ARCHIVED - Decision CRTC 2001-729

Decision CRTC 2001-729

Ottawa, 29 November 2001

MusiquePlus inc.
Across Canada 2001-0299-7

19 June 2001 Public Hearing
National Capital Region

Licence renewal for MusiquePlus

The Commission renews the licence for the specialty television service "MusiquePlus" for a full term. As discussed at the public hearing, the Commission has made certain amendments to the conditions of licence for the specific purpose of defining and clarifying the conditions relating to the nature of service. In addition, the Commission has required MusiquePlus to increase the minimum annual amount that it allocates to VideoFACT for the development and production of Canadian music video clips.

1.

The Commission renews the broadcasting licence issued to MusiquePlus inc. (MusiquePlus) for the national French-language specialty television service known as "MusiquePlus" from 1 December 2001 to 31 August 2008, subject to the conditions specified in the appendix to this decision and in the licence to be issued. The Commission notes that MusiquePlus has complied with all conditions of its licence during the current licence term.

Nature of service

2.

The large number of specialty television services licensed by the Commission over the years has meant that the description of the nature of the service provided by each of these undertakings has assumed increasing importance. More precise descriptions could enable the Commission to ensure that the various services are complying with the provisions of its policies, particularly those that require services to complement rather than to compete with each other.

3.

At the public hearing, the Commission discussed with the licensee the possibility of better defining the nature of the MusiquePlus service, by specifying the program categories from which its programming may be drawn and by adding certain guidelines similar to those imposed on its English-language counterpart, MuchMusic, at the time of its most recent licence renewal (Decision CRTC 2000-138).

4.

While the licensee acknowledged that these two music services are similar in approach and concept, it emphasized that they nevertheless serve two different markets having distinctly different linguistic and cultural realities. MusiquePlus cited as a positive factor that it is licensed to broadcast programs drawn from a large number of categories. The licensee stated that MusiquePlus has become the preferred cultural channel for youth and young adults, who tune to its service not only for its musical content, but also for news of events occurring within Quebec's cultural landscape and for information about performances and various other matters that concern young people. In addition, since MusiquePlus supports a number of social causes that are not directly related to music, but are nonetheless of interest to youth, such as the homeless and young offenders, the licensee proposed that the description of its nature of service specify that 90% of the programming must have a connection to music-related programs.

5.

With regard to the guidelines to be used in defining the nature of service, the licensee stated that it would accept a condition of licence requiring that a minimum of 50% of MusiquePlus programming be devoted to the exhibition of music video clips (category 8b); this percentage is less than the 65% imposed on MuchMusic. To justify this lower percentage, the licensee cited cultural differences, in particular the fact that artists and actors are invited to appear far more often on MusiquePlus due to the importance of the "star system" in Quebec. Further, the licensee agreed to various conditions similar to those applied to MuchMusic concerning, for example, the devotion of a maximum of 15% of the broadcast week to ongoing comedy series (sitcoms), specials, mini-series and made-for-TV feature films, and animated television programs and films (categories 7b, 7c and 7e); the broadcast of no more than six hours per week of theatrical feature films (category 7d); and the devotion of a maximum of 5% of the broadcast week to analysis and interpretation (category 2a).

6.

Based on the list of programs provided by the licensee in its licence renewal application, the Commission has amended the conditions of licence relating to the nature of service by specifying the program categories from which these programs are to be drawn. It has also added conditions of licence that accord with the guidelines proposed or accepted by the licensee at the public hearing. These conditions are appended to this decision.

Broadcast of Canadian music video clips and French-language music video clips

7.

In its licence renewal application, the licensee proposed to adhere throughout the new licence term to the percentages currently specified for the broadcast of Canadian music video clips and French-language music video clips, namely 30% and 35%, respectively.

8.

In its intervention, the Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ) requested that MusiquePlus be required to increase these percentages by 1% per year for five years, beginning in the second year of the new licence term, so that exhibition levels of 35% Canadian music video clips and 40% French-language music video clips are attained by the sixth year. ADISQ maintained that an increase in the requirements would have the effect of generating greater production. It cited the example of the radio industry, and the Commission's requirement for the broadcast of 65% French-language vocal music by French-language radio stations. It added that the proposed percentage of 35% Canadian music video clips complies with the 35% Canadian content currently required of commercial radio stations.

9.

