ARCHIVED -  Public Notice CRTC 1997-5

Public Notice

Ottawa, 10 January 1997

Public Notice CRTC 1997-5

CALL FOR COMMENTS ON THE PROPOSED ELIMINATION OF THE POLICY RESTRICTING THE USE OF HITS ON ENGLISH-LANGUAGE FM RADIO

I.  Introduction

One of the policies long employed by the Commission to encourage musical diversity has been to limit the use of hit musical selections on FM radio to less than 50% of all musical selections broadcast each week.

This policy has also served to provide a measure of protection for hit-oriented AM stations.

For purposes of this policy, a "hit" has been defined as any musical selection that has reached any one of the Top 40 positions on one or more of a number of specified charts, including:

The Record Retail Singles
The Record Country
RPM 100 Country Tracks
Billboard Hot 100 Singles
Billboard Hot Country

In Public Notice CRTC 1995-60, the Commission announced that, given its continued concern for musical diversity and for the protection of AM, it would retain its policy. The Commission stated, however, that it would be prepared to review this matter after three years (i.e in 1998).

On 1 April 1996, the Canadian music industry publication, "The Record", discontinued its "Retail Singles" chart, replacing it with a new weekly chart called "The Hit Parade".

After considering letters from the Canadian Association of Broadcasters (CAB) and individual broadcasters, the Commission announced, in Circular 422 dated 6 September 1996, that it had decided to replace the "Retail Singles" chart with "The Record's" "Hit Parade" chart to determine hits. The Commission noted that, since the "Hit Parade" chart is based on airplay rather than sales, selections would likely appear on this chart more quickly than on the "Retail Singles" chart. The Commission therefore indicated that, in any future analysis of a station's programming, the information used to determine the hit status of a selection would be drawn from charts published no less than four weeks before the date of broadcast of the selection, instead of the previous two-week delay.

The Commission subsequently received additional correspondence from the CAB expressing concern that the changes proposed in Circular 422 would require FM stations to change their programming significantly. The CAB considered that, if the Commission were to adopt the "Hit Parade" chart, it should implement a ten-week rather than a four-week delay before applying the charts to a particular analysis. The CAB also expressed concern that the proposed implementation date fell within the fall ratings period.

As a result of the CAB's concerns, the Commission issued Circular 422-1 dated 25 September 1996, announcing that, in order to properly assess the CAB's proposal and to ensure that stations were not obliged to change their programming during ratings, the Commission had postponed the implementation of changes noted in Circular 422 until 2 February 1997.

II. Considerations

The Commission's hit policy, first introduced in 1975, was designed to ensure that FM radio did not duplicate the music programming provided by AM stations. When the policy was introduced, FM radio was still in its developmental stage and AM radio received significantly higher levels of listening and revenues. Since that time, however, the radio industry environment has changed substantially and FM listening has increased dramatically.

The Commission notes that the ten-week delay proposed by the CAB effectively redefines the term "hit" for the purpose of the policy, in that it would allow FM stations to substantially increase the level of hits (as currently defined) that they can broadcast. As such, the proposal could lead to a requirement, both for English-language FM stations and the Commission, that would protect only a relatively small number of AM stations that program past hits exclusively. This proposal by the CAB, as well as the increased use of spoken word programming by many AM stations, has led the Commission to question whether the limitation of the use of hit material is still necessary as a protective measure for AM stations.

The Commission also notes that as a result of, and as intended by, the hits policy, the Contemporary Hit Radio (CHR) or Top 40 format is not widely available on FM in Canada. It further notes that only a handful of Canadian AM stations operate in this format. The Commission considers that the addition of CHR and other Top 40-oriented formats on FM, could thus serve to fill a programming niche.

In light of these factors, the Commission considers that a review of the policy limiting the use of hits on FM radio should be held now, rather than in 1998 as originally envisaged.

III. Call For Comments

The Commission calls for public comments on a proposal that it discontinue its policy that the level of hits broadcast by English-language FM stations be less than 50% of all musical selections broadcast each week. If this proposal were adopted, there would no longer be any limit on the level of hit material that commercial FM stations could broadcast.

Comments should be submitted on or before Monday, 10 February 1997 and addressed to the Secretary General, CRTC, Ottawa, Ontario K1A 0N2. While receipt of comments by interested parties will not be acknowledged, they will be considered by the Commission and will form part of the public proceeding.

IV. Suspension of Circulars 422 and 422-1

The Commission will suspend adoption of the changes proposed in Circulars 422 and 422-1 until the completion of this policy review. Consequently, the charts that will be used to determine hits, until this review is completed, will be:

The Record Country
RPM 100 Country Tracks
Billboard Hot 100 Singles
Billboard Hot Country

The current two-week delay in the application of the charts will continue to apply.

Allan J. Darling
Secretary General