Jean-Pierre Blais to the Canadian Club of Toronto on TV news in an era of change

Speech

Toronto, Ontario
February 17, 2016

Jean-Pierre Blais, Chairman and CEO
Canadian Radio-television and Telecommunications Commission

Check against delivery

“Whatever course you decide upon, there is always someone to tell you that you’re wrong.”

American essayist and lecturer Ralph Waldo Emerson uttered these words a century and a half ago.

We at the CRTC can relate to them.

Some disapprove of the course the CRTC is setting. Our course upsets their entitlements and threatens their livelihoods. These interests express their disapproval clearly and regularly. We all see it on TV; hear it on radio; and read it in media releases, newspapers and blog posts.

The many Canadians who take part in our consultations and appear at our hearings tell another story. They approve of responsive, forward-looking regulations that strip away old entitlements and foster a dynamic marketplace that rewards intelligence, creativity and daring.

This difference of opinion is natural: The intense and continuing change the communication system is going through gives rise to anxiety about the future and, therefore, doubt and even fear about the course we’re taking—especially among those with a vested interest in keeping things the way they are.

That difference of opinion is what brings me here today: to shed light on our course and, in the process, dispel some of that anxiety—or at least in sharing details on our course, persuade more of you to join us on the journey.

Before doing so, I would like to acknowledge that we meet today on the traditional territory of the First Nations peoples. I thank them and pay respect to their Elders.

I also thank the Canadian Club for hosting our gathering and Rogers for sponsoring it—though I warn the Rogers people they likely won’t agree with everything I’ll say. By the way, a French version of my remarks is now available on our website.

Staying the course

“Whatever course you decide upon, there is always someone to tell you that you’re wrong.”

Emerson went on. He said: “There are always difficulties arising that tempt you to believe your critics are right. To map out a course of action and follow it to an end requires courage.”

At the CRTC, the course we follow is not just our own. We are reaching out to Canadians in new and ever-more accessible ways, bringing them into the middle of our conversations about the future of broadcasting and telecommunications in this country. Our invitation to them is simple: Let’s Talk TV, Let’s Talk Broadband. And they’re responding. They’re telling us they want to take back control over their communication system.

Inspired by their resolve, I want to talk about three aspects of that system and the course Canadians have urged us—and continue to urge us—to take to deal with them.

Television news in an era of change

The first is the future of television news. We are nearing the end of a consultation on the future of local and community television programming. One that is open and transparent and which follows, as all such processes do, a proven methodology of collecting, analyzing and testing evidence. Hearings are not cocktail parties where one can say anything and not expect opinions to be challenged and evidence to be scrutinized.

Canadians are telling us they value local news for its capacity to connect them directly with their communities. That local news helps them contextualize world events. And that local news makes them better prepared to participate in Canada’s democratic, economic and cultural affairs.

Yet the whirlwind of technological change is buffeting the news business about. Uber, Airbnb, Amazon and many more are but a variation on a theme—the disruptive impact communication technology is having on legacy businesses.

Dimming the lights

Eight Canadian newspapers stopped publishing in 2014. Those that remain are consolidating newsrooms and trimming copy to accommodate more photos.

There are more than 1,100 radio stations in the country, which are inherently and proudly local, and focused on the needs of their communities. The talk radio format, it must be said, is popular in most major urban centres. Yet the radio sector must contend with the growing popularity of music-streaming services and the widespread availability of Wi-Fi-enabled cars.

Local television stations are facing their own challenges. A few years ago, the employees of CHEK in Victoria acted, at a great personal financial risk, to save their local TV station.

Since then, an alarming number of television stations have reduced the length of their newscasts, cut back on staff and centralized production of news programming.

Rogers-owned OMNI did last May when its stations in Toronto, Calgary, Edmonton and Vancouver dropped their local third-language newscasts.

BCE did in November when it laid off more than 350 employees, many of whom worked in the newsrooms of its local television properties.

