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The Future Environment Facing the Canadian Broadcasting System

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Before the Canadian Radio-television and Telecommunications Commission The Future Environment Facing the Canadian Broadcasting System Comments Filed by the Coalition of Canadian Audio-visual Unions in response to the Call for Comments in Broadcasting Public Notice CRTC 2006-72, June 12, 2006 September 1, 2006 The Future Environment Facing the Canadian Broadcasting System Comments Filed by the Coalition of Canadian Audio-visual Unions Table of Contents 1. Introduction ................................................................................... 1 2. Executive Summary ...................................................................... 3 3. Comments on Matters Raised in Order in Council a) the current state of audio-visual technologies and their predicted evolution over the coming years........................ 6 b) with respect to the usage of audio-visual technologies by Canadians, (i) changes in this usage since January 1, 2000................. 9 (ii) changes in demand for various kinds of programming and programming services since January 1, 2000 ....................................................... 18 (iii) how Canadians of different generations use various technologies and the impact that these different uses will have on the broadcasting system .......................................................... 21 (iv) a comparison of the adoption rate for technologies between Canada and other countries ............................................................................ 27 (v) the demand for various kinds of programming and programming services by the Canadian population, taking into account its full diversity................... 36 (vi) how future generations will consume or access content, programming, and programming services ........................................................ 37 (vii) the impact this evolution of technologies has for content and programming choices available to Canadians, including local, regional, national and international content ........................ 39 c) with respect to the impact on the broadcasting system, (i) the adoption of technologies by broadcasting undertakings since January 1, 2000.................................. 40 ________________________________________________________________________ Comments to the CRTC by the Coalition of Canadian Audio-visual Unions The Future Environment Facing the Canadian Broadcasting System ii (ii) the economic and regulatory impact on the broadcasting system caused by these technologies.............................................................. 58 (iii) the kind of content delivered through the regulated and the non-regulated aspects of the system, and how it is delivered ................... 63 (iv) the different methods for providing local, regional and national programming on a going forward basis .................................................... 65 (v) the predicted economic impact these technologies will have on broadcasting undertakings....................................................................... 66 (vi) the adoption of technologies by the independent production sector and their impact on this sector. ................................................. 67 Appendix 1 Nordicity Group Ltd., Validation of Projections for TV Advertising Revenues: Notes on Methodology........................................................ 72 Appendix 2 Purchase details for PricewaterhouseCoopers LLP (PwC), Global Entertainment & Media Outlook: 2006-2010 (June 2006).......................... 81 ________________________________________________________________________ Comments to the CRTC by the Coalition of Canadian Audio-visual Unions The Future Environment Facing the Canadian Broadcasting System Comments Filed by the Coalition of Canadian Audio-visual Unions 1. Introduction These comments were prepared by the Coalition of Canadian Audio-visual Unions (CCAU) in response to the CