Satellite Radio Decision Creates Waves

by SaskMusic

August 5, 2009 in Industry Developments

To Recap: On June 16, the Canadian Radio-Television and Telecommunications Commission (CRTC) approved applications for three subscription-based radio services.

The players: Satellite subscription applicants Canadian Satellite Radio/U.S.-based XM Satellite Radio and the CBC/Standard Broadcasting/U.S.-based Sirius. And, for a terrestrial subscription service (digital), Canadian CHUM/Astral Media.

The CRTC says that the licenses will give better exposure to Canadian artists both here and in the U.S. CRTC requirements for each of the two satellite stations are:
  • At least eight original channels produced in Canada. A maximum of nine foreign channels may be offered for each Canadian channel. (So 8 out of 72 possible offerings must be Canadian-produced).
  • At least 85% of the material on the eight Canadian channels must be Canadian content, of which 25% or more must be "new" music and 25% or more must be by emerging artists. Also, at least 25% must be in French.
The third pay service, to be run by CHUM/Astral, will use land broadcast towers to broadcast their digital service, so they must comply with CANCON regulations of 35% Canadian content (and for French channels, a minimum of 65% French music).

The ruling was immediately criticized by several arts organizations, who said the criteria did not go far enough to protect Canadians from an influx of U.S. content, and did not address content protection (ways to prevent the signals from being downloaded and redistributed illegally).

A statement issued by SOCAN expressed dissatisfaction in that:
  • the Canadian content requirements for satellite radio are inconsistent with existing regulations for commercial radio broadcasters and fail to respect the policy objectives of the Canadian Broadcasting Act;
  • 90% of programming for two of the satellite services will be done outside of Canada and the existing content regulations will not apply to these channels as they do to other Canadian broadcasters;
  • Canadians are being denied their right to reasonable levels of Canadian content on these new services, something that SOCAN consistently insists must apply to all broadcasters operating in Canada

On June 27, a broad coalition of organizations registered an appeal with the federal cabinet in regards to the two satellite radio services. The coalition is seeking an early opportunity to brief the Minister of Canadian Heritage and the opposition critics and consists of national organizations ACTRA, the Canadian Independent Record Production Association, Communications, Energy & Paperworkers Union of Canada, Directors Guild of Canada, National Campus & Community Radio Association, SOCAN, Songwriters Association of Canada, and Writers' Guild of Canada.

A similar initiative was announced by a coalition of francophone cultural organizations.

Independents support the license? Some independent groups are issuing points of view that, to paraphrase, state that the (minimum) 16 new Canadian channels, playing mostly Canadian music, will still get more Canadian music out to the people than we currently have. Indeed, U.S. satellite services already include Canadian artists in their programming simply because they are programming music they like.

One must bear in mind that the organizations appealing the CRTC ruling are extremely knowledgeable on copyright law, CANCON regulations and royalty structures. For example, SOCAN exists to further songwriters' (and thus artists') rights and maximize royalty payouts. They know best what the earning potential of satellite radio is.

In particular, The Canadian Independent Record Production Association (CIRPA) expressed major concern with statements attributed to Indie Pool owner Gregg Terrence, wherein he states that 20,000 independent musical artists support the CRTC's recent decision to award broadcast licenses to two foreign services.

The following was issued in a CIRPA press release:

"I'm not really sure where Mr. Terrence gets his figures, but to claim he speaks for 20,000 Canadian independent recording artists is interesting, to say the least," said CIRPA's Executive Director Cori Ferguson. "Most artists who use his service do not cross-over with CIRPA's members, who have a hand in the release of a substantial number of all English Canadian content albums each year."

"The impression that he speaks for all Canadian independent artists is simply not true. He speaks for himself and his business interests, period," says Ferguson. "At first glance, members of our organization have found Canadian independent artists such as Ember Swift, Stirling, Kathryn Rose, The Salads and Hush Hush in the listing of artists on Mr. Terrence's website, giving the wrong impression that they support Mr. Terrence's positions. There are likely many more artists who similarly would be surprised to find themselves on this list, which includes groups that have broken up, artists that have left the business, aren't Canadian, and people and entities that aren't even recording artists."

Terrence's for-profit company has exclusively supported Canadian Satellite Radio boss John Bitove in his bid to secure a broadcast license for his service in Canada. The CSR application includes financial support for Indie Pool and its customers.

In initial meetings with representatives from CSR (which partnered with XM Radio in the U.S. for its application), CIRPA was offered a financial commitment if it would support the CSR/XM bid. The offer was rescinded when CIRPA stated its position. "Our support was not for sale," Ferguson stated.

While it is true the CRTC has mandated that 25% of the musical selections on Canadian channels must be by emerging Canadian artists, the reality is that when factored across the total programming on all channels available, it amounts to a percentage in the very low single digits. Even when all of the mandated Canadian content on all of the Canadian channels is included, the figure is still south of 10% of total airplay of music on the entire system. It's hardly the tremendous opportunity that Terrence plays it as.

"That works out to be a minimal number of slots a day for emerging artists, and that's only on each of the Canadian channels. There are no requirements for the foreign-programmed channels to play any content from emerging artists," says Ferguson. "With the unknown quantity of Canadian music to be played on satellite radio, it is highly questionable whether this will actually amount to substantial royalties, as Mr. Terrence claims."

"Mr. Terrence's inability to recognize this decision for what it is, a dangerous precedent that could destroy Canadian content regulations in this country, merely demonstrates how out of touch he is with the rest of the artistic community in Canada, as you can see from the list of more than 20 organizations who have served notice that they will appeal this decision," she continued. "I think Mr. Terrence's 'gift horse' may in fact turn out to be a Trojan horse for Canadian broadcasting."

By Lorena Kelly for SaskMusic. Originally published Fall 2005.

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