Satellite Radio Developments

by SaskMusic

August 5, 2009 in Industry Developments

On June 16, the Canadian Radio-Television and Telecommunications Commission (CRTC) approved applications for three subscription-based radio services, but imposed strong Canadian content rules on the two satellite services. The third, a digital service broadcast by land towers, already included a substantial Canadian content component in its proposal.

The (satellite subscription) applicants were Canadian Satellite Radio, partnering with Washington-based XM Satellite Radio Holdings Inc., and the CBC and Standard Broadcasting, partnering with New York-based satellite service Sirius . The third pay service (for a terrestrial subscription service) is from CHUM and Montreal-based Astral Media.

"These licenses will harness new technologies for Canadians and give Canadian talent exposure to listeners across Canada and indeed, North America... through new Canadian channels and airplay on U.S. channels," said Charles Dalfen, chairperson of the CRTC.

The CRTC has required that the two satellite services must offer:

* At least eight original channels produced in Canada. A maximum of nine foreign channels may be offered for each Canadian channel.
* At least 85% of the musical selections and spoken-word programming broadcast on the Canadian channels must be Canadian.
* At least 25% of the Canadian channels must be in the French language.
* At least 25% of the musical selections on the Canadian channels must be new Canadian music.
* A further 25% of the selections must be by emerging Canadian artists.

The third pay service, to be run by CHUM and Montreal-based Astral Media, will use land broadcast towers to broadcast their digital service. That service must comply with current regulations under the Broadcasting Act, including 35% Canadian content and for French channels, a minimum of 65% French music.

Satellite radio offers commercial-free, near CD-quality sound no matter where listeners are in the country. It's delivered by a network of satellites, and not through the AM or FM band, which have distance and quality limitations. Listening to satellite radio requires specialized equipment, such as a receiver for your home or car. The receiver can either be a small device that hooks up to a home stereo or boom box, or it can be a dedicated radio that's installed in your car. One of the American companies offering satellite radio recently introduced a handheld receiver that would cost about $350 US.

Most receivers cost between $70 and $300 each, depending on the make, installation costs, and optional audio enhancement extras. On top of the cost of the receiver, you'll have to pay a monthly subscription fee.

In the United States, where satellite radio has been in operation for several years, receivers are a dealer option in some cars. The proposed subscription fees are around $13 per month. Laura Nenych, with Ryerson University's communications department, said the niche channels appeal to people who spend a lot of time in their vehicles, such as commuters or salespeople. There are reports that tens of thousands of Canadians have already tapped into the grey market, and are getting American satellite radio signals.

According to critics, the Canadian content regulations don't go far enough to protect domestic creators.

Friends of Canadian Broadcasting, a media watchdog and lobby group, was among those who deplored the June 16 announcement from the broadcast regulator setting out rules for satellite radio in Canada. The group indicated it would join a number of arts organizations, saying it may appeal to federal cabinet or through the courts.

Friends of Canadian Broadcasting is worried about an influx of U.S. audio programming with spokesperson Ian Morrison calling the decision "a pipeline for U.S. radio programs direct to Canada, with little in return for our country."

Others who came out against the announcement include the Canadian Recording Industry Association, and ACTRA, the national performers' union.

"The CRTC has yet again shown it's prepared to allow our broadcasting system to be dominated by pre-packaged foreign programming," said Stephen Waddell, ACTRA's national executive director. "The CRTC has permitted Canada's private broadcasters to fill their prime time TV schedules with U.S. programs. The CRTC's decision on satellite radio creates a precedent that will allow Canadian digital radio to be predominantly U.S. programming."

The Canadian Recording Industry Association (CRIA) commented, "Canada's broadcast regulator failed to recognize the opportunity to hold the line on music piracy - threatening emerging online music businesses - and undervalued Canadian musical talent in a short-sighted decision on digital subscription radio". CRIA President Graham Henderson stated, "The CRTC's failure to ensure that the new digital subscription radio services hold the line against music piracy is short-sighted and a tremendous disappointment. There are relatively inexpensive and simple technological fixes out there. We had offered to work with the services, but the CRTC elected not to address this important issue. Furthermore, it threatens emerging online music businesses that are the natural partners of digital subscription services."

CRIA had urged the CRTC to exercise its authority to require any new digital subscription service to adopt content protection measures preventing digital signals from being downloaded, edited into individual songs and redistributed through peer-to-peer music swapping services and by other unauthorized means. The Commission's licensing framework and accompanying decisions failed entirely to address this issue. In addition, CRIA had requested that any new subscription radio service respect the policy objectives of Canada's Broadcasting Act and make necessary commitments to Canadian content.

"It is unfortunate that the CRTC did not demand more from the proposed new services. While its approach to emerging Canadian talent warrants mention as innovative, overall its licensing framework represents a missed opportunity to offer Canadian consumers new means of accessing a significant volume of their favourite Canadian music," says Mr. Henderson. The decisions require the services to carry Canadian programming only on Canadian-specific channels, for a total of less than 10% of the overall available programming."

The Canadian Association of Broadcasters also questioned the fairness of the CRTC decision, with president Glenn O'Farrell worried that subscription radio will compete for existing audiences of conventional radio.

At a media conference June 17, John Bitove, chief executive of the Canadian Satellite Radio bid, dismissed the possibility of appeals and said he expects an imminent initial public offering for his company. "We could almost ask all of the bankers and brokers to take a number at the door on proposals," Bitove said.

Indie Pool, an agency representing thousands of independent Canadian recording artists, saw the decision as good news. Just last month, the company had called on the CRTC to change its Canadian content regulations for traditional radio in order to promote lesser-known artists.

The decision on content from new artists is better than Indie Pool had expected. President Gregg Terrence says that independent artists will benefit from the new services and that many U.S. satellite music channels are already playing independent Canadian artists like the Arcade Fire.

Stakeholders in the industry have about six weeks to decide on whether to appeal.

(compiled from Hawkestone media release and CBC news site)

By Lorena Kelly for SaskMusic. Originally published June 2005.

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