Canadian Broadcasting Policy at Issue: From Marconi to Netflix
Author: Simon Claus
Home university: Université du Québec à Montréal
Education level: Doctorate in Communications
In the late 1920s, when radio was still in its infancy in Canada–even though the first radio station began transmitting in Quebec in 1918–many Canadian listeners turned to U.S. stations. As a result of that situation, on December 6, 1928, the Royal Commission on Broadcasting was created. Ten months later, John Aird submitted his report stating, “[Translation] The federal government should intervene to counter commercial forces that are harmful to the development and protection of Canadian identity” (Filion, 1997, 72). In a context of technological, economic and social changes related to the development of radio, the goal was to put in place a series of measures aimed at strengthening the Canadian media system, thereby preserving the dynamism of local culture and national identity. Nearly 90 years later, the development of huge economic players,Footnote 1 mostly from Silicon Valley, again raises many economic, political and cultural issues. These include the way these companies call into question the “historic” organization of information and cultural industries (ICI) and develop their strategies on a transnational scale, fully benefiting from national infrastructure to disseminate content and provide their services with little concern for bordering states and their regulations, whether it is tax legislation or cultural policy.
Legal frameworks for media are based on the idea that they are not goods and services “like the others.” They have symbolic significance and are deemed to be in the public interest to the extent that they are characterized by the functions of “[Translation] information, education, entertainment and advertising [and they] structure the agenda of social debates, allow us to share experiences, and provide us with most of the knowledge of the world in which welive” (Raboy, 2000, XVII). The 1991 Broadcasting Act defines broadcasting as “a public service essential to the maintenance and enhancement of national identity and cultural sovereignty.” It is therefore within the framework of hierarchical regulation where “[Translation] the activity of a system’s players is coordinated by a higher central authority that defines the objectives pursued by the system and organizes the framework for social action” (Vedel, 2003, 1).
One of the consequences of the changes currently affecting the media sector is the calling into question of legal frameworks developed for the media industries. They thus need to be readjusted. On this topic, Marc Raboy and Thierry Vedel (2005, 313) note that “[Translation] the role of media regulation is to determine public interest on an ongoing basis with respect to the particular issues that may exist at a particular time in a country.”
This article aims to review this theme based on the case of broadcasting in Canada. After discussing the fundamentals of the country’s culture and communication policy, we will see how over-the-top television (OTT) stakeholdersFootnote 2 are questioning the foundations of Canadian broadcasting policy. Based on the Let’s Talk TV process and the issue of the regulation of digital players, we will examine the tensions and challenges created by OTT development. We will then initiate a reflection on “discoverability,” which the CRTC is currently working on, while exploring European thinking on the topic.
Foundations of Canada’s telecommunication and broadcasting policy
As far as broadcasting and telecommunication are concerned, Canada began an interventionist policy in the 1920s with a clear objective: to strengthen national identity for a country in search of “cultural emancipation.” Filion (2006, 77) explains that “[Translation] while the Canadian state was being formed, whose autonomy was only recognized by the Statute of Westminster in 1931, the federal government began to broaden itsareas of activity and develop a centralizing project: the creation of a Canadian identity as opposed to popular American culture and other forms of national affirmation.”
The first radio station to broadcast in the world was on Canadian soil: XWA, a Montreal experimental music station. In 1919, XWA, a station operated by Marconi Canada, received the first licence issued by the federal minister under the Radio Telegraph Act. Despite those beginnings, by the end of the 1920s, Canadian radio technology was still in its infancy while American stations broadcast freely throughout the country. The Royal Broadcasting Commission founded in 1929 “[Translation] prescribes the creation of a state system that can create a national spirit and reflect the essence of Canadian citizenship” (Prud’homme, Dubois-Prud’homme and Lapierre, 2011, 65). On May 26, 1932, the first Canadian Radio Broadcasting Act was passed, creating, in particular, the Canadian Broadcasting Commission that would become the CBC / Radio-Canada in 1936. The Canadian Radio Broadcasting Act “set[s] out, for the first time, the principle that the broadcasting system should be Canadian in content and character” (Dewing, 2011, 1). As a result of the technological evolution of the media, social and economic changes and debates of a political and societal nature, this broadcasting regulation was regularly reviewed and changed in accordance with the central challenge of preserving national culture.
In the early 1950s, the Order-in-Council appointing the Royal Commission on National Development in the Arts, Letters and Sciences in Canada (Massey Commission, 1951, xi) emphasized that “it is in the national interest to give encouragement to institutions which express national feeling, promote common understanding and add to the variety and richness of Canadian life, rural as well as urban.” In 1952, the Canadian Broadcasting Corporation / Société Radio-Canada launched the first television stations in Canada.
In 1958, the new Canadian Broadcasting Act created the Office of Broadcasting Governors, which is responsible for the regulation of the Canadian broadcasting system. TheCanadian Broadcasting Act, 1958, allowed the first private television stations to broadcast in the large centres of Canada, and the first Canadian content regulations were developed, requiring that radio and television stations dedicate a specific percentage of their time to broadcasting national content.
The 1991 Broadcasting Act requires that all television stations include a minimum Canadian content of 60% on an annual basis or 50% in prime time. However, further to decisions made following the Let’s Talk TV consultation process, there was a willingness to relax this quota policy.
From 1958 to 1968, the Board of Governors regulated the Canadian broadcasting system, but it did not issue any licences. The organization simply made recommendations. During that decade, profits grew and commercial broadcasting surged (Raboy, 1995). The 1960s were marked by the rise of private television and cable television networks, which spurred interest in developing a new broadcasting policy and mandate for CBC/Radio-Canada.
April 1, 1968 marks the end of the Board of Governors and the founding of the Canadian Radio-Television Commission (CRTC), an independent administrative tribunal. CBC/Radio-Canada was mandated to maintain Canadian unity. Beginning in 1968, the CRTC was delegated the authority to issue licences, whereas the Board of Governors did not have this authority, which was held by the federal government. At the same time, the new Broadcasting Act established that:
Broadcasting undertakings in Canada make use of radio frequencies that are public property and such undertakings constitute a single system, herein referred to as the Canadian broadcasting system, comprising public and private elements; the Canadian broadcasting system should be effectively owned and controlled byCanadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada; (Broadcasting Act, R.S.C. 1970, Chap. B-11)
Whereas the transmission of satellite television signals began in 1972 and so-called “convergence” strategies emerged in the media sector, the Canadian Radio-Television Commission was renamed the Canadian Radio-Television and Telecommunications Commission on April 1, 1976, and it was given an expanded mandate in the telecommunications sector.
Within the ICI, the subsequent years were marked by profound changes, with an increase in global phenomena, a rise in neoliberal policies, financialization of the ICI, an acceleration of concentration in the media sector and a digital explosion (Raboy, 1995, George, 2005, Bouquillion, 2005, Claus, 2015). This period is mainly marked by “[Translation] the rise of cable companies and a deep restructuring of the whole TV industry” (Tremblay and Lacroix, 1991, 4). Thus, in 1991, in a “[Translation] context marked by major economic and technological changes [where] the sociocultural mission of broadcasting is only accomplished with difficulty” (Raboy, 1995, 24), the CRTC adopted the Broadcasting Act, 1991. The years following the adoption of this law do not necessarily mark a period of stability within incumbent cable carriers (ICI), as illustrated by the democratization of the Internet and the advent of microcomputing.
Following the adoption of the Broadcasting Act, 1991, the Cable (Television) Production Fund, now called the Canadian Television Fund, a private non-profit entity that contributes to the funding of national cultural productions and is funded by contributions from broadcasting distribution undertakings (BDUs), was created in (1994). According to the CRTC’s 1997 regulations, BDUs and direct-to-home systems are required to contribute to the creation and presentation of Canadian programs at a minimum of 5% of their annual gross revenues from broadcasting activities. The aim is to guarantee a minimum level of investment in national cultural production.
