CIMA Submits Recommendations to CRTC Review of Commercial Radio Policy

On behalf of the Canadian independent music industry, CIMA has submitted an intervention to a CRTC Consultation on its commercial radio policy. Last revised in 2006, the Commission’s commercial radio policy was responsible for over $55 million in contributions to Canadian music creation, including $11.1 million to FACTOR. The objective of CIMA’s intervention is to ensure that the policy helps broadcasters better develop and showcase independent Canadian content, particularly from emerging artists.

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What is the Commercial Radio Policy?

The Commercial Radio Policy is the CRTC’s tool to ensure that the Commercial radio sector supports the objectives of the Broadcasting Act, which include provisions that broadcasters should help support and develop new Canadian content, such as music. Specifically, the Commission uses the policy to enforce Canadian Content rules and require broadcasters to contribute financially to it’s creation.

CIMA’s submission focused specifically on these financial contributions from broadcasters, called Canadian Content Development (CCD) payments. CCD payments come in two forms:

  • Annual contributions: Broadcasters with annual revenue of over $1.25 million must contribute $1,000 plus 0.5% of the portion of the previous year’s revenue that exceeds $1.25 million. Broadcasters may also contribute more than this amount, and frequently do.

  • Contributions arising from changes in ownership: Each time a broadcasting entity is acquired, the purchasing entity must put forward a minimum of 6 percent of the overall value of the transaction towards the creation of Canadian content. These are also called tangible benefits.

What has CIMA Asked For?

The Commission has asked for comments on a series of issues, including its approach to low-power stations, the implementation of HD Radio, radio station compliance with CRTC regulations and technical wording issues within CRTC regulations. The Commission has also opened the door to comments on other matters.

Of these issues, CIMA identified CCD payment shortfalls as the most important issue that could be addressed by Commission action. Our research was able to identify over $1,000,000 in recorded CCD shortfalls in 2013 license renewals of commercial radio stations. Of this, over $686,000 was left unpaid until the end of the license term. 38 percent of commercial radio licensees in this broadcast year had recorded issues.

To remedy this substantial issue, CIMA supported the CRTC’s proposal to levy increased CCD funds for late payment of annual contributions. In order for these late payment charges to be proportionate to the amount time CCD is late, as well as the size of the outstanding amount, CIMA suggested the use of an interest rate as a mechanism for determining the value of any increased CCD. Further, CIMA supported a variety of ideas the Commission put forward to encourage increased CCD compliance in the commercial radio sector.

With regard to HD Radio and Low-Power stations, the Commission asked if these types of radio broadcasters should be exempt from regulations. CIMA advised against this in both cases, arguing that all broadcasters should be subject to equitable regulatory responsibilities, including the obligation to contribute CCD.

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CIMA Argues that Online Radio Should Support CCD

Currently, the CRTC has implemented a policy exempting all “new media” internet-based broadcasting from licensing requirements, including the responsibility to contribute CCD or adhere to Canadian content standards. As a component of our submission, CIMA has put forward a recommendation that the Commission revisit this exemption, allowing the specific activity of online radio retransmission to be included in license requirements. Online radio retransmission occurs when a radio station runs an online stream.

Currently, any additional ad revenue gained from this activity (i.e, banner ads, online-only ads) is not required to be included in data submitted to the Commission, making it exempt from CCD obligations.

This recommendation would require current radio broadcasters to report revenue gained from their online broadcasts and contribute a portion to the creation of Canadian content.

Further CIMA has recommended that a comprehensive review of the CCD system be conducted with regard to current new media trends.

For questions on the radio review, tangible benefits, CIMA’s submission, or anything else, please email Stuart Johnston, CIMA President, at stuart@cimamusic.ca.

To read CIMA’s submission, click here.

To read the supplementary data, click here.

To see other CIMA submissions and reports, click here.