How CRTC policy changes could affect commercial radio in Montreal

Last month, the CRTC released its long-awaited review of its Commercial Radio Policy. The policy determines what standard regulations will apply to commercial AM and FM radio stations in Canada, covering things like Canadian content quotas, ownership limits, mandatory financial contributions and local programming minimums.

The industry pushed for some big changes in the policy, which has been a long time coming (the review of French music quotas started back in 2015 but was delayed in part because for a time the commission didn’t have enough francophone commissioners).

What they got was a lot of the same. Canadian and French-language content quotas are basically unchanged, local programming is still expected but not required, and stations still need to ask permission if they change between a mainly talk format and a mainly music format on FM. But there were a few changes that could make a big difference, in particular for stations in Montreal. Let’s get into them:

Common Ownership Policy

Under the previous policy, the CRTC limited an owner to three or four stations in a market, depending on how many commercial stations were in that market (and French and English stations within the same geography were considered separate markets). In either case, an owner was permitted to own no more than two stations on any frequency band — two AM and two FM — in a given language.

Broadcasters complained that this restriction was outdated because most markets have shifted entirely or almost entirely to FM and there are plenty of ways for people to get their audio content now.

The CRTC agreed in part, but out of an abundance of caution only relaxed the rules a bit. Now, for markets with eight stations or more, the limit remains four stations overall but up to three on a given band. For markets with less than eight stations, the limit remains three but all three can be on the same band.

The split by language remains, which means one owner in Montreal can have up to eight commercial radio stations under their wing.

Unfortunately, it seems very little thought went into the issue of scarcity of spectrum, particularly in bilingual markets like Montreal and Ottawa. Already under the previous policy, 11 commercial radio stations in Montreal are owned by either Bell or Cogeco (Cogeco got a special exemption to keep a third French FM station when it bought Corus’s Quebec stations a decade ago). And because there are no other available frequencies in this market, there isn’t room to launch a new competitor.

Under the new policy, Bell could buy either CKLX 91.9 from RNC Media or CJPX 99.5 from Leclerc Communication and make it seven stations and still have room to start or buy a French-language AM station in the city. RNC already tried selling 91.9 to Leclerc, and Bell has already previously expressed an interest in starting up an RDS Radio.

Hits policy

A real annoyance to music directors in Montreal and Ottawa is a policy that limits English-language FM stations in those markets (and only those markets) to 50% hit songs on their playlist. The policy was originally meant to protect AM stations from FM, then repurposed to protect French FM stations from English ones.

In the new policy, the CRTC has decided that it doesn’t have compelling evidence the policy achieves its goals, and in a more openly competitive audio environment, it is no longer necessary. As a result, it has been eliminated and stations can play as many Top 40 songs as they want (while meeting CanCon and other quotas).

The regulations have already been changed, so stations like The Beat 92.5 and Virgin Radio 95.9 can already put the new policy into effect.

Campus stations are also subject to limits on hit music — that doesn’t change under this policy shift, but changes to that aspect of the policy will be considered in a future proceeding.

CanCon and MAPL

How to define songs as Canadian has always been a contentious issue. Going by the artist’s citizenship/permanent residency alone might seem simple but is problematic because songs have more than just a singer contributing to them.

Currently, Canadian-ness of a song is generally determined by a points system called MAPL — Music (a Canadian composed the song), Artist (a Canadian performed the song), Performance (the song was recorded in Canada), Lyrics (a Canadian wrote the song). If a song meets two of those criteria, it is considered Canadian. (There are other rules for songs that, for example, don’t have lyrics.)

The performance part of MAPL came under scrutiny by various groups because they don’t consider the place a song was recorded to be that relevant anymore. Some suggested replacing “performance” by “producer” and giving credit when the person producing the song is Canadian. Others suggested points for a Canadian editor or Canadian record label. But there isn’t a very good legal definition of what “producer” means, and it’s not clear editors or record labels should make a song Canadian.

The CRTC’s preliminary view is that the P in MAPL should be removed, in part because it’s often hard to determine where a song was recorded, especially in today’s world where everything is digitized. Another proceeding will be launched to discuss alternative proposals, but it’s clear the CRTC wants any other proposed criteria to have limited administrative burden.