CHCH Hamilton did when it cut local news programming from 80 hours per week to just 17 and a half in December.

I worry that such apparently incremental cuts will affect the quality, quantity and capacity of local television news. Canada is lucky to have as many as 110 local stations and hundreds more community radio stations and newspapers.

Yet at our public hearing, Kirk Lapointe said: “We are too small of a country to permit broadcasters to further dim the lights in their news studios town by town.”

Mr. Lapointe is the former head of CTV News and founding executive editor of the National Post. He speaks from a breadth of experience few can match.

If we allow each station to be plucked away in the name of profits and losses, what are we left with when the last is removed? What will emerge to replace them?

Marketplace of ideas

Some see the supper-hour local television newscast as the hallmark of an age gone by—something that can be replaced by more immediate and engaging technology, or which can be portioned out in bite-sized chunks.

In fact, the reverse is true. Television news is as relevant to and valued by Canadians as at any point in its history.

I fear those who manage media—the corporate executives, accountants, lawyers and MBAs—have lost touch with their audiences. Analysts on Bay Street focus on quarterly results, profits, balance sheets, share prices and other calling cards of private wealth. They do not care nearly as much about the health of costly endeavours that preserve the wealth of our democracy.

What they must appreciate, and must be reminded of, is they hold an asset in trust that is not available through regular commercial channels. The value to society of a vibrant, free and responsible press is immeasurable. It is a public good. Television news belongs to the marketplace of ideas, not the marketplace of higher dividends for investors. May we never lose sight of this truth.

Journalism in the Digital Age

Those of a certain age or bent will argue that digital-based, citizen journalism is every bit as effective—maybe more so—as traditional media. That the immediacy with which Twitter, Facebook, Periscope and Meerkat deliver huge volumes of information to computers, tablets and smartphones should be valued over staid, scheduled newscasts.

I remain unconvinced. For now at least.

In fact, I wonder if their mantra stems from a desire to rationalize job cuts. Because although a certain value can be placed on the velocity of information these services provide, the picture they paint at the moment is at best half-finished. YouTube, Facebook and Twitter have been in business barely ten years. Can we as a society afford to entrust something as fundamental to our democracy as news reporting to services like these that are still in their infancies? Newspapers have honed their journalistic practices over centuries; television and radio stations over decades.

Although I have a deep respect and appreciation for history, by no means do I cling to relics of the past. I appreciate that disruptive technologies empower individuals. That a smartphone and YouTube account is all someone needs to tell stories that are in the public interest and to share them instantly with millions of people. These media may one day emerge as the news-reporting technologies of the future. Technology is having many positive impacts on how journalists gather and report the news now. This is the Guttenberg moment of our times. The Freedom of the Press Foundation provides open-source software that enables citizens to share information securely and anonymously with journalists. The Globe and Mail has adopted this technology. The CBC uses a similar one.

Some wondered why Vice was the first party to appear at our public hearing on local and community television. To them, I say there is no monopoly on good journalism. As Marsha Lederman wrote recently in the Globe and Mail, “there’s a lot to learn from alternative outlets, ranging from Vice to Pro Publica.”

I look forward to the moment when we can say with certainty that they and their peers have fully arrived as genuine, trustworthy and accountable news media outlets. I hope that many more news innovators hasten to arrive. Their help is needed.

By and large, though, the strength of digital technologies today lies in giving citizens the opportunity to connect with and be present in their communication system. It does not lie in news analysis. The investigation functions these channels present today are simply not developed enough to be considered robust and effective. My fear is that incumbent media, for whom these technologies are extremely disruptive, will be tempted to over-rely on these services in order to improve their bottom lines. And that they will lose sight of the importance of the public service they provide as a result.

A public service

If the journalist—trained to professional standards, who subscribes to a particular code of ethics, and who aspires to the highest standards for gathering and interpreting facts to create valuable, intelligent news analysis—disappears, in the absence of a proven alternative, I fear the future of the fourth estate as a pillar of democracy will be at risk.

