Stephen B. Simpson to the annual conference of the British Columbia Association of Broadcasters

Osoyoos, British Columbia
May 18, 2017

Stephen B. Simpson, Regional Commissioner for British Columbia and the Yukon
Canadian Radio-television and Telecommunications Commission

to the annual conference of the British Columbia Association of Broadcasters

Check against delivery

Thank you for that kind introduction and for inviting me to participate in the 70th annual conference of the British Columbia Association of Broadcasters (BCAB). The BCAB continues to do a great job of both promoting the interests of BC’s private broadcasters and of contributing to programs that enhance communities across the province.

In an industry such as broadcasting, which is facing tremendous change, strong and effective associations are essential. As a CRTC Commissioner, I appreciate the role that BCAB plays in representing its members. I want to assure you that the CRTC remains determined to work with groups like BCAB to address the issues facing operators.

This morning, I will provide an update on what the CRTC has been up to recently and describe what’s on the Commission’s agenda in the near future.

Connecting with audiences

To begin, though, I want to discuss the ever-accelerating pace of technological change and what it means for BC’s broadcasters. As many of you know, my career includes stints in broadcasting, advertising, media production and interactive media. This broad background influences my perspective on the industry. Like many of you, when I started out, there was no Internet and the only thing interactive about video was getting up to change the channel on the TV.

Video and audio are available in more formats and in better quality than ever before. And thanks to the Internet, and Wi-Fi and satellite technologies, you can watch and listen 24 hours a day from just about anywhere in the world. Radio broadcasters have banded together under the Radio Player Canada application which offers access to 400 stations. In most of the cars manufactured today, Internet connectivity is a standard feature. IHS Automotive forecasts that there will be 152 million actively connected cars around the world by 2020. By 2025, this number is expected to rise to nearly two billion.

Despite all of this technological change, however, the key to success in media remains the same: making a deep and personal connection with audiences. That’s been true for CKNW AM 980 in New Westminster during many decades and it’s just as true today. A strong commitment to news gathering was the reason that CTV BC won the prestigious Murrow award for overall excellence in 2011 and 2012. It’s also why BC radio stations such as CFAX and NEWS 1130 won regional RTDNA awards this year.

Change can also mean stepping out of the comfort zone of old ways in order to find new ways to move forward. CBC Vancouver, for example, was one of the first to make the move to a truly converged operation between their AM, FM and TV. With the benefits of a new ownership structure, Corus is now looking at similar ways to leverage their news and programming assets for efficiency and effectiveness. Ten years from now, I think the same formula will apply.

While getting ‘better’ at the same time as getting ‘leaner’ is not easy, we all recognize that establishing and maintaining a deep connection with audiences is every broadcaster’s single-biggest challenge. Conferences such as this one help broadcasters to meet this challenge through presentations about the latest trends, research and technologies. Yesterday, for instance, Jeff Vidler shared some of his views about podcasts and connecting with millennials. Later this morning, the Numeris Panel will take a closer look at shifts in audiences. These and other presentations, along with the many opportunities to network with peers and colleagues, are what make this BCAB gathering one of the premier broadcasting conferences in the country.

There can be no doubt we’re living in a time when consumers prefer locally sourced goods and services. The popularity of the 100-mile diet, craft beers and locally made products are all part of this trend. Successful broadcasters take advantage of this trend by emphasizing and honouring their community roots. I think this is another facet of connecting with audiences – people tend to trust the broadcasters who live in the same community as they do. And this trust between audiences and broadcasters sometimes helps beat the odds when failure seems imminent.

Today, more and more broadcasters like CHEK-TV in Victoria are exploiting the latest digital technologies to establish and deepen connections with local audiences. CHEK-TV now delivers news to air AND to social-media platforms quickly and reliably. Remember, this is a station that rose from the ashes of bankruptcy less than a decade ago thanks to broad-based community support.

In the Prairie provinces, Golden West builds trust with local audiences thanks to a different digital strategy. The company has established Internet sites devoted to the communities in which they operate stations. They encourage residents to use the website like a community bulletin board or a town hall. They have even experimented by building their own application that allows communities to further connect with themselves. These are examples of effective ways to connect with audiences and become part of the community.

A new kind of local

I’m convinced that there is a future in a new kind of local. It’s a matter of finding a creative, technologically savvy way to build and strengthen connections between broadcasters and local audiences. Consider the rapid rise of podcasts – a new spin on an old format. Decades ago, radio serials were huge across North America. Up until recently, they had all but disappeared. But when new technologies made it possible for people to download and store audio on mobile devices, the format was reborn and quickly became a runaway hit for some.

I think there are important lessons that broadcasters can take from the growing popularity of podcasts. The most obvious lesson is that good content still attracts faithful audiences. Another lesson is that there is an audience for niche content – longer pieces or pieces that adopt a specific tone or opinion. The key is to honour and build your core brand and the audience connection that is central to that brand.

Unfortunately, there is no off-the-shelf solution. As they say in high-tech: “there’s no app for that” yet, or maybe Golden West is into that already. The point is that while delivery methods change, the need to connect remains constant.

