report, Canadians are listening to audio content on multiple platforms:

  •     20% stream the signal of an AM or FM station over the Internet
  •     14% stream audio on a tablet
  •     13% stream a personalized Internet music service, and
  •     8% stream audio on a smartphone.

Younger Canadians, in particular, have been adopting these platforms in growing numbers. Even so, radio is still an attractive medium for many. People tune in to these stations for local news, the latest traffic and weather updates and, of course, to listen to music or talk-radio personalities.  

So radio is no longer just about music. Increasingly, it’s about being close to the audience—helping listeners connect to both the content and people that appeal to their individual interests.  Connecting with individuals and serving the local community is the key to success in today’s niche markets.

Canadian artists and the music industry as a whole also have had to evolve to keep pace with these technological trends. They are undeniably affected by these changes, sometimes adversely.  But it is also true that technology can provide musicians with new opportunities to reach more people with great content that happens to be Canadian.

To be successful in today’s marketplace, artists can no longer concentrate on writing, recording and playing their music. They have to learn the business skills to manage their brand as well as every aspect of their careers—from touring to marketing and promotion to maintaining an active social media presence.

We are sensitive to the issues facing both the radio and music industry in this fast-changing environment. We continue to work in conjunction with the radio sector and government to further strengthen Canada’s music industry.

As the commercial radio sector has remained relatively stable in recent years, both financially and in terms of tuning, the Commission is of the view that a comprehensive review is not necessary. Nonetheless, we believe the sector would benefit from an update of certain regulatory and policy elements.

So last October, we issued a call for comments on a targeted policy review for the commercial radio sector.

The first phase of comments recently came to an end in late January.  We are currently in the second phase of this process. It is premature to give you an update, as the record is still open.

That said, we would certainly be happy to discuss any other aspect of this presentation and to answer your questions.

 

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