Policy changes introduced by the CRTC in the wake of the 2014 “Let’s Talk TV” hearings could lead to the loss of nearly 7,000 broadcasting and production positions and eliminate $1.4 billion a year from the Canadian economy by 2020, according to a new report.
Co-authored by the economic and media consulting firm Nordicity and broadcast consultant Peter H. Miller, the 100-page Canadian Television 2020: Technological and Regulatory Impacts report cautions there will be a “material, but not fatal erosion” of traditional TV in the short to mid-term, with the industry facing “profound challenges and changes” in the longer-term.
The report says policy changes introduced by the federal regulator will further exacerbate the challenges faced by the broadcast industry, which is grappling with viewers and advertisers migrating to online platforms.
Commissioned by ACTRA, the Canadian Media Guild, the Directors Guild of Canada, Friends of Canadian Broadcasting and the Unifor union (which represents approximately 14,500 workers in the media sector), the report says regulatory decisions stemming from “Let’s Talk TV” will also result in a $400 million decline in spending on Canadian programming by 2020.
It accuses the CRTC of opting for fundamental rather than incremental changes to broadcast policies, despite a lack of evidence suggesting previous regulatory approaches were becoming unworkable.
The report points to the federal regulator’s decisions regarding unbundling of services, over-the-top (OTT) services such as Netflix, Shomi and CraveTV and the predominance of Canadian programs as the primary drivers of the expected erosion.
The decision to make Canadian OTT services like Shomi and CraveTV available to all Canadians – Shomi, a joint venture between Rogers and Shaw Communications, was made available nationally in the summer, while Bell Media’s CraveTV was made available nationally on Jan. 1 – will “materially” increase cord-cutting and cord-shaving as well as take-up of streaming VOD services, the report predicts.
The report also predicts a decrease in specialty service take-up that will result in lost revenues for both individual broadcast groups and BDUs. It predicts some specialty services will be “unable to make the transition,” resulting in service closures.
The report predicts the decisions could result in a $970 million decrease in revenues for specialty and pay services, equivalent to 23% of their projected baseline revenue, by 2020.
The impact of unbundling is expected to have the most serious impact, accounting for a projected $466 million in lost revenue, while service closures are expected to account for $102 million in lost revenue.
Subscriptions to OTT services are projected to hit 7.9 million by 2020, up from a forecasted 5.4 million in 2015. The report also predicts half of all new Canadian households – comprised of two main groups: People under 30 and new immigrants – would be “cord nevers” by 2020, up from 30% last year.
The authors suggest a “minor tweaking” of the Let’s Talk TV decisions could reduce the negative impact of the decisions by as much as 75%.