In parallel with these decisions, Canada put in place foreign ownership rules in the area of culture and communications with the objective of preserving national cultural identity. The Investment Canada Act, 1985 requires that any foreign investment in a cultural industry be reviewed prior to approval. Here we find a classic form of economic nationalism. As directed by the CRTC, “foreign ownership is limited at 20% for any licensee. The level of foreign ownership allowable is higher for a holding corporation‑which is set at 33⅓%” (OECD, 2009, 230). The broadcasting and telecommunications industries are subject to the same foreign ownership restrictions as a result of the 1997 Cabinet Directive. Further to the Governor in Council’s decision of April 8, 1997, the CRTC cannot issue a broadcasting licence to a non-Canadian applicant.
With regard to this willingness to maintain national media ownership, the CRTC’s strategy since the 1980s has been to encourage the building of large infrastructure—information highways—and the creation of major ICI “champions” to innovate and invest in national content. In addition to its broadcasting licensing function, the CRTC makes decisions about mergers, acquisitions and ownership changes in the broadcasting sector. We have found a certain “laissez-faire” attitude by Canada leading to a high degree of concentration in the media sector and the emergence of large conglomerates (Raboy, 2000, Claus, 2014b, 2015). As noted by Marc Raboy (1995, 114), “[Translation] Government complacency regarding the cable distribution sector’s interests can be seen as a general bias toward industrial development as a priority pillar of broadcasting policy.” For this purpose, the public body put in place a tangible benefits policy, which requires a BDU merger/acquisition to provide contributions, particularly for local production financing, corresponding to approximately 10% of the value of the transaction (Claus, 2014b). The policy of the regulatory body is therefore that the consolidation of Canadian cultural identity as part of a national economic strategy should be based on the establishment of a strong Canadian broadcasting system consisting of major champions.
In the 20th century, it may be considered that Canadian broadcasting has asserted itself as an essential tool for Canada’s cultural construct—a diverse culture that takes into account the different local realities for its unification and emancipation. It may also be noted that, since its inception, the broadcasting regulatory framework appears to have been engaged in a race with the social, technological and economic changes that are affecting the networks for which it was developed, and the changes currently affecting the ICIs also follow this rule. In the context of linear-type radio and television services, the regulatory framework for broadcasting now appears to be considerably challenged.
The OTT challenge for the Broadcasting Act
The “transformations” affecting the broadcasting world today are mainly in the context of the individualization of TV consumption and a “reallocation” of cultural spending by individuals (Observatoire de la culture et des communications du Québec, 2009). In fact, since the 1980s, we have seen the following [Translation]:
A shift in the cultural spending of households from the direct purchase of: cultural products (books, records, DVDs, movie or theatre tickets, etc.) toward expenditures for services: cable television, Internet access, mobile telephones, over-the-top programming with access to digitized cultural products; and of equipment: purchase of video devices (television sets, e-readers, home theatre), computers, laptops, tablets, game consoles, e-readers and smart phones (SODEC, 2013, 62).
OTT stakeholders, behind which we find economic players that have put in place socioeconomic models in line with digital development, have taken advantage of these transformations while participating in them. Netflix, at the forefront of OTT television, which arrived in Canada in 2010, saw exponential growth and reached 41%Footnote 3 of Canadians as subscribers in 2015 (CRTC, 2016). Moreover, 96% of those under age 35 report that they have used YouTube in the last few months (Canada Media Fund, 2016). Consequently, OTT is well established in the Canadian media landscape. This strong presence raises many questions, especially since, once a critical mass of users has opted for media service, there is a type of locking, leaving little room for this audience to migrate to other services. The main cause of these tensions is that there are companies that offer—and even produce—programs for the Canadian public and therefore should fall under the definition of a broadcasting undertaking as set out in the Broadcasting Act, 1991, but they do not. In 1999, the CRTC released the Exemption Order for New Media Broadcasting Undertakings,which exempts Internet broadcasters from its Canadian content quotas, a position which was reaffirmed in 2012. Contrary to radio and television, the Internet is developing outside the CRTC’s jurisdiction. The decision was motivated by a willingness not to hinder innovation in the digital sector and to reflect the evolution of certain uses. In 2013, however, the CRTC announced its intention to modernize the broadcasting regulatory framework.
