By Howard Law
This is part three of a three part series – read part one here and second part here.
What will “television” look like in 10 years?
With respect to the future of particular services and undertakings, the Commission expects that vertically integrated undertakings (undertakings that own or control programming services as well as distribution services) will continue to have the to leverage their resources and audience to acquire popular and lucrative programming and be well positioned to produce high quality programming made by Canadians. Their critical mass provides these companies with the financial capital needed to succeed both domestically and internationally.
[CRTC chair Jean-Pierre Blais, March 2015]
Barring an unforeseen reversal of political fortunes, the Liberals’ digital reboot of the Broadcasting Act will become law with the support of the Bloc and the NDP.
The question is whether Bill C-11 will achieve its goal of maintaining the production of Canadian media content that nourishes our national identity and supports our democracy.
Critics of C-11 mostly focus, they say, on over-regulation and threats to free speech.
Still others focus their skepticism on whether a modernized broadcasting law can survive internet disruption, so is C-11 worth it?
It is common to hear our regulatory system derided as a relic of broadcast technology, born in the world of scarce radio spectrum. It’s an ahistorical take. The system has been very successful in achieving its Canadian content funding goals throughout the post-spectrum golden age of cable and satellite distribution.
Had it not been for the CRTC exemption for Internet TV in 1999, subsequently renewed twice, Netflix might have found its place as a major American channel on Canadian traditional and online streaming platforms or even in partnership with Canadian television companies.
Nevertheless, Internet technology is a qualitatively different evolution of media distribution technologies. Indeed, despite creating even more global content controllers, it also provides the means to evade gatekeepers by enabling peer-to-peer streaming on hosting platforms such as YouTube and Facebook.
It is this gatekeeper escape that delights internet activists and threatens the long-term cohesion of a system designed for profitable media companies to subsidize cultural programming.
But what is the “long term”? What will media distribution look like in five years, and when will we see what’s on the horizon? It is difficult to fundamentally redesign a regulatory system for a world we cannot yet see.
When CRTC Chairman Jean-Pierre Blais released his “Moving Forward” policy decision in March 2015, he rejected demands to end the Internet TV exemption and bring in the giants. streaming media in the CanCon funding system. Instead, he pugnaciously predicted that by 2025, major Canadian media companies would continue to thrive and cross-subsidize Canadian content.
Just six months later, in October 2015, Blais released the Commission’s Annual Statistical Report which illustrated by all available industry metrics that the internet disruption of Canadian TV viewership by Netflix and YouTube and advertising revenue by Google and Facebook was well underway.
At the time, the figures showed $3 billion in annual Canadian programming expenditures (CED) by Canadian broadcasters and a CanCon contribution of $464 million by cable companies.
Six years later, in the Commission’s 2021 report, those CanCon numbers had dropped to $2.6 billion from CPEs and $397 million from cable companies.
Meanwhile, Internet video revenues in Canada had reached $3.9 billion, a metric the Commission didn’t even bother to estimate in 2015.
Those numbers suggest a $467 million drop in CanCon’s contributions or expenditures since 2015, not even accounting for inflation or GDP growth.
To put that lost $467 million into context, the combined news budget of Canadian private broadcasters is $379 million. Or try another metric: $467 million is the cost to produce 359 original episodes of Murdoch Mysteries at $1.3 million per show.
According to former Heritage Minister Steven Guilbeault, the Online Streaming Act will take an additional $800 million a year from Netflix and other broadcasters and internet hosting platforms, filling the void for several years.
At the very least, C-11 is the finger in the dike. Let’s hope it holds.
Howard Law was director of local media unions for Unifor from 2013 to 2021. He now blogs at mediapolicy.ca.