In the absence of strong and confident journalism, who will comfort the afflicted and afflict the comfortable?

Ask yourself whether, absent the resources to delve deep into stories, journalists like Daniel Leblanc and Campbell Clark of the Globe and Mail would have ever broken open the federal sponsorship scandal. Whether CTV’s Robert Fife would have dug deep enough to expose Mike Duffy’s alleged spending improprieties. Whether CBC News in Saskatoon would have shone as brilliant a light on 30 years of abuses of Indigenous men and women by that city’s police force. Whether reporters at L’actualité would have spent eight months investigating how the Canadian military handles complaints of sexual assault and harassment.

We know the cost of producing high-quality local content is significant. No one in Canada spends more to produce journalism than printed daily newspapers and private conventional television stations. Both face a number of challenges, partly due to a softening of the advertising market. Their business models are under threat, and many of us wonder what will become of them in the next decade absent fundamental changes and the emergence of alternatives.

Vision and investment

Some are taking action. La Presse and more recently the Toronto Star have bet heavily on the success of their online models. So much so that La Presse no longer prints weekday newspapers. This was a bold decision; but look how it’s borne fruit. Since the free La Presse+ app was launched in 2013, daily readership reached 243,000. That’s well above the paper’s peak printed circulation of 221,000 in 1971. What’s more, the volume of letters to the editor quadrupled in 2015; readership jumped 22% since September; and the paper now enjoys a 63% market share among 25 to 54 year olds. La Presse is clearly doing something right, including incorporating video content that looks like television.

The good news for broadcasters is that change of this level is achievable—with a lot of desire and investment and a bit of imagination. There is more than enough money in the broadcasting system to support the creation of news and local information programming—and new approaches to monetize each. The challenge before broadcasters is not to find new sources of money to fund such change, but to redistribute the money already in the system to accommodate the new business reality. The enterprise that does will surely have a leg up on even its social media competitors, who cannot devote nearly the same amount of resources and efforts to news-gathering.

Social contract obligations

Canadians are saying they want news reporting and analysis. I am here to tell you that broadcasters hold a social contract with Canadians. In exchange for using the public airwaves to bring their productions into the homes and onto the devices of Canadians across the country, these enterprises also have a duty to serve the public interest. They must ensure that news reporting and analysis, particularly at the local level, be done to a high standard.

We at the CRTC will hold them to account for their social contract obligations in the months ahead. The licences of the major broadcasters are coming due for renewal in 2017. Canadians expect us to pay close attention to the quality and quantity of news and public affairs programming they offer. If they fail to live up to their end of their bargain with Canadians, we will not hesitate to take action.

A strong foundation

Local television news is failing us. But it need not. The system sits at a position of strength.

It is staffed by good people who are trained in some of the best journalism schools in the world.

It is desired by audiences: A recent Numeris report on audience data shows the local television evening newscast garners 20% of all households in some markets.

Just as importantly, it is well funded. In 2014, TV stations spent more than $470 million on local programming and news, while broadcasters spent a further $150-plus million on community television channels.

Those facts tell me four things.

One, that the industry is rich in resources. The people who work in and around local TV news are dedicated to their tasks. They care about their crafts and their communities. I urge news operators to take advantage of that enthusiasm and fund the ideas it presents to create new products that will captivate information-hungry audiences.

Two, local news that is rich in information and analysis and that offers high-quality production values can be a competitive differentiator in a multiplatform environment. Canadians crave this content. The broadcaster that offers it in the best way will triumph.

Three, while Canadians continue to watch television newscasts, broadcasters are having a difficult time monetizing this audience because advertisers are investing more and more in digital platforms. Tell those marketers they are misguided. Local television news delivers significant live mass audiences on platforms that do not zap or block ads.

Four, the broadcaster that finds ways to adapt its business model to suit the new information-rich, on-demand programming environment will thrive.