The Let’s Talk TV public hearings: a case for deregulating the media sector
Launched in 2013, the Let’s Talk TV public hearings were conducted in three phases. The first two were intended to ask Canadians for input on the broadcasting sector and to understand the changing uses of television. The third phase, which is of particular interest to us here, asked stakeholders involved in the broadcasting sector to voice their opinions on changes in the broadcasting regulatory framework. Representatives invited to attend the public hearings held in 2014 in Gatineau included around 40 stakeholders from national BDUs, international media companies, such as Google, which owns YouTube, Disney and Netflix, the CBC, consumer advocacy groups, representatives of creators and producers, members of various institutions such as the Fédération culturelle canadienne-française and the governments of Quebec and Ontario.
Although we cannot revisit all of the discussions that marked the Let’s Talk TV public hearings, we will focus on the issue that is of particular interest here. This topic triggers underlying interference without even being proposed by the CRTC: regulation of online video providers.
For BDUs, OTT represents unfair competition insofar as these Internet players are entirely free from the measures imposed by the CRTC, such as content policies or the obligation to participate in the funding of national cultural productions. On this topic, Pierre Dion, Quebecor CEO, stated “[Translation] Netflix and Amazon, Google and others must, in their biggest dreams, wish that regulatory authorities continue to cripple conventional Canadian broadcasters and cable operators” (Marquis, 2014). During the hearings, BDUs attracted attention by asking that media regulations be relaxed in order to compete with certain large foreign content platforms. This is not new rhetoric for media companies (Raboy, 1995) that are calling for a relaxation of broadcasting policies, which they claim would allow BDUs to be more competitive and to better fulfill their mission to develop national culture (Claus, 2015).
For stakeholders involved in cultural creation and production, the development of OTT programming services, which do not have any obligations regarding cultural matters, could weaken dynamism because of the requirement to participate in the funding of domestic productions and negatively affect visibility through national cultural content policies. For example, in 2015, Mathieu Plante (2015, 1), president of the Société des auteurs de radio, television et cinéma (Sartec), complained about the lack of Canadian content in the Netflix lineup and its tendency to “[Translation] trample our laws without remorse and try to crush our culture with their big boots.” He put forward the idea that “[Translation] the Web’s sacrosanct autonomy is a real threat to our industry.”
This position of creators and producers in the cultural field is shared by certain institutional players such as Ontario and Quebec representatives. The Quebec Department of Culture and Communications, in Recommendation 27 of its report, “[Translation] asked the CRTC to study the feasibility of imposing a financial contribution to Canadian programming on Canadian and non-Canadian OTT programming paid services” (Quebec Department of Culture and Communications, 2014, 35). For Quebec, it is a matter of preserving its cultural sovereignty.
On the other hand, Netflix and Google spoke about the absence of constraints as conditions for innovation, growth and respect for consumer choice. They are therefore opposed to any suggestion that their activities be regulated. In this regard, Corie Wright, a Netflix spokesperson at the CRTC hearings, suggested that the CRTC allow usersto “vote with their dollars and their eyes to form the media market” (Pedwell, 2014).
The Netflix representative referred to a plea for market regulation which “[Translation] postulates a situation of dispersed competition that brings together independent players with different interests seeking to optimize individual benefits. Arbitration between individual preferences is made possible through pricing” (Raboy and Vedel, 2005, 319). This paradigm is opposite to that of the Broadcasting Act, which is based on hierarchical regulations “[Translation] that are supposed to be on behalf of the common good of society and transcend particular interests where market regulations require them” (Raboy and Vedel, 2005, 321).