In its reply, the licensee pointed out that, in 1993, Canadian music video clips and French-language music video clips accounted for 15% and 8% respectively of new recordings, whereas in 2000, these figures were 17% and 11% respectively, an increase of only 2% and 3% over a seven-year period. The licensee was thus concerned that an increase in the required levels of music video clips, both Canadian and French-language, would result in an overexposure of these clips. ADISQ stated at the public hearing that it had not done a comprehensive analysis of the availability of Canadian and French-language music video clips, but that the data provided by the licensee appeared to be correct.

10.

Regarding the comparison between its service and the radio industry, the licensee stated that, while any new album provides several new musical selections for broadcast on radio, a new album will generally result in the production of only one music video clip. It also noted that, at the time of MuchMusic's most recent licence renewal, the Commission maintained the exhibition percentage for Canadian music video clips at 30%. Considering that the French-language market is more limited than the English-language market, the licensee argued that maintaining the status quo is even more appropriate, for both the percentage of Canadian music video clips and that of French-language music video clips.

11.

Having considered the arguments of both the licensee and the intervener, the Commission has decided not to impose any additional or greater requirement for the broadcast of Canadian music video clips and French-language music video clips. The Commission notes that MusiquePlus contributes in various other ways to the Canadian music industry, in particular by showcasing Canadian artists and through its contributions to the production of Canadian music video clips, as described in the next section. Maintaining the present exhibition levels will also ensure that the licensee has the flexibility it requires to operate its service successfully.

12.

The Commission nevertheless encourages the licensee to exceed the minimum percentages of 30% Canadian music video clips and 35% French-language music video clips established in the conditions of licence appended to this decision. Further, at the time of the next licence renewal for MusiquePlus, the Commission will expect the licensee to propose an increase in the percentages for Canadian and French-language video clips in its programming.

Contributions to the production of Canadian music videos

13.

MusiquePlus is currently required to allocate, at a minimum, the greater of 2.4% of its previous year's gross revenues or $100,000 per broadcast year to the development and production of music video clips. The amounts are paid to the VideoFACT organization, which is responsible for redistributing this financing among Canadian artists wishing to produce music video clips. In its licence renewal application, the licensee proposed to maintain its commitments to VideoFACT during the next licence term.

14.

In its examination of the licensee's plans in this area, the Commission has determined that the licensee did not include all of its revenues in the calculation of its contributions to VideoFACT. In the interest of consistency of treatment of the licensees of other specialty television services, the Commission considers it appropriate to clarify the meaning of the expression "gross revenues" used in the condition of licence.

15.

The licensee stated that the revenues to be used in establishing its contribution to VideoFACT should be those earned solely through its broadcasting activities. In its opinion, revenues for this purpose should not include those that are not directly related to economic activity (distribution and advertising fees) that are not subject to the regulatory regime or the licence fee regime. In this context, the licensee differentiates between the different types of revenues as follows:

Revenues to be included in the calculation, according to MusiquePlus, are:

· Distribution fees (subscriptions);

· Monetary advertising revenues, including infomercial revenues (national advertising after agency commissions);

· Non-monetary advertising revenues if they derive from non-monetary exchanges for goods and services (contra advertising) with third parties.

Revenues to be excluded, according to MusiquePlus, are:

· Non-monetary exchanges related to the broadcast of media advertising (contra advertising) with similar undertakings;

· Resale of Canadian programs to third parties;

· Production;

· Interest;

· Commissions on sales of advertising for a third party (for example, a MusiquePlus representative selling advertising for MuchMusic);

· Other revenues;

· Internet.

16.

In imposing conditions of licence on broadcasters that are based on a calculation of their gross revenues, the Commission's intent has been that broadcasters include all of their revenues in their calculations. This would include the various types of revenues currently being excluded by MusiquePlus, with the exception of those generated by its Internet activities. This means that generally all revenues that are accessory to its primary broadcasting activities are included. The Commission's intent has been to ensure consistency across the industry and to simplify the calculations required by such a condition of licence. The exclusion of Internet revenues is consistent with the Commission's new media policy (Public Notice CRTC 1999-84).

17.

The Commission therefore confirms that, for purposes of applying the appended condition of licence relating to the contributions by MusiquePlus to VideoFACT, gross revenues include all revenues related to the presence of the service on Canadian broadcast airwaves, except revenues generated by the Internet. The Commission notes that it issued an administrative renewal of the licence for MusiquePlus from 1 September to 30 November 2001, under the same terms and conditions as the licence then in effect (Decision CRTC 2001-165). The requirement that MusiquePlus contribute 2.4% of its gross revenues to VideoFACT is thus an ongoing requirement that has been in effect both before and after 1 September 2001. Accordingly, the Commission specifies that this clarified method of calculation shall apply as of the broadcast year beginning 1 September 2001.

