EASED SATELLITE RADIO RULES COULD 'SHOCK' SYSTEM CHUM boss riled about content limits Grant Robertson and Richard Blackwell – Globe and Mail The face of Canadian radio will change now that conventional stations have lost their fight to have more stringent content rules applied to a new wave of satellite providers, industry executives say.
But the impact of this month's federal ruling that cleared satellite radio companies to begin operating in Canada won't be felt until traditional radio providers start reapplying for their broadcasting licences, the head of Toronto-based CHUM Ltd. said yesterday.
"It will become a factor," Jay Switzer, chief executive officer of CHUM, told an investor conference in Quebec City. "It will send a shock through the system next time licences are renewed… and that may change the rules that conventional radio play by."
Competition from satellite radio providers, which need have only 10-per-cent Canadian content versus 35-per-cent at conventional broadcasters, could put significant financial pressure on existing broadcasters and force them to ask for reductions to their own limits, the companies have warned.
Ottawa said two weeks ago that it would not seek to have a federal regulatory decision reviewed that granted radio licences to satellite companies Sirius Canada Inc. and Canadian Satellite Radio Inc.
CHUM and other broadcasters lobbied the government to reconsider, arguing that the lower Canadian content standards for satellite providers give the new industry an unfair advantage.
That ruling changed the "landscape" for Canadian content, said Robert Steele, chief executive officer of Dartmouth, N.S.-based Newfoundland Capital Corp., which owns 69 radio stations across Canada.
"The problem with 35 per cent is it obviously affects programming quality because it's pretty high," he said, adding a regulatory review is needed. "There are some terrific Canadian artists, no question. But, for example, at our smooth jazz [station] in Calgary, we're pretty challenged to come up with 35-per-cent [Canadian content]."
Mr. Steele said he expects the issue to come to a head during the coming review of radio policy which has been initiated by the Canadian Radio-television and Telecommunications Commission.
"It's time to look at it and maybe perhaps modify it. I'm not sure what exactly [needs to be done], but I think it needs to be brainstormed a bit."
Mr. Switzer said CHUM has several options but wouldn't say what the company will do when it is faced with its own licence renewals.
"I'll just leave it at that," Mr. Switzer said in an interview. "It's literally just happened in the past two weeks. So we're having meetings this month to explore all our options and look at different scenarios as to how to best create a business around this new reality."
Toronto-based Corus Entertainment Inc. opted not to invest directly in satellite radio, but has reached a deal to work with Canadian Satellite Radio. Corus, which also owns radio stations, said the strategy for its conventional network is to focus on local tastes, an area satellite providers won't emphasize. |