CIMA, the CRTC and Millions in Support for Canadian Music
CIMA is submitting a report this week to the Canadian Radio-television and Telecommunications Commission that speaks to a pool of funds worth millions to the Canadian music industry; namely, Tangible Benefits.
Here’s what’s important for you to know about Tangible Benefits, and what CIMA is doing to ensure that the Canadian music industry continues to benefit from this important Canadian Content Development fund.
What Are Tangible Benefits?
While “Tangible Benefits” may sound like something from an insurance policy, they’re incredibly important to the creation of independent Canadian music.
The CRTC’s Tangible Benefits policy for commercial radio is quite simple: every time one radio broadcaster purchases another, they are required to contribute six percent of the overall value of that transaction to initiatives that will help better develop Canadian content, including music. Specifically, they are required to contribute:
- 3 percent to Radio Starmaker or Fonds Radiostar;
- 1.5 percent to FACTOR or MUSICACTION;
- 1 percent to any initiative the broadcaster chooses that helps develop Canadian Content; and,
- 0.5 percent to the Community Radio Fund of Canada.
Given that ownership transfers in radio broadcasting tend to be highly valuable, this six percent can be quite substantial. This year, the Bell-Astral merger alone yielded over $246.9 million in tangible benefits, $71.5 million of which will go to sound recording and music activities over the next seven years.
Alright, what has CIMA asked for?
- The Allocation of Benefits Should Change to Better Support Emerging Talent
FACTOR and MUSICACTION are integral foundations to Canada’s music industry, with a track record of using funds from radio broadcasters transparently to promote emerging Canadian musical talent. As such, the benefit allocation scheme should be amended to provide FACTOR and MUSICACTION a bigger share:
- 3 Percent to Radio Starmaker or Fonds Radiostar;
- 2 Percent to FACTOR or MUSICACTION
- 0.5 Percent to Any Initiative that Helps Develop Canadian Content; and,
- 0.5 Percent to the Community Radio Fund of Canada.
No additional exemptions should be granted to Tangible Benefit obligations
Currently, the Commission allows broadcasters to purchase other broadcasters that have been unprofitable for a number of years without the obligation to pay tangible benefits. CIMA believes that this is as far as exemption criteria should go.
Broadcasters should be required to pay all pre-existing Tangible Benefits when purchasing another broadcaster
Consolidation in Canada’s broadcasting sector occasionally means that a purchasing broadcaster will attempt to buy out another radio or television station that owes outstanding tangible benefits. In this case, CIMA is of the position that the purchasing broadcaster should pay all pre-existing tangible benefits in addition to the new tangible benefits incurred by the new transaction, preferably before the approval of the transaction.
Online radio revenues should count towards Tangible Benefits
Each passing year, the rate of online radio listenership increases. Canada is no exception to this trend, yet the CRTC does not currently value a station’s online holdings when assessing tangible benefits. CIMA believes that it is important to the sustainability and relevancy of the tangible benefit policy for the increasing value of online radio to be included as a licenced holding when determining the value of the tangible benefits package.
Read the full submission here.