One of the highlights of the CRTC public hearings is the position taken by the federal government, which aligned itself with the arguments of YouTube and Netflix. On September 19, 2015, indicating that it would not interfere with an independent organization, the Harper government stated that it would reject any attempt aimed at imposing a “Netflix or YouTube tax.”Footnote 4On August 5, 2015, in the middle of the federal election campaign, Conservative leader Stephen Harper also posted on his Facebook page, “I am 100% against a Netflix tax. (. . .) Only our party can be trusted to focus on the needs of Canadians and to keep their taxes low. Only our party can be trusted not to bring forward a new Netflix tax.”
Here we see the use of a discourse intended to prevent the adoption of any regulations by using negatively connoted semantics—we are not talking about an extension of the Broadcasting Act, but rather of a tax—which mainly allows the Conservative government to position itself as a protector of the “citizen/consumer.” Any regulation would be counterproductive and the market should be left as free as possible in the consumer’s interest. Let us clarify that Justin Trudeau’s Liberal government, which replaced Harper’s Conservative government in November 2015, has also excluded any plan to regulate OTT stakeholders.
As of November 2014, the platform regulation issue was brushed off by the CRTC chair for whom “[Translation] Regulating Netflix is the least of our concerns.” Mr. Blais clarified as follows: [Translation]
We have come to the conclusion that holding a licence is not mandatory. We do have to go there to reach our objectives. With Shomi, Bell’s Latte project and Club Illico with unlimited access, it seems to me that there is a lot of vigour compared with the audiovisual offer on online platforms. (. . .) The objective is achieved without the regulator’s intervention. (Brousseau-Pouliot, 2014)
The market seems to provide the best solutions to the challenges faced by the broadcasting industry because it will naturally meet the CRTC’s objectives. Finally, as part of the Let’s Talk TV process, the main focus of the CRTC decisions was to implement a more flexible and favourable system for broadcasting undertakings and for the television viewer.
Thus, decisions such as reducing quotas,Footnote 5 authorizing video-on-demand services to provide exclusive content for users or broadening the definition of “Canadian programming” are intended to make the broadcasting regulatory framework more flexible so historic stakeholders can be more competitive and rival foreign OTT services. Finally, measures such as the creation of more affordable and flexible subscriptions, the prohibition of 30-day cancellation policies and the limitation of simultaneous substitutions that result from taking into account users’ complaints come from a more consumer-oriented viewpoint, where the television viewer is “king” according to Mr. Blais.
Let us clarify that decisions such as maintaining direct-to-home (DTH) television reception and the BDUs’ obligations to provide affordable basic service prioritizing local and regional news programs are intended to guarantee a certain public service level for the media in general.
To sum up the Let’s Talk TV hearings, we could say that our study reveals the government’s gradual disengagement since the 1980s from the broadcasting sector and more generally from the media as a whole in a context where “[Translation] regulations are not aimed so much at expressing a political will as to supporting the efforts of private businesses by adapting the rules of the game and creating an environment fostering innovation and efforts by them” (Vedel, 1999, 18).
In a context of cultural industry transformations, the CRTC now seems to consider it more relevant to opt for a policy oriented toward stimulating “production of content of sufficient quality to stand out in the current oversupply” (CRTC, 2015, 14) and the adoption of “incentives to ensure the promotion of Canadian programming so that it can be discovered by Canadians” (CRTC, 2015, 14). It is from this perspective that the regulatory body has decided to move forward on the principle of discoverability, to which we will now return.
What is the scope of “discoverability”?
At the time of writing this article, the CRTC is holding a series of consultations and talks on “discoverability” based on the assumption that “Discoverability (or the absence thereof) is symptomatic of a much larger problem. Canada’s audiovisual production industry is based on a structure put in place 40 years ago to protect Canadian culture from the arrival of American television” (CMF, 2016, 54). The objective is to give Canadian content national and international visibility within a “digital ocean.” Discoverability refers to the intrinsic ability of content to emerge within an “attention economy” operating on the star system principle and in a transnational environment where a huge quantity of cultural products are circulating. However, there is some uncertainty as to how to implement the “discoverability” principle.