18.

In its intervention, ADISQ requested that the Commission require an increase in the financial contribution by MusiquePlus to support the production of Canadian music video clips. ADISQ proposed that this increase be introduced gradually, growing from the current rate of 2.4% of gross revenues to 3.4% in the second year, 4.4% in the fourth year and 5% in the sixth year of the new licence term.

19.

In support of its request, ADISQ pointed out that the required contribution of 2.4% of gross revenues has remained unchanged since MusiquePlus began operations in 1988 and that the service is now well established in its market, with a solid financial foundation. ADISQ also noted that the current 2.4% level is substantially lower than that imposed on such other music-based specialty services as MuchMusic and Country Music Television (CMT). Since their most recent licence renewals, these other services have been required, by condition of licence, to devote 7% and 11% respectively of their gross revenues exclusively to the production of Canadian music video clips.

20.

In reply to the intervention, the licensee objected to any increase by the Commission in the percentage of its contribution to VideoFACT, arguing that this could affect the profitability of its service. It also stated that it was contributing in other ways to the development of Canadian talent, particularly through its payroll, which is much larger than that of other music based services and of other French-language specialty services.

21.

The Commission sets its requirements for a percentage contribution to Canadian talent following an analysis of a licensee's profitability and of its capacity to absorb any increase in this requirement. In 2000, the profit before interest and tax (PBIT) of MusiquePlus was 10.8%, whereas for CMT it was 18.8% and for MuchMusic, 24.6%. On the other hand, MusiquePlus is owned in equal proportions by two large broadcasting groups which have considerable resources - Groupe de Radiodiffusion Astral inc. (Groupe Astral) and CHUM Limited.

22.

The Commission considers that, even though the existing requirements for the broadcast of Canadian music video clips and French-language music video clips continue to be appropriate at this time, there should be an increase in funding for Canadian music video clip production. Accordingly, an appended condition of licence requires that, effective 1 September 2002, and for the remainder of the licence term, MusiquePlus shall allocate a minimum of 3.4% of the previous year's gross revenues to VideoFACT for the development and production of Canadian music video clips.

Reflection of Francophone minority communities

23.

In its Report on French-language broadcasting services in a minority environment (Public Notice CRTC 2001-25), the Commission stated that, at the time it would consider the licence renewal of MusiquePlus and other French-language specialty services having distribution across Canada, it would also examine how they might more effectively ensure that their programming reflects and represents French-language minority communities.

24.

At the public hearing, the licensee emphasized its collaboration with MuchMusic in the program entitled "French Kiss". MusiquePlus provides MuchMusic with the music video clips and reports that are included in this 30-minute program broadcast five days a week on MuchMusic. The licensee added that it broadcasts all the reports it can obtain from MuchMusic dealing with Francophones outside Quebec. The licensee also stated that, if its service were to receive wider distribution across Canada, it would broadcast such reports on a regular basis in order to better reflect the Canadian Francophone community.

25.

The Commission expects MusiquePlus to increase its efforts to more effectively reflect the realities of French-language minority communities across Canada. The Commission intends to review the situation with the licensee when it considers its next licence renewal.

26.

In PN 2001-25, the Commission noted the statement by Groupe Astral at the hearing indicating that the wholesale rates it offers to distributors outside its main language markets are generally between 10% and 15% of the rates offered per subscriber in its main markets, and that this approach would be maintained in the future. The Commission indicated in its notice that, in order to enhance the delivery and the accessibility of broadcasting services in a minority environment, it expected specialty services to apply wholesale rates that are consistent with those proposed at the public hearing of 18 October 2000. The Commission reiterates the expectation set out in PN 2001-25.

Cultural diversity

27.

The Commission expects MusiquePlus, and all other specialty and pay television licensees, to contribute to a broadcasting system that accurately reflects the presence in Canada of cultural and racial minorities and Aboriginal peoples. The Commission further expects licensees to ensure that their on-screen portrayal of all such groups is accurate, fair and free of stereotypes. These expectations are fully in keeping with section 3 (1)(d)(iii) of the Broadcasting Act, which states that the Canadian broadcasting system should, "through its programming and the employment opportunities arising out of its operations, serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of Aboriginal peoples within that society."

28.

