Banff, Alberta
June 12, 2014
Tom Pentefountas, Vice-Chairman of Broadcasting
Canadian Radio-television and Telecommunications Commission
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Good morning.
Before I begin, I would like to acknowledge my colleagues from the Canadian Radio-television and Telecommunications Commission (CRTC) who are here with me today: Candice Molnar, Regional Commissioner for Manitoba and Saskatchewan; Steve Simpson, Regional Commissioner for British Columbia and the Yukon; and Michael Craig, Manager of English-language TV Applications.
We’re especially pleased to be here as you celebrate your 80th anniversary.
Let’s think about that for a moment. The Western Association of Broadcasters saw the light of day during the depths of the Great Depression.
At the same time that the global economy was lying in ruins, the Prairies were experiencing misfortunes of Biblical proportions: droughts, hail storms and even plagues of grasshoppers.
These events devastated crops and caused untold misery for farmers, their families and their communities.
Through grit, determination and creativity, Canadians living in the Prairies persevered through those difficult years. In so doing, they gave rise to the great Prairie cooperative movements that have shaped many of Canada’s public policy initiatives, most notably Canadian health care.
It is a testament to your ability to overcome adversity, and to the deep-seated roots you have established within your communities that will see you through any future challenges.
On behalf of everyone at the CRTC, congratulations on eight decades of success and service—and I want to underline service to Canadians, because that is the business you're in.
Radio sector
As you know, the CRTC is currently in the middle of a targeted review of our commercial radio policy. While we have not seen a need for a major overhaul of the policy, there are some areas that could use some updating.
The review is still underway, so there’s nothing I can report to you at this time. However, I do want to thank those who participated in the review. We are carefully reviewing all the comments we received and are aiming to issue a decision in the fall.
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.
These services are delivering content to cellphones and tablets. The most enthusiastic adopters of digital media are the young.
And it’s precisely among young 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 stay with them as they grow older. And new technologies will become more pervasive.
And this is happening just as the battleground is shifting to radio’s sacred ground—the automobile with its Web-based entertainment system.
Notwithstanding these challenges and others, radio remains relevant in the development of musical tastes, public opinion and regional identity.
We all know there are new services out there: Rdio, Slacker, Songza and Google’s Play Music, to mention but a few. And with the Copyright Board of Canada's recently released decision on streaming royalties, how much longer before the likes of Apple, Pandora and Spotify enter the Canadian market?
More worrisome may be the fact that many of these stand to grow even bigger through mergers and acquisitions. Clearly, Songza seems to be in talks with Google and others will be acquired by a behemoth shortly. Apple is dishing out $3 billion for Beats, not to mention the $4 and $5 billion dollar valuations of Spotify and Pandora, respectively.
Now, it would only naturally feel like David fighting Goliath. It may have been a bit before my time, but my recollection is that David did alright for himself in that fight. And I suspect you'll do quite well for yourselves as well, precisely because of those same deep-seated roots of which I spoke earlier.
The newly-created digital players can't compete with those roots. You can surely take advantage of incumbency—incumbency combined with innovation in your role as curators of music and more importantly by being deeply woven into the social and cultural fabric of your respective communities.
So radio broadcasters face challenges in adapting to the digital world. But these challenges are not insurmountable. I think you possess the ultimate weapon in your easily identifiable brand. I’ll come back to this idea in a moment.
Television sector
Television broadcasters are also facing a similar challenge. Canadians with an Internet connection can now access a wide choice of content.
How can we make sure that the television system is meeting the needs of Canadians, now and in the future?
Unlike past CRTC consultations, we decided to start by posing this question directly to Canadians. Last October, we launched Let’s Talk TV: A Conversation with Canadians.
We are now in the third phase of this conversation. Last month, we proposed a number of changes to the TV system based on what Canadians have told us.
The proposals have three aims:
- to foster choice and flexibility in selecting programs
- to encourage the creation of compelling and diverse content made by Canadians, and
- to empower Canadians to make informed choices.
Other changes we are exploring include a skinny basic package, the introduction of a code of conduct for television service providers and the establishment of an ombudsman.
We are also looking at the usefulness of an audience-measurement system using return path data, which would be designed in such a way as to protect viewers’ privacy.
We are accepting comments until June 25. After that, there will be a public hearing starting on September 8.
Branding
The radio review and the Let’s Talk TV conversation are good examples of how the CRTC is ensuring that its regulations keep pace with the rapid changes we are seeing in technology and consumer behaviour.
As you contend with these same changes, one of the most important aspects of your strategy will inevitably have to be branding.
How do you create a dynamic whereby you are instinctively first of mind in your public's broadcasting appetite?
For my part, when I think about search engines, the first thing that comes to mind is Google.
When I think about social media, the first thing that comes to mind is Facebook.
When I think about software, Microsoft comes to fore.
When I think about mobile devices, it’s all about the mother of all brands in Steve Jobs and Apple.
We often hear that everything today is a commodity—music, visual entertainment, news, weather, traffic. You can get that from anywhere. The key is: How do you get your potential audience to want to get it from you? Where do those ties that bind you with your audience come from? How can you show them that you’re not just a content-delivery service?
And even the notion of music as a commodity may be challenged. It's potentially only a commodity if you treat it as one. As I mentioned earlier, nothing prohibits radio operators to remain curators of musical tastes and beat the digital players on their turf.
Radio stations have been particularly successful at getting Canadians to want content from them because of their strong local flavour and their unwavering commitment to the communities they serve. What can television broadcasters learn from radio?
There are a number of similarities between the two media. Whether you work at a radio station or a television station, your advantage is that your brands are trusted, established curators of content.
But the content doesn’t belong to you. What belongs to you is the brand that you’ve created in the marketplace and the connection you’ve made with your audience. It’s the attachment listeners and viewers feel toward your stations.
I often wonder what Marshall McLuhan would say about today's media environment. Would he insist that the message is the medium?
Some have observed that the message has become a globally-available commodity. And the radio broadcaster has taken cognizance of that fact. There was a time when radio stations had huge traditional news rooms. But in this new millennium, the traditional information function has taken a back seat to the commentary and debate function. All this stimulated by on-air personality spending in an attempt to create differentiation in the market place. Given the advent of the global news gathering services, this may be a natural progression.
What you have to work with ultimately is the loyalty of your listeners and viewers. Once you have them, they’re hooked. They’re yours. And they’ll follow you anywhere. Any platform. Any app. Google can't compete with that.
Your brand is your competitive advantage. It’s up to you to use it to hedge your bets against new technologies and new competitors.
The ball is in your court. Who are you? What’s your brand? How can broadcasters use their brand to build a stronger connection to your current and potential audience?
I wish you all the best in your current and future broadcasting endeavours. To the next eighty years.
Thank you.