Music database

Speaking of limiting that burden, an issue that came up a lot was that radio stations, particularly smaller ones, have trouble determining whether individual songs are Canadian, whether they’re French language, and what genre category they’re in. The industry proposed that the CRTC itself set up a database of songs so that broadcasters can pre-clear them instead of fighting with the commission after the fact during compliance checks and risking being in non-compliance because of a good faith mistake.

The CRTC has finally agreed to put this into motion, saying it is developing a “digital monitoring system and an open database to simplify and automatize the process of identifying musical selections.”

No date has been established for when this database will be available, beyond the vague “near future.” Once it’s in place, the need for regulations related to airplay will depend in part on how easy it will be to determine this information in the database. (An emerging artist quota, for example, could be implemented if that information is in there. And part of the reason for removing the performance part of MAPL is that there was no practical way to include performance locations in the database.)

Montages

Once upon a time, a radio station in Quebec had an idea for getting around a loophole in CRTC regulations. Because the French music quota of 65% was based on songs played in their entirety, they could take all the English-language hits, edit the best parts into a long montage, and have it all count as one song.

Over the years, the CRTC has tried to clamp down on abuse of this loophole, including in 2011 by limiting montages to 10% of a station’s airtime (that’s 12.6 hours a week, FYI). But the commission doesn’t believe that worked to solve the problem.

Requiring each excerpt in a montage to be counted individually would solve the problem but create others, including increased administrative burden, and the possibility of flipping things around so that stations would be incentivized to do montages of French-language songs to meet their quotas.

No solution has been proposed here, though it’s clear that montages will no longer be allowed to circumvent quotas (something the industry indirectly admitted it’s doing in its submissions, the CRTC says). Instead there will be yet another proceeding to discuss options.

Other changes

  • Emerging artists: The CRTC expects, but does not require, stations not already subject to such a quota to devote 5% of their music airtime to songs from Canadian emerging artists (an artist ceases to be emerging four years after their first commercially marketed song).
  • Pop music category: Under the previous rules, a song in a specialty music category like jazz or world music would transform into the pop music category (subject to higher CanCon quotas) if it gets popular enough to chart. This caused a lot of headaches for stations in specialty genres because they would have to keep track of how well songs did, and they would be disincentivized from playing the most popular songs in their niche. The commission recognized this and now won’t consider specialty music as pop even if it charts.
  • Content development (CCD): Little has changed here, but the CRTC will allow those who need to pay tangible benefits or other Canadian content development contributions to consider donations to community radio stations as eligible recipients. A further proceeding will be launched to discuss other issues like setting CCD at the group ownership level instead of station-by-station, with those below $10 million in annual revenues not having to pay anything, and whether to allocate 15% of basic CCD contributions to “a new national fund to support Indigenous artists and Canadian diversity.”
  • Local sales agreements: The commission is allowing some forms of local ad sales agreements between competing stations in a market without prior approval where the stations maintain separate news, programming and ownership, and where the number of stations involved would not cross the Common Ownership Policy threshold. Local management agreements, which are more involved, still require CRTC approval, but the commission is being more lenient here too, and will consider allowing them for stations that are profitable, while before they were generally limited to those who were losing money.

Things that aren’t changing

While there are some interesting changes being made, the big story in all this is what’s staying the same. Most of the big rules about commercial radio are unchanged, to the chagrin of those in the industry who wanted fundamental widespread reform.

The CRTC has decided to maintain:

  • The basic CanCon 35% quota (and 10% for specialty music)
  • The 65% French music quota for French-language stations
  • The 6% tangible benefit minimum (a de facto tax on the transfer of ownership of radio stations)
  • The definition of markets
  • The lack of specific quotas on local programming and local news
  • Rules regarding the use of HD Radio (though a future proceeding could review them for all radio stations)
  • A requirement for stations to ask permission before switching to or from a specialty format (including becoming a talk radio station)
  • Rules regarding reporting requirements and deadlines to submit annual returns (which a lot of stations have trouble meeting because of delays in auditing)

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