In Public Notice CRTC 2001-88, Representation of cultural diversity on television - Creation of an industry/community task force, the Commission called upon the Canadian Association of Broadcasters (CAB) to develop an action plan for a joint industry/community task force. The role of this task force is to sponsor research, identify "best practices", and help define the issues and present practical solutions to ensure that the Canadian broadcasting system reflects all Canadians. In its notice, the Commission emphasized the importance of having the participation of all sectors of the broadcasting industry, including specialty services.

29.

At the hearing, the licensee noted that, from the time its service first commenced operation, minority groups have found representation in the programming of MusiquePlus. It added that it constantly seeks to broadcast music in all genres, thereby reflecting the tastes and preferences of a large diversity of cultures. The Commission commends the licensee on the leadership it has shown in this regard. It also notes the licensee's confirmation at the hearing of its plans to participate in the working group discussed in Public Notice CRTC 2001-88 and, if necessary, to provide this group with financial support. The Commission expects MusiquePlus to contribute to the activities of the working group.

30.

The Commission further expects the licensee to develop and implement a comprehensive corporate plan that explains how MusiquePlus intends to continue to improve its representation of Canada's cultural diversity, and to file its plan with the Commission within three months of the date of this decision. The plan should include specific commitments to corporate accountability and to the reflection of diversity in programming, and should make provision for the gathering of feedback on the effectiveness of these commitments. The plan should also set goals for achieving the full, fair and consistent reflection of diversity in Canada.

31.

With respect to corporate accountability, the plan should address how MusiquePlus will create an environment that supports the cultural diversity objectives outlined above, by:

32.

With respect to the reflection of diversity in programming, the plan should focus on how the licensee will ensure the presence and the fair, accurate and non-stereotypical portrayal of cultural minorities and Aboriginal peoples in the programming it produces or acquires. Specifically, the plan should include provisions for making certain that:

33.

As for feedback, the corporate plan should describe the specific mechanisms the licensee will put in place to ensure that it receives effective input from community groups concerning its performance in reflecting cultural diversity in programming.

On-air presence

34.

The Commission reminds the licensee that the expectations set out above with respect to cultural diversity are over and above the longstanding and more general expectations concerning employment equity in on-air presence. Specifically, the Commission expects the licensee to continue to ensure that the on-air presence of members of the four designated groups (women, Aboriginal persons, disabled persons and members of visible minorities) is reflective of Canadian society, and that members of these groups are presented fairly and accurately.

Closed captioning

35.

The Commission is committed to improving the services offered to television viewers who are deaf or hearing impaired. Over the period since the Commission announced its policy on closed captioning in Public Notice CRTC 1995-48, it has consistently encouraged broadcasters to increase the amount of captioned programming they provide. The Commission now requires the licensees of conventional television, specialty and pay television undertakings to achieve a minimum level of captioned programming appropriate to the nature of the service that each provides. Generally, the specified minimum requirement for English-language services is 90% of all programming.

36.

The closed captioning requirement imposed on this and on other French-language services is less than the 90% level required of English-language services. This is in recognition of the significantly greater challenges involved in captioning French-language programming.

37.

In the case of MusiquePlus, the licensee stated that all music video clips produced with the financial support of VideoFACT, MusiqueAction and the Harold Greenberg Fund are captioned. These represent more than half the music video clips broadcast by MusiquePlus. In the case of foreign music video clips, the licensee indicated that most of them are not captioned. The licensee is of the opinion that 90% of the Canadian music video clips broadcast by MusiquePlus will be close-captioned by the end of the new licence term. In addition, it will also attempt to ensure that 90% of pre-recorded programs produced by MusiquePlus, other than music video clips, are captioned by the end of the new licence term.

38.

Consistent with this commitment and with the Commission's general approach to French-language services, it expects the licensee to gradually increase the level of captioning it provides, and requires it, by condition of licence, to achieve a minimum captioning level of 50% for all programming, except music videos, aired during the broadcast day, beginning no later than 1 September 2006 and continuing throughout the remainder of the licence term.

39.

The Commission also advises the licensee that, at the time of its next licence term, the Commission intends to require this service to provide captioning for a minimum of 90% of all programming other than music videos. Accordingly, the Commission encourages the licensee, by the end of the licence term, to caption 90% of all programming other than music videos during the broadcast day.

40.

In addition, the Commission expects the licensee to focus on improving the quality, reliability and accuracy of closed captioning, and to work with representatives of the deaf and hard of hearing community to ensure that captioning continues to meet their needs. The Commission further expects the licensee to support and participate in any industry/community initiatives designed to improve the quality and quantity of captioning in French, particularly of real-time captioning.

Service to the visually impaired

41.

