DAILY NEWS Mar 16, 2006 7:39 AM - 0 comments

CAB Tables Radio Proposals

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Citing the impact of new technology, and warning of a major loss in radio listenership, the Canadian Association of Broadcasters (CAB) is proposing several measures it says are aimed at strengthening Canada's private radio.

"The old economy of radio has been abruptly replaced by a new economy where radio faces unregulated competition in an open field of media and entertainment services," said Glenn O'Farrell, CAB President and CEO. "We no longer have a single, regulated system of radio services delivered over the public airwaves, free of charge to Canadians. Now, we have two systems: the regulated system of the past, which is now in direct competition – some would say collision – with an unregulated, parallel system of new delivery platforms for audio content."

The CAB's submission was filed in response to the CRTC's Broadcasting Notice of Public Hearing 2006-1, the Review of Commercial Radio Policy. The CRTC review comes at a historic time in Canada's radio industry, the association says.

In the past, commercial radio competed with other radio stations, newspapers and television for Canadians' attention. But now, radio also competes with Internet radio, digital radio, satellite radio, cell phone radio, iPods, podcasting and peer-to-peer file sharing. These technologies have transformed Canadians from passive radio listeners to active creators of their own audio content.

Representing some 400 radio stations across the country, the CAB has put forward several bold new approaches aimed at ensuring the long-term viability of private radio. These measures include:

The development of a Bonus System aimed at encouraging airplay of emerging music artists.
To provide diversity and preserve the integrity of formats for stations programming "oldies", reduce Cancon levels to 25% from 35% for musical selections released prior to 1985.

Consolidation of Canadian Talent Development funding into commercial funds in the English and French-language markets, which will fully leverage and extend radio's role as a promoter of Canadian music talent.

Stricter guidelines on market entry by all forms of licensed radio and the development of a Market Entry Test to help prevent over-licensing.

The creation of a reporting template that radio stations can use to annually assess their progress in advancing cultural diversity.

A flexible approach to Digital Radio Broadcasting (DRB) regulation in order to encourage its development in the marketplace.

"Any course of action pursued in this historic review of the Commercial Radio Policy must recognize that the old assumptions of regulation have fallen by the wayside and that a new sector of unregulated competition is upon us," said Mr. O'Farrell. "This does not mean that more regulation is required, but rather more effective regulation needs to be designed."

The CAB's submission also notes that while some private broadcasters are profitable, Canada's radio industry is clearly cyclical and subject to business downturns. The fragmented media landscape and increases in copyright payments – which more than tripled to $70 million between 1995 and 2005 – have created an uncertain economic outlook for private radio.

The CAB also projects a loss of radio listeners over the next decade due to new audio services and technologies. The CAB estimates revenue losses in the radio industry could be upwards to $39 million by 2010, with larger losses projected in subsequent years.

But despite these economic realities, private radio's financial contribution to the development of Canadian music artists has never been greater. Since the coming into effect of the CRTC policy in 1999, private radio has committed over $168 million to new Canadian Talent Development (CTD) initiatives with over $100 million going to funding agencies - FACTOR, MusicAction, Radio StarMaker Fund, Fonds Radiostar.

Given the changing realities of private radio and the Canadian music industry, and also the inordinate amount of CTD funding from private radio that has flowed into the system in the past eight years, the Canadian regulator has the unique opportunity to set a bold new course by assessing the effectiveness of this funding and how it can be better leveraged to ensure the future health and success of Canadian radio and its music stars. For these reasons the CAB proposes to consolidate radio's CTD contribution into commercial fund in the English and French markets aimed at marketing and promotion.

In 2006 the Canadian Association of Broadcasters (CAB) celebrates 80 years as the national voice of Canada's private broadcasters, representing the vast majority of Canadian programming services, including private radio and television stations, networks, specialty, pay and pay-per-view services.

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