CRTC changes could cost industry 7K jobs: report

A report co-authored by Nordicity and Peter H. Miller forecasts the Let's Talk TV decisions will also likely result in a $400 million drop in spending on Canadian programming by 2020.
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A report co-authored by media consulting firm Nordicity and Peter H. Miller forecasts regulatory changes following the Let’s Talk TV decisions could lead to the loss of nearly 7,000 broadcasting and production jobs and significantly reduce spending on Canadian programming.

The report, titled Canadian Television 2020: Technological and Regulatory Impacts, was commissioned by ACTRA, the Canadian Media Guild, the Directors Guild of Canada, Friends of Canadian Broadcasting and Unifor. The report’s findings look at the potential impact on the broadcasting industry considering a number of the major Let’s Talk TV decisions and regulatory changes, including the elimination of simulcast on the Super Bowl and the elimination of access rules for specialty services.

The report forecasts the Let’s Talk TV decisions (again, as implemented in their current form) could result in a $399 million reduction in Canadian programming expenditures (CPE) by 2020, due to a combination of regulatory change and changing viewer habits, both of which are likely to impact BDU and broadcaster revenues. (Both are committed to funding Canadian programming based on revenue.) Based on revenue projections and historic contribution rates, the report’s authors forecast a possible $352 million overall reduction in CPE across the board, and a $47 million drop in BDU’s contributions to the CMF and other production funds. Overall, the report estimated an overall reduction of $335 million (or 15%) in indie production activity by 2020 (based on a combination of reduction in broadcaster financing, funding and the accompanying decrease in tax credit amounts).

On a broader basis, the report argues the combined effect of the Let’s Talk TV decisions (under which domestic OTT services can operate under the Hybrid OTT Exemption Order) could lead to an increase in cord-cutting, cord-shaving and OTT adoption, as choice proliferates for consumers and replacing traditional TV with OTT TV becomes a more viable option. The authors argue that pre-LTTV per-household OTT adoption rates would be on par with U.S. forecasts, while post-LTTV rates would surpass U.S. rates by 2%, from 54% in the U.S. to 56% here.

These broader changes in the industry influenced the authors’ forecast that 6,830 full-time jobs directly linked to the broadcasting or production sector will be eliminated by 2020. A further 8,300 “spinoff” full-time jobs could also potentially be eliminated from other sectors of the economy as a result of the changes, which in turn could decrease Canada’s GDP by $1.4 billion by 2020. Based on the author’s modelling, they also argue the Let’s Talk TV decisions could result in $970 million decrease in specialty and pay TV revenues, which would account for 23% of their forecast baseline revenue.

When contacted, the CRTC declined to comment specifically on the report. Instead, the regulator sent Playback Daily a statement from a speech Jean Pierre Blais made on March 12 of 2014.

“Our decision this past January was the first step we took down that path. I’ll be honest: it wasn’t universally loved. Some told us it didn’t go far enough. Others said it went too far. We take such criticism in stride. If the players in the industry we regulate were always happy with our decisions, we would not be doing our job – that job is to serve the broader public interest, rather than their specific private interests.

In the speech, Blais questioned the motivation of those criticizing the changes, focusing on Let’s Talk TV’s consumer-facing intent. “If you hear criticisms of our decisions ask yourself this question: Are the arguments advanced by these critics those of the public interest or are they rather those that find their true roots in private entitlement, dressed up to look like they are founded on the broader public interest?”

However, the report argues that the focus should be on “whether the system continues to maximize support for Canadian programming? there is no reason why such consumer interests cannot be met in addition to (italics author’s own) furthering the cause of Canadian programming.”

Story updated on Jan. 5 at 1:22 p.m.

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