Op-ed: CRTC surprises by not shaking up radio rules

What does the CRTC's just-released rules regarding radio in Canada mean to the marketing community? Most advertisers will likely greet the decision with a collective shrug of the shoulders, since no fundamental changes to the regulated programming structure have been decreed, says op-ed writer David Bray. What he believes will be intriguing is how new media continue their onslaught and how conventional radio defends its traditional base.

Last Friday, the Canadian Radio-television and Telecommunications Commission announced the results of its commercial radio policy review. The process began with four intense days of hearings held this past May in Gatineau, Quebec. Since then, members of the broadcast, music and advertising industries have been anxiously waiting for the word to come down. The surprising payoff? The regulations were not altered.

One portion of the decision that did not attract much attention, but perhaps should have, was L-band licensees – which ‘will be free to develop whatever broadcast services they believe will be of the greatest interest to the listening public.’ Remember that DAB stagnated largely because stations were limited to replication of existing AM/FM programming, with the exception of 14 hours per week. Consumers weren’t willing to buy new receivers unless they could get alternative programming. Bottom Line: Look for innovative, niche and multicultural broadcasters to exploit this in a big way.

Let’s take a look at the highlights, and most importantly, the ramifications of the decision. The CRTC made mention of the stiff competition the medium faces from new regulated and unregulated technologies for the distribution of music (MP3 players, iPods, Internet radio, podcasting, downloading, satellite radio and cellphone radio). ‘The key challenge facing the radio industry is to remain relevant’ in the face of such new technologies, said CRTC chairman Charles Dalfen.

Still, little in the review beyond new approaches to Canadian content development directly addresses these issues. While it was widely expected that a bonus or quota system for new and emerging artists would be introduced, the minimum level of Cancon remains at 35% without further restrictions. Upping it to 40% was considered, but rejected due to the competitive climate in which radio finds itself.

Regulations were changed for classical (raised to 25% from 10%) and jazz and blues (up to 20% from 10%), but this will have an effect on relatively few stations. Bottom line: The CRTC essentially deferred to broadcasters by not imposing more taxing regulations while they are gearing up for the fight with outside influences.

Some important changes were made in the approach to Canadian content development (CCD) contributions. The basic contribution system would be based on a radio station’s revenues, as opposed to the size of the market in which it operates. The CAB issued a release saying that ‘the increased burden that will result from tying these initiatives to broadcasters’ revenues is of some concern.’ Bottom line: This is the way it always should have been – pay on the ability to do so. Smaller niche stations will be the grateful winners in this scenario.

Bottom line: I have a sense that the real review of radio will be conducted by the listeners who are being confronted with all of these choices. Stay tuned.

David Bray is SVP of Toronto’s Hennessy & Bray Communications.