Tuesday, October 24, 2006

Canadain Radio Regulations

At McVay Media we have a number of stations throughout Canada that we help. It's a very interesting challenge as Canada clearly has a different culture and approach to radio than the U.S. Right now radio broadcasting is enjoying a solid growth pattern in Canada with revenues growing at record rates. The CRTC (the government regulation agency) is expanding the number of stations in many markets and there is also a bit of a consolidation wave going on in the ownership arena.

One of the regulations that really stands out to many U.S. programmers is the Canadian Content rule. This is a govt. regulation that 35% (in most cases) of the music played from 6a-12m must be of Canadian origin. The idea here is to grow and perserve Canadian artists, writers, producers and musicians.

The results have been very good for those in the Canadian music biz. While U.S. programmers may not realize it a lot of Canadian talent is on your weekly playlist. In Rock bands like Nickleback, Our Lady Peace, Theory of a Deadman, Hinder and many more hail from various Canadian locales. Country and AC also have a pretty strong line up of Canadian content.

While it may seem like a 'wierd' regulation to some it's worked out very well in Canada allowing many artists to build a career and hasn't handicaped the radio stations too much. But, the world is changing. With the advent and growth of streaming signals from anywhere in the globe with no regulations on content, satellite radio with less regulation on Canadian content, the spread of I-Pod/MP3 players and the advent of cell phone and WiFi networks that will stream music just around the corner suddenly the Canadian broadcaster will face increasing drains on their TSL and audience.

Now the CRTC and various artists organizations are lobbying for an increase in Canadian content to 40%. While 5% may not seem like a lot right now and in most formats there is probably enough quality/hit product to support it we also have to look at the long term competitive enviornment here. What would happen if the Canadian audience began to stray (as it already has in the U.S.) off to streams, cell phone stations, Podcasts, I-Pod/MP3, and other music entertainment sources leaving radio behind?

Forcing the stations to nearly 1/2 Canadian content could handicap Canadian radio. What happens when you don't have the room to expose big songs, developing artists and hot -in demand- music that is not from Canada. Your new media competition will not likely have similiar limitations and could end up with a stronger product that pulls the listener and Canadian music consumer away from the broadcast stations. Suddenly the goose (broadcasters) that laid the golden eggs for the musicians can't produce the results.

Both the broadcasters and the musicians in Canada are enjoying a healthy return on both sides of the fence. Will an increase help the musicians and not hurt the broadcasters? Do you want to find out?

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