SUBSCRIPTION RADIO - QUESTIONS AND MUSINGS Greg Diamond Given the option, the CRTC would likely have taken a pass on the whole subscription/satellite issue at this time and instead wait it out until a Canadian bird was launched. Regardless, pressure was brought to bear by powerful forces and the Commission was once again asked to play Solomon on an issue where all parties could not possibly end up satisfied. Having two satellite-based and one terrestrial-based applicant made the job hard enough, but the inability to regulate the source-point of the satellite applicants made an amicable ruling nearly impossible from the outset.
As we now know, all three applicants were approved. Canadian Satellite Radio (CSR) and Sirius Canada got their expected nod with predictable increases in Canadian exposure. CHUM/Astral was also green-lighted with the same Cancon requirements as traditional stations.
At the time of the hearing, the two satellite applicants proposed what the Commission viewed as modest levels of Canadian programming. CSR and Sirius argued the number of Canadian-only channels sought was all that could be acquired from XM and Sirius in the US, which after all, owned the satellites. The CRTC in their ruling understood those to be low-ball bargaining positions and subsequently upped the number required.
To operate in this country, CSR and Sirius Canada must fulfill the following:
To protect traditional stations, the Commission ruled that satellite channels will not be allowed to broadcast local news, weather, and traffic. The new channels will also need to abide by current regulations regarding offensive programming.
With regards to the CHUM/Astral team, as mentioned they will come under the same regulations as the rest of the terrestrial industry, but will be required to fork over only 2% of their gross to FACTOR, MusicAction, etc.
Who’s happy, who’s sad/angry?
CSR and Sirius have issued statements of support for the decision. Both companies will have to go back to their American parents and seek more room on the birds, but it’s unlikely that will be a major issue. The fact that XM in the States issued a favourable statement is a good indication for CSR and newly unveiled technology by Sirius will allow them to greatly expand their capacity when needed.
Both are now hoping to be up and running by the end of the year… uh, not so fast gang.
CHUM’s Executive Vice-President of Radio, Paul Ski, was quoted as saying he was “… shocked, stunned, and quite surprised by the decision.”
CHUM/Astral have said all along they would have trouble moving forward should all three applicants be licensed and no meaningful equity be found between their service and those of CSR and Sirius, Canada. Mr. Ski’s comments leave no doubt as to where they stand on the matter.
It’s still too early to know what CHUM/Astral will do, but there seem to be only three choices:
With the investment already made to get to this point, why wouldn’t CHUM launch a ‘Hail Mary’ pass? They really have nothing to lose. Also, to do so would put everything on hold and really cause problems for their two competitors. As an example, how could CSR and Sirius Canada continue lobbying car manufacturers to include satellite radios in their next year’s models?
Some insiders expect CHUM/Astral to appeal. They have until November to decide.
New Canadian bands and artists are the perceived big winners here. Really? Are you sure?
Indie Pool Inc. was “thrilled” and “ecstatic” about the ruling as the company believes this will be the panacea it has long sought to showcase unsigned Canadian acts.
While the quotas dictated by the CRTC will ensure these acts get played, there is no amount of legislation (short of a police state) that can dictate anyone will actually listen.
The Canadian music channels will be, by license, 50% unfamiliar. This will doubtless appeal to a very small segment of the overall population. For the vast majority, the domestic channels will be treated like the satellite TV stations that you don’t want but are included anyway in your chosen tier package… they aren’t watched. I hate to throw cold water on things but the Canadian channels will be largely ignored. It’s the American ones that will get the bulk of the tuning.
The part of the decision that gave me pause for thought was the 25% new, 25% really new quotas. There is a strong possibility that this thinking will in some form be incorporated into the next changes to the FM radio regulations. Another strong indication of this came at the recent hearings in Niagara Falls. The applicant for a modern rock station in Woodstock, Ontario was repeatedly asked about potential independent artist exposure.
Such initiatives, while noble in theory, are potentially disastrous in reality. It’s one thing to ask someone if they would like to hear more new Canadian material. Patriotism might dictate a resounding “yes”, but it’s another matter entirely to put it into practice. Radio’s success is based on the ‘silent majority’, who only “speak up” when they put check marks in ratings diaries. It’s these listeners, who want to hear music they recognize that make up the bulk of the audience. Their silent contentment allows the very ‘vocal minority’ to be perceived as a much larger population segment than they really are. No sour grapes here folks, just stating what every GM, OM, and PD in the business knows and deals with every single day. While an increase in new, unfamiliar Cancon is speculation only; my bat-senses are definitely tingling.
The local restrictions imposed by the Commission will shelter traditional radio somewhat. It will force subscription radio tuning into more passive listening times (Middays, Evenings, and Weekends). AM/PM Drive periods will be much less affected with service elements playing such an enhanced role in those dayparts.
We should expect high penetration in rural areas. Let’s face it, satellite radio will be the perfect companion on that long drive to Nunavut… when they build the road, that is.
Finally, on the bright side, you can now clearly illustrate to your announce staff the benefits of local show prep. Smart jocks will no longer be thinking about which bar they’ll be at that night when you get around to the “local-local-local” speech in your aircheck critiques. The Commission has given us the opportunity to ensure our continued success. The announcers will be the ones to make it happen. I’ll be happy to advise you and your staff on the best ways to do that.
One last question - What happens when we get a Canadian satellite up there? |