A subsidy for news?

We recently wrapped up a two-week hearing on local and community television. I listened as Canadians spoke with intelligence and passion to many of the issues I just described, while corporate executives who own luxury yachts and private helicopters came looking for subsidies.

When broadcasters appear before the CRTC looking for new licences or approvals of mega-transactions, they make all sorts of promises about how they will invest in programming. But the minute we initiate a policy hearing, we are told the cupboards are bare.

Capitalism and journalism make strange bedfellows. News reporting and government subsidies, however, make even stranger bedfellows. So before we rush down the garden path of creating funds to prop up the business case of local television news—if a valid public policy argument were indeed to be made—let us at least ask ourselves a question: Should civic authorities—who should be held to account through news reporting—have direct or indirect involvement on what news is or is not investigated, gathered or reported upon?

Preserving the public good that is journalism in a democratic society is a worthy goal. But is it worth upholding if the implementation of precedent-setting solutions risks the very principle of journalistic independence from interference by government?

If our society does not tolerate interference by the corporate boardroom in what is reported in television newscasts—or indeed what is not reported—why would it be any wiser to open the gate down the garden path of undue government interference?

If Canadians value local television news, should they not help finance it through arm’s length foundations if advertising revenues can no longer do so fully? By the same token, should they not look to broadcasters themselves for solutions?

Those in legal circles say hard cases make bad law. Hard cases also make bad regulations. If, in a rush to find solutions, we dismiss these fundamental principles—gained over centuries and resting as a cornerstone of our democracy—what have we really gained?

Since I can’t yet speak about the outcome of our hearing on local and community television programming, let me turn our focus to our Let’s Talk TV decisions and how they are being implemented.

Television on your terms

You will no doubt have heard that important changes are coming to the television system on March 1. That’s the date by which cable and satellite companies must begin offering a new small basic television package that prioritizes local programming. Part of the reason we mandated this change was to make television services more affordable. Part was to underscore the role of local content in the television system. And part was to re-emphasize the social duty of broadcasters to provide such an important public service.

In addition to the basic package, Canadians will be able to choose the individual channels they want—either on a pick-and-pay basis, or through smaller bundles of channels.

We mandated this change with an eye to responding to technology trends and addressing the public’s concerns. Canadians told us during Let’s Talk TV that the basic packages offered by their cable and satellite providers were too big and too expensive.

Canadians welcomed our decisions when they were announced nearly a year ago. Change is being introduced in a responsible and measured way to ensure the television industry has time to adjust. Some have responded favourably. Pick and pay, for example, has already caught on as a service delivery model among some service providers.

Others have dug in their heels. They warn of red ink and job cuts. They are trying to create wedges and change public policy well after the proverbial horse has left the barn.

Their moment to shine

Cable and satellite companies should not view this change as an opportunity to replace business practices designed to maximize profits from captive customers with newer forms of anti-consumer behaviour. Instead, I urge them to make the products they sell even better for Canadians, and put viewers—their customers—back in control of their televisions. This is their moment to shine.

We will be watching how they implement these changes over the coming months; and we will not hesitate to act if we see some companies disregarding the wishes of Canadians, our decisions and the spirit of the outcomes they were intended to achieve.

I have said many times before this change won’t be easy for everyone. It will yield growing pains. It may even force some out of business. It has certainly put us as regulators under greater scrutiny.

I welcome that scrutiny. We’re staying our course. We’re restoring Canadians’ control over their communication system. We’re using their input to help us build a framework for change. We’re making decisions in the public interest rather than catering to private ones.

Eye on future opportunity

The television system must follow our lead. Corporate executives cannot bury their heads in the sand and pretend that change isn’t happening. They must rise up and meet the challenge of a new content era head on. The old way of doing business—of squeezing every last drop of profit out of simultaneous substitution and rented, made-in-America content—is no longer sustainable. Truly great content is what draws viewers. Those that make that content will thrive.

