Commercial radio stations no longer have the means to meet the needs of their listeners while satisfying the expectations of their advertisers, Cogeco Media executives ruled Tuesday, who warn that if the Canadian Radio-television and Telecommunications Commission ( CRTC) does not change the rules of the game quickly, they may have to carry out major restructurings like those that have affected other news media.
Testifying at a CRTC hearing, the president of Cogeco Media, Caroline Paquet, bluntly stated that “radio is currently suffocating” due to the severe regulatory framework to which it is subject, while streaming companies, such as Spotify or Apple Music escape any constraints.
“Online companies and radio stations are fighting for the same advertising revenue, the same audience and the same workforce. However, commercial radio stations unfortunately do not fight on equal terms with online platforms, for the simple reason that they have no regulatory obligations,” she lamented.
“These platforms have no contribution to pay, have no requirement to spend on Canadian content, have no local programming obligation and have no quota to respect. »
This situation means that radio stations are subject to requirements that are “disconnected from the listening habits of listeners,” argued M.me Pack. As a result, advertising revenues for stations that broadcast in French have fallen by 20% in five years, she said.
So far, Cogeco has not carried out a major restructuring in its 21 radio stations as some other media have done in recent months – the TVA Group notably eliminated 547 positions earlier this fall.
But if the CRTC does not change the regulatory framework to offer more financial support to radio stations and toughen the legislative framework for streaming platforms, it could be forced to do so. And if so, local news would be affected first.
“Unfortunately, we notice that some of our peers in the industry have already started to make extremely difficult decisions,” observed Cogeco’s vice-president of regulatory and government affairs, Paul Beaudry.
“We haven’t done it – yet. But we don’t want to have to make those decisions. And given that news production is one of the most expensive expenses for stations like ours, we say to ourselves that acting quickly […] establishing without further delay a fund that could help finance news, and in particular help broadcasters, would be extremely wise. »
Mme Paquet, meanwhile, warned that “without establishing fair rules for traditional broadcasters, hundreds of stations will close and thousands of jobs will disappear.”
“We will see the creation of media deserts from coast to coast. The future of commercial radio and everything they represent is in your hands today,” she told the CRTC commissioners.
Rogers makes similar comments
The presentation by Cogeco executives took place during the second week of the CRTC’s public consultations in response to the Online Streaming Act, which received royal assent in April.
This law aims to modernize federal legislation to require digital platforms such as Netflix, YouTube and TikTok to contribute to and promote Canadian content.
The CRTC, which is responsible for governing the country’s broadcasting sector, is exploring the possibility of requiring streaming services to make an initial contribution to the Canadian content system and putting them on an equal footing with local businesses, which are already required to support Canadian content.
At the same hearing, executives from Rogers Communications argued that online streaming giants should be forced to pay 2% of their annual revenue to Canada to support Canadian and Indigenous content.
The Toronto-based company noted that it and its competitors are held back by an “oppressive” regulatory structure that doesn’t apply the same rules to digital companies that have disrupted the industry.
In the short term, Rogers has asked the CRTC to create a temporary information fund to help subsidize private television and radio stations using 30% of the contributions it asks these online services to make.
“We operate in an information-heavy regulatory environment,” recalled Colette Watson, president of Rogers Sports and Media.
“It’s really difficult to continue planning for the future when we’re stuck in 1995 with a system. »
Loss of subscribers
Dean Shaikh, Rogers’ senior vice president of regulatory affairs, said the company was losing subscribers and viewers to online competitors.
“The outcome we’re looking for here is that we can compete with online broadcasters,” he told CRTC members.
“We are not looking for protections, but to benefit from the same flexibility that could be granted to online broadcasters. »
According to him, the adoption by Ottawa of the Online streaming law and its implementation by the regulatory authority “constitutes a means of modernizing the regulatory framework for broadcasting in Canada, which should have been put in place long ago”.
“Our proposal is based on the clear expectation that the board will take meaningful action to alleviate the direct financial obligations of Canadian ownership groups,” said Mr. Shaikh.
“It is no longer fair or sustainable for the Canadian broadcasting industry to be the primary source of funding for all stakeholders in the system. »
Rogers’ proposed 2% contribution would apply to “unaffiliated foreign and Canadian online companies that have a significant impact on the Canadian broadcasting system.” These companies are defined as online video and audio content distributors with annual revenues in Canada of at least $50 million and $25 million, respectively.
The company clarified that it did not want the mandatory contribution to apply to content creators on social media, but rather to the platforms that host them.
Last month, Rogers closed its CityNews Ottawa radio station and laid off newsroom staff, citing declining audiences and regulatory challenges.
Companies like Spotify, Netflix and Amazon are due to testify before the CRTC in the coming days.