This is why local news and information is crucial to local broadcasting. A strong news department is a “must have” rather than “nice to have.” Canadians love their local news. This message was one of the top takeaways from our Let’s Talk TVconsultations. Canadians told us they particularly value local news for its capacity to connect them with their communities. Local news helps people make sense of what’s going on around the corner and around the world. In this era of so-called fake news, the buck stops at local broadcasters.

As you know, the new model introduced by the CRTC will help television stations to capitalize on this demand. As of September, a larger percentage of the contributions made by cable companies will go toward the production of local news. Independent stations – including those in Victoria, Prince George and Kamloops – will also have access to a new fund to produce high-quality local news programming.

Both Rogers and Shaw are making use of the flexibility provided by the new policy. They have announced plans to reallocate funds from their community stations to local TV stations to support the production of local news.

Of course, this new focus on local means that a new kind of competition may emerge for local advertising between radio and TV stations. But in an app-driven world, there are numerous opportunities to monetize content. I think you should all work together to ensure that great local content continues to attract its rightful place of the advertising pie. In fact, you should all be working together to grow your share.

Differential pricing decision

The CRTC is fostering an environment where consumers can choose the content they want, where innovation can reign, and where ideas can be exchanged freely. Let me give you an example: Last month, we strengthened our commitment to net neutrality by declaring that Internet service providers should treat data traffic equally.

You may have heard about a music service Videotron launched a few years ago called Unlimited Music. Under the service, some of the company’s mobile plans include access to certain music streaming services without the data counting against the customer’s cap. Canadian radio stations who stream their content online were not included among these services. Videotron argued that these services were excluded due to technical and administrative reasons.

The CRTC was not convinced by these arguments and ruled that the practice violates the principle of net neutrality. Service providers should neither restrict nor favour specific content. They should compete on price, quality of service, speed and data limit. But they should not compete by treating certain content differently. The ruling gave Videotron 90 days to ensure its Unlimited Music service complies.

It’s interesting to note that while a number of radio groups submitted interventions, none of the associations that represent commercial broadcasters specifically participated in our proceeding. I understand the topic of telecom pricing practices may seem dry or remote to those who work in broadcasting. Yet connectivity is what will bring the services and programs you create to listeners in the future. It is critical that your associations are as engaged in telecom matters as they are in the reviews of radio policies or other broadcasting matters.

Trusted curators of local content

Videotron likely introduced Unlimited Music because it recognized that music streaming and podcasts are gaining in popularity. According to Netwire, digital music revenues accounted for 63% of recorded music revenues in 2016. And the true-crime Serial podcast has been downloaded over 100 million times worldwide. Its success has inspired numerous others, including the CBC’s Someone Knows Something.

I’m confident that radio will fend off current challengers the same way it fended off previous ones:  by creating powerful bonds with listeners regardless of the platform. Decades ago, people predicted the demise of radio due to technologies such as 8-track tapes, cassettes and MP3s. Radio, though, built on its inherent advantage: the ability to foster intimate, meaningful connections with local audiences.

Radio stations remain trusted curators of local content. Listeners tune in not only for music, but also for news, weather, traffic, sports and community information. The natural disasters such as the Fort McMurray fires and the recent floods in Quebec and Ontario and now here in southern BC are recent examples. During those hard times, broadcasting’s ability to react and take a leadership role proves to be an important life-line to local communities in times of need.

Let’s keep in mind what radio stations in the U.S. learned in the 1990s after adopting syndicated programming. Listeners didn’t identify with a radio station whose personalities and music came from large, remote markets like L.A. and New York. Station after station closed.

The continued success of Canadian musicians provides radio with another competitive advantage. The 10 nominees for Top Artist in this year’s Billboard Awards include no fewer than four Canadians. Broadcasters in this country can leverage talented Canadian artists to create distinctive brands. Listeners are hungry for new, homegrown music. This demand will shape the offerings of Canadian broadcasters.

In many ways, television broadcasters face a similar challenge: retaining market share in the face of attractive online offerings. Viewers can access a dizzying array of video content online using almost any device. Creating compelling and diverse Canadian programming is the key to ensure both homegrown and international audiences stay connected to what is produced here.

Three-year plan

Before closing, I wanted to highlight three items from our recently updated plan for 2017 to 2020.

First, and most immediately, we will soon issue a decision regarding the applications we received to serve Indigenous communities in Ottawa, Toronto, Calgary, Edmonton and Vancouver. Our decision will address the need these communities have for stations that reflect them and that tackle the issues that concern them.

Second, in 2017-18, the CRTC will publish its research findings on ethnic broadcasting and decide whether its Cultural Diversity Policy needs to be updated.

And third, in 2018-19, the CRTC will launch a review of its Native Radio Policy to ensure that it reflects the realities of radio stations serving Indigenous peoples.

Conclusion

These reviews support the CRTC’s role of creating the conditions that enable broadcasters like you to innovate your product and implement successful business models.

We must all adapt to change – in fact, success demands that you stay ahead of change. You must evolve your business models, and leverage and incorporate new technologies. I know I am not the only person in this room who believes that radio and television has a bright future in BC, although there’s only one aspect of that future that we can predict accurately: successful broadcasters will be those that connect best with Canadian audiences.

Thank you.

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