Although they proceed somewhat uncertainly into the future, broadcasters at least begin this journey in a position of strength. Our industry is replete with funds and talent, and supported by videovores with a healthy appetite to view content. Canadians have a proven ability to create compelling, world-class audiovisual content. Their further innovations will help them succeed to an even greater degree on traditional and digital platforms.

This new, disruptive television age is created by the increasing prevalence and pervasiveness of broadband Internet technology. This brings me to my final topic today: the future of broadband regulation.

Let’s talk broadband

It’s easy to think of broadband as a delivery mechanism for TV and games and movies, but it’s much more. It’s a conduit for accessing healthcare services, a pathway to government services, a forum for teaching and learning. It’s also enhancing national productivity through innovations such as smart traffic grids, machine-to-machine communication and the Internet of Things.

The CRTC is currently in the midst of a sweeping review of Canada’s basic telecommunications services. The challenge before us is how to ensure Canadians can access fast, reliable and affordable broadband networks, wherever they are. As each of us participates more and more in the digital economy, we require more and more bandwidth. The CRTC set its minimum speed targets for broadband Internet in 2011: 5 megabits per second for downloads and 1 for uploads.

Canada has made great strides in the last five years. Ninety-six percent of Canadians have access to Internet speeds of at least 5 megabits per second. Each percentage point shy of 100, however, represents hundreds of thousands of Canadian households and businesses that don’t.

Our aspiration for the digital future

Today, other major nations are setting higher targets. The United States is aiming for minimum speeds of 25 megabits per second; Germany is targeting speeds of 50. We must now re-examine our own aspirational targets.

Our review of basic telecommunications services began last April. We have since received over 26,200 interventions, over 100 intervenors have asked to appear at our public hearing and over 23,500 Canadians have also completed our questionnaire so far.

The response shows this is an issue Canadians take to heart.

We’re reaching out via traditional channels as well as online ones. It’s just as important for us to hear from those who have no or limited Internet service as it is to hear from those that enjoy good service. That’s why we are holding focus groups with Canadians who live in small communities that either do not have access to broadband services or are underserved by available services.

The next step in our consultation is a public hearing that gets underway this April. Parties will have an opportunity to bring evidence to the table, which will be scrutinized and debated by people with contrary views. My colleagues at the Commission and I look forward to listening to arguments, challenging claims and weighing the evidence we receive.

I hope the hearing yields as much attention as our first and second phases did. I also hope it brings more municipalities, hospitals, teaching institutions and other civil society groups into the discussion. The Internet may be a source of entertainment for many, but it’s also key to our social and economic competitiveness as a nation.

Listen to Canadians

I said at the outset of these remarks many Canadians and companies approve of the course we at the CRTC are setting. They are responding positively by innovating and changing their practices and behaviours.

Others are just complaining. They’re forecasting doom and gloom: job cuts, revenue losses, station closures. They run off to court, they run off to Cabinet to seek relief. It’s their right to do so, but it doesn’t make them right.

I congratulate the members of this first group for seeing the potential ahead of us all, for listening to the public’s demands, adopting new business models, and giving Canadians control over their communication system. That’s the way to succeed.

I’m less assured by the actions of the second group. Their stock in trade these days seems to be divisive and self-interested polemics rather than forward-looking action.

For our part, we at the CRTC will remain true to the words of Ralph Waldo Emerson: We’re staying the course we’ve mapped with Canadians and we’ll follow it to the end.

We're not standing still and hoping the storm of change passes us by.

We’re reaching out to Canadians. We’re putting them at the centre of our conversations about the future of broadcasting and telecommunications in this country. We’re giving them back control over their communication system by setting a regulatory course that supports public—not private—wealth.

Stay the course

I urge all of you in this room and those beyond these walls to follow our lead.

Listen to Canadians.

Embrace the change they crave.

Look ahead. Plan for tomorrow.

Stay this course.

Thank you.

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