In a recently published report, the Media Fund (2015) described two types of levers on which “discoverability” is based: institutional and industrial levers. The first refers to “cultural policies adopted to support and protect the activities of the audiovisual production sector, the regulations established in support of those policies, and the various programs—managed by government institutions—that fund this production” (CMF, 2015, 6). Here we find “classic” elements of cultural policy referring to the funding of culture. The second pillar is “largely based on new digital technologies. They use specific materials–data–and a certain type of tool–algorithms–in multiple ways (such as searches, personalized recommendations, and new forms of marketing)” (CMF, 2015, 6).
Consultations are under way, so we will not provide a comprehensive study here, only preliminary observations on the discoverability issue. According to Josée Plamondon (8/05/2016) “[Translation] On theWeb, the discoverability of content usually results from external contributions (advertising, promotion, social media, referencing). These efforts are usually timely and mainly focused on new developments. The directories and collections buried in databases remain invisible and therefore are little used.” These remarks highlight the importance of referencing content and metadata that are somewhat similar to a content identification card. Our preliminary observations indicate that there seems to be a consensus about their importance among the majority of creation and cultural production stakeholders. This is because detailed and accurate metadata facilitate the search and identification of a document. However, if quality metadata appear fundamental, they are not useful without an online presence and a certain visibility of works on various platforms, especially the most popular ones. In fact, to be effectively viewed, content must be present and easily available on the Internet. We have seen the CRTC decide not to regulate online platforms, thus thwarting any possibility of requiring them to comply with particular national content quotas.
Canadian content creators and producers must find ways of putting their content online efficiently. From that perspective, many historical stakeholders have reached agreements with digital platforms, such as Radio-Canada and Netflix.
The growth of this online presence may also involve the development of national platforms. Consequently, to compete with foreign OTT stakeholders, national BDUsFootnote 6 have issued their own video-on-demand services by means of unlimited access subscriptions (Claus, 2014a). One of the limitations of this type of response is that there are few initiatives such as these and they compete with one another. There is no coordinated response to a platform that includes a significant amount of audiovisual works, particularly Canadian ones, which can compete with large players such as Netflix or YouTube that are already well established in the Canadian media landscape. The shutdown in November 2016 of the video-streaming service Shomi, a joint venture of Rogers and Shaw Communications, indicates how difficult it is for Canadian services to survive in this extremely challenging environment that is not yet “stabilized.”
Another limitation of these services is that there is no guarantee that the private broadcasters that own them will choose to broadcast national content, unlike public broadcasters, such as the NFB or Radio-Canada with Tou.TV. The main mission of the National Film Board, which is to produce and enhance “original audiovisual works that reflect diverse Canadian perspectives, including cultural, regional and Aboriginal, and emanate from the diverse creators and communities that make up the country” (NFB, 2015, 18), is particularly noteworthy. In 2009, the NFB launched NFB.ca, which provides free streaming of documentaries and animated films, as well as interactive stories. Since it was launched, the site has recorded over 57 million views. The NFB’s Report on Plans and Priorities 2016-2017 states that “The NFB.ca | ONF.ca online Screening Room will continue to be the main showcase for promoting and distributing thousands of NFB works, most of which are offered to the public free of charge” (NFB, 2015, 33). These works are mostly Canadian. Moreover, the NFB has decided to maintain partnerships with various types of broadcasters such as Air Canada, Via Rail and platforms such as Netflix Canada, iTunes or YouTube.
The few studies and discussions related to “discoverability” that we have been able to consult seem to indicate that it is linked in particular to the quality of the metadata of the content and presence online, especially on the platforms attracting a large audience, including referencing. Moreover, in addition to the services used, the devices on which content is read—television, telephones, computers and tablets—are also important, and many types of media must also be taken into account.