At the hearing, the licensee suggested that video description has a far more effective role to play in the broadcast of drama productions than it does in the presentation of music videos. It indicated, however, that it already has access to a certain amount of the equipment required to provide video description, and that it was prepared to take all necessary steps to keep pace with the progress of other broadcasters in this area.

42.

The Commission notes in this regard that, in decisions issued last December, it encouraged the licensees of new Category 1 specialty services, over their licence terms, to provide increasing amounts of programming accompanied by audio or video description. More recently, in decisions issued in the summer of this year renewing the licences for the television stations owned by CanWest Global, CTV and TVA, the Commission set out requirements regarding the provision of increasing amounts of such programming.

43.

"Audio description" and "video description" or "described video" are methods of improving the service that television broadcasters provide to people who are visually impaired. Audio description involves the provision of basic voice-overs of textual or graphic information displayed on the screen. A broadcaster providing audio description will, for example, not simply display sports scores on the screen, but also read them aloud so that people who are visually impaired can receive the information.

44.

Video description, or described video as it is also known, consists of narrative descriptions of a program's key visual elements that enable people who are visually impaired to able to form a mental picture of what is occurring on the screen. These descriptions can be provided on the Secondary Audio Programming (SAP) channel. Not all broadcasters are currently equipped to deliver a SAP signal. Thus, the introduction of described video via the SAP channel could require significant capital expenditures to upgrade a licensee's transmission facilities.

45.

The Commission notes the increasing amount of described programming available for acquisition, particularly from U.S. sources. It notes as well the encouragement given to the operators of the new category 1 specialty services and the requirements it has placed on the television stations operated by CTV, Global and TVA concerning the provision of such programming. In its discussions with MusiquePlus, the Commission sought the licensee's views on the implementation of audio description, video description or described audio. The Commission considers it reasonable to expect the operators of the pay and specialty services whose licences are being renewed at this time to take steps to respond to the needs of viewers who are visually impaired.

46.

Accordingly, the Commission expects the licensee to:

Interventions

47.

The Commission has considered all interventions submitted in regard to this application.

. Decision 2001-165 - Administrative renewal for MusiquePlus

Secretary General

Appendix to Decision CRTC 2001-729

Conditions of licence for MusiquePlus

1 - News
2a - Analysis and interpretation
2b - Long-form documentary
3 - Reporting and actualities
5b - Informal education/recreation and leisure
7b - Ongoing comedy series (sitcoms)
7c - Specials, mini-series, made-for-TV feature films
7d - Theatrical feature films aired on TV
7e - Animated television programs and films
7f - Programs of comedy sketches, improvisation, unscripted works, stand-up comedy
7g - Other drama
8a - Music and dance other than music video programs or clips
8b - Music video clips
8c - Music video programs
9 - Variety
10 - Game shows
11 - General entertainment and human interest
12 - Interstitials
13 - Public service announcements
14 - Infomercials, promotional and corporate videos

(a) concert films and documentaries;

(b) music artists' biographies

(c) pop/rock operas and plays; or

(d) feature films that have a minimum music:spoken word ratio of 60:40, in accordance with the following:

i) where synchronized spoken word occurs within a film, the duration of such dialogue will be counted as spoken word for the purposes of the 60:40 music to spoken word test;

ii) where synchronized spoken word occurs within a film, accompanied or enhanced by background music, the duration of such dialogue will be counted as spoken word for purposes of the 60:40 test;

iii) where music occurs in a film, and is not used as background music for synchronized spoken word, the duration of such music will be counted as music for purposes of the 60:40 test;

iv) where music occurs within a film and small amounts of non-synchronized dialogue are present within such music, the duration of such music will be counted as music for purposes of the 60:40 test.

(a) every period shall be calculated on the basis of the Eastern time zone;

(b) broadcast day means a 24-hour period beginning at 00:00:00 hour Eastern time;

(c) broadcast week means seven consecutive days beginning on Friday;

(d) broadcast month, broadcast year and clock hour shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987, except that broadcast month and broadcast year shall be calculated based on the definition of broadcast day provided above;

(e) paid national advertising means advertising that is purchased at a national rate and receives national distribution on the service;

(f) music video clips and Canadian music video clips shall have the same meaning set out in section V of Appendix I of Public Notice CRTC 2000-42, entitled Certification for Canadian programs - A revised approach, as amended from time to time;

(g) music-related shall be defined as about the music or recording industries, or about musical artists, concerts and musical performances, compositions or events.

(h) gross revenues means all revenues related to the presence of the service on Canadian broadcast airwaves, except revenues generated by the Internet.