Victoria, British Columbia
June 5, 2014
Stephen Simpson, Regional Commissioner for British Columbia and the Yukon
Canadian Radio-television and Telecommunications Commission
Check against delivery
Thank you very much.
First, I would like to give you an idea of how important campus and community radio is for Canadian, citizens, creators and consumers. I would also like to update you on the radio market across the country, and give you insight on the Canadian Radio-television and Telecommunications Commission’s (CRTC) policies that support campus and community radio.
I will also discuss some of the hurdles that stations such as yours must overcome, and how we at the Commission can work together with you to meet those challenges.
Let me begin by explaining the CRTC’s position on campus and community radio.
The Commission recognizes that you have a special place in your communities. More than any other media, you reflect the needs and values of the people and regions you serve.
You stand out by your involvement of volunteers in all areas of your operations. According to the National Campus and Community Radio Association’s website, campus and community stations employ nearly 6,000 volunteers working an estimated 21,000 hours per week. These volunteers include students, newsmakers, trendsetters and future leaders of society.
They are a diverse group that reflects Canada today.
A large portion of the advertising on your stations is from local independent businesses and non-profit organizations. So while commercial stations aim to turn profits, you aim to give your communities a voice, a chance to be heard and understood.
Clearly, from a financial standpoint, you have a different mandate than commercial stations do. But you still take part in the advertising market, and you have to compete with commercial stations for advertisers. So let me talk to you about the financial aspects of the radio landscape.
A few days ago, we published the 2013 financial results for the radio sector.
Overall revenues for all AM and FM stations across Canada held steady at $1.6 billion in 2013. Stations reported a 5% increase in revenues from national ads, which more than made up for a marginal decline in local ads.
Since many campus and community stations broadcast to ethnic groups, you might want to know how ethnic stations are doing financially. They are doing well. Over the last five years, ethnic radio across Canada saw an increase in local ad sales of 4.7%. That increase far outpaces the annual growth rate in local ad sales for all stations over the last five years, which was 0.7%.
Evidently, ethnic stations thrive on the local ad market. But growth across the entire radio market has slowed over the last few years. The CRTC’s Communications Monitoring Report, released last fall, shows that, in diary markets, the average weekly hours tuned per capita for all Canadians is basically unchanged: 17.7 hours in 2011 versus 17.5 hours in 2012.
But consider the situation a few years ago. From 2007 to 2011, listenership declined by nearly one full hour per week—from 18.3 to 17.5 hours.
At best, growth has stagnated. At worst, the radio market is declining.
Nonetheless, radio is an important contributor to the Canadian economy and to our culture as a showcase for Canadian artists. At the Commission, we see the challenges that campus and community radio stations face. And we want you to know we recognize that our policies must foster an environment where you can be creative and experiment, so you can thrive today and in the future.
That brings me to our current campus and community radio policy.
In 2010, the CRTC introduced a new policy that provides your stations with stable funding. The policy also emphasizes the importance of local reflection, as well as the participation of volunteers in all areas of a campus or community station’s operations.
We increased annual funding for the Community Radio Fund of Canada, or CRFC, by $1.5 million. This money now flows to community and campus radio stations. Created in 2007, the CRFC is a not-for-profit organization that supports the development of non-commercial, community-based broadcasters.
Our policy also replaced hourly advertising limits with weekly limits, to provide campus and community stations with greater business-model flexibility.
What’s more, we took steps to simplify the CRTC’s licensing regime and to harmonize as much as possible the regulations for community and campus stations.
This additional financial support and streamlined regulatory structure has bolstered Canada’s campus and community stations as they work to serve their listeners, their contributors, their communities. Yet we cannot ignore certain fundamental issues in the radio industry that may be more important in the long run than policy adjustments.
Canadians still rely on radio for much of their music. According to Nielsen, 61% of Canadians tune to traditional terrestrial radio to hear music that is new to them. And they find 42% of their new music on radio. That's the highest share among all sources, including YouTube, iTunes and social media.
Canadians also rely on radio for news and information, especially at the local and community level where people live their daily lives.
Radio is a great product! And it's free to the consumer.
But there are new products out there. All of them attractive…and many of them free (or nearly free).
Rdio, Slacker, Songza and Google’s Play Music. It is only a matter of time before Apple also enters the Canadian market now that the Copyright Board of Canada has released its decision on streaming rates.
These services deliver content to digital mobile devices that already vastly outnumber portable radios outside the home. The most enthusiastic adopters of digital media are the young. And it's precisely among younger Canadians that radio listening is in decline.
If you look at Canada's five major metropolitan markets, people between 18 and 24 are tuning in about 30% less than the general population 12 years old and up. The 12 to 17 group tune in about 50% less. The habits that people build up in their youth are likely to persist as they grow older. And new technologies will become even more pervasive.
And this is happening just as the battleground is shifting to the radio’s sacred ground: the automobile.
The connected car is coming. This new generation of vehicles will feature Web-based entertainment systems. The dashboard will provide easy access to all sorts of content. For example, Pandora planned to make its Web service available to a third of new vehicles sold in the U.S. by the end of 2013.
We are currently conducting a targeted review of our policy for commercial radio. The objective is to streamline some of our approaches so that we can regulate the sector in a more efficient manner. Among other things, we invited comments on a topic that may be of interest to you: the possible implementation of HD Radio technology in Canada and, more broadly, on radio’s digital future.
AM and FM radio is now being challenged by Wi-Fi, satellite and cellular. But these are new channels of distribution. It is your programming and relevance in your markets that has created the strong patterns of listener loyalty with the communities you serve.
As community-minded programmers, you have the ability lever your libraries of Canadian music and volunteers to connect and interact more strongly with Canadian listeners than a music service can ever accomplish.
To be sure, radio broadcasters such as you face many challenges in adapting to the new digital world. You will have to move aggressively to claim your share of that new marketplace. We at the CRTC will do all we can to maintain a supportive environment for a forward-looking campus and community radio sector.
So that’s a brief overview of what the CRTC is up to in these times of change for radio. It always helps us to hear about your concerns and your ideas. I invite you to keep in touch with the CRTC so that we’ll always know what's on your mind.
Thank you very much.