Apart from these technical aspects, a basic element (see Basic Element) to be taken into consideration is consumer demand. In fact, for “discoverables,” whether or not they have national content, there must be demand for it from consumers. Focusing on cultural practices is especially challenging as a result of their complexity, wide variety and instability. Cultural identities from which the cultural practices of individuals are derived “[Translation] Must be thought of not as being defined once and for all, but as alwaysforming . . . in construction, as permanently redefined under the pressure of contacts with transnational cultural flows” (Matellart, 2009, 5). As such, digital development must not be considered a steamroller flattening content for cultural uniformity, but as an immensely complex phenomenon that takes shape in a moving and fundamentally hybrid cultural and socio-historic context. For example, Martin Tétu (Tétu, 2012, 1) has shown that “[Translation] the peer-to-peer network can contribute to the development of Quebec heritage and cultural diversity,” thus invalidating “[Translation] the dark scenario of an Internet that standardizes tastes and ‘Americanizes them’” (Tétu, 2012, 16). In conclusion, the Quebec researcher emphasizes the idea that [Translation]:
The peer-to-peer (P2P) network is becoming a digital terrain extending the offline activities of Quebecers, with differences (time of innovative products), but also similarities (Quebec origin). (. . .) Interest for Quebec culture offline is expressed by demand for Quebec P2P products. (Tétu, 2012, 26)
Moreover, “offline regular activities,” which have an online impact, partly result from cultural policies and education—two components that are sometimes overshadowed by more technical issues. We focus here on the first component—cultural policies—as we do not have the space or knowledge required to address the education issue.
The eternal funding problem
With regard to cultural policy tools, we first think of different cultural funding mechanisms which are all the more fundamental in a context where, as Jonathan Roberge, Georges Azzaria, Guy Bellavance and Christian Poirier (2016, 33) explain: [Translation]
Income sharing was altered, if not short-circuited, and this continues to raise issues in terms of fair compensation for creators. Whether it is music, audiovisual, multimedia or visual arts, we find that the royalties paid almost always leave the creators starving. As many people point out, being present on platforms or simply being visible is not enough to guarantee sufficient income.
Although “discoverability” is an interesting avenue, it does not resolve the funding issue, which is the direction the European Union (EU) seems to be taking. In 2007, to replace the Television without Frontiers Directive dating back to 1989, the EU decided to codify the Audiovisual Media Services Directive (AVMSD)Footnote 7 which became Directive 2010/13/EU. “This Directive aims to produce a framework for cross-border audiovisual media services in order to strengthen the internal programme production and distribution market and to guarantee conditions of fair competition.” Regarding only the Treaty on the Functioning of the European Union (the “Treaty”), “VOD” and “catch-up television” with obligations respecting the protection of children against violence and pornography, non-incitement to hatred, promotion of European cultural diversity, quotas and advertising rules, in 2014, Directive 2010/13/EU was reviewed to adapt it to audiovisual consumption methods, taking into account video-on-demand services such as Netflix and MUBI and video-sharing platforms such as YouTube or Dailymotion.
On May 25, 2016, the European Commission tabled a draft directive with the European Parliament and the Council “amending Directive 2010/13/EUon the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities.” This proposed review of the 2010 directive was mainly aimed at strengthening the promotion of European cultural diversity, ensuring the independence of audiovisual regulatory authorities and providing greater flexibility for organizations with regard to advertising. Two aspects have specifically attracted our attention because they represent an interesting topic of reflection for Canada:
More European creativity: Currently, European TV broadcasters invest around 20% of their revenues in original content and on-demand providers less than 1%. The Commission wants TV broadcasters to continue to dedicate at least half of viewing time to European works and will oblige on-demand providers to ensure at least 20% share of European content in their catalogues. The proposal also clarifies that Member States are able to ask on-demand services available in their country to contribute financially to European works. (European Commission, 2016)
A stronger role for audiovisual regulators: The Directive will now ensure that regulatory authorities are truly independent from governments and industry, and can play their role best; ensure that audiovisual media act in the interest of viewers. The role of the European Regulators Group for Audiovisual Media Services (ERGA), composed of all 28 national audiovisual regulators, will be set out in EU legislation. ERGA will assess co-regulatory codes of conduct and advise the European Commission. (European Commission, 2016)
Similarly, on November 16, 2016, the French National Assembly adopted an amendment to broaden the Tax on the Sales and Rental of Videograms Intended for Private Use by the Public dating back to 1993 to include free video platforms such as YouTube and Dailymotion. This decision aims to: [Translation]
Restore tax equity between free and paying platforms and between domestic and foreign players, especially Americans. Indeed, there is no reason why the distribution of productions should be taxed when they are available on a television-on-demand platform or a video-on-demand service, and their distribution on a free platform generates no income to fund creation. (French National Assembly, 2016, 5)
According to the amendment, “[Translation] the tax will be payable by any operator, whatever its place of business, providing a service in France which gives or allows access, for a fee or free of charge, to films or audiovisual productions or other audiovisual content” (French National Assembly, 2016, 5). The rate is 2% of the income earned in France by the operators concerned. However, the services giving access to “[Translation] audiovisual content created by private users,” such as YouTube with its amateur videos, will be entitled to a 66% discount. The tax proceeds intended to support national audiovisual and film production will be earmarked for the National Centre for Cinema and Animated Images (CNC). Although this decision must still be vetted by the French Senate, it indicates the political will to maintain the dynamism of national cultural production by forcing stakeholders who circumvent audiovisual broadcasting rules to play their part.
Within the field of communication research and in cultural economics or sociology, it is recognized that the media are of “public interest.” Consequently, any transformation of the media landscape raises fundamental social and cultural issues and introduces its share of debates. The development of digital technology, which is calling into question the organization of media industries today, is only part of this history.
We have seen that the CRTC has been involved from the outset in the building of the broadcasting system in order to facilitate the development of Canadian culture and strengthen national identity. Confronted with the massive flow of American content, Canada has opted for a media protection and cultural intervention strategy to build a cultural identity free from the influence of the former colonial empire or the empire to the south. The protection of cultural sovereignty would thus be achieved through the supervision of the broadcasting system as an essential element of national culture and diversity. From this viewpoint, Canada has put in place a series of tools to promote the dynamism and visibility of Canadian cultural production.
However, the arrival of certain foreign players from the digital world, in particular OTT services, has led to a re-examination of the broadcasting regulatory framework. Similar to radio in the 1920s or films in the 1930s, during which the American film industry was dominated by Famous Players Canadian Corporation, which practically transformed Canada’s film industry into a “Hollywood branch,” we are in the presence of broadcasters of foreign content, often American, which disregard the visibility and financing of our national culture. By invoking consumer freedom and the need to create an environment conducive to innovation and growth, both the CRTC and the federal government have refused to legislate on these issues. For the CRTC, which has allowed the Internet to develop outside its jurisdiction, it has become extremely difficult to intervene and the more time goes on, the more complex this intervention will become, even though the very foundations of the broadcasting regulatory framework are challenged.
The time horizon in which media evolve is much faster than that in which the law evolves, which means that we now have flexible and adaptable legal frameworks. This is not to say that we must completely abandon the media framework to “market regulation,” for which the public interest is not a priority. The longer we allow Sisyphus’s boulder to roll downhill, the more he will have to push it back up.
As Marc Raboy explained in 2003, “[Translation] a new mode of governance must be designed that is appropriate for the context of convergence and globalization that can be described (generally speaking) as the Internet era” (Raboy, 2003, 4). In the context of this reflection, where the protection of national culture and the “cultural diversity” issue play a central role, although the introduction of tools allowing a greater online presence and visibility of national cultural content appears important, the adaptation of the modes of financing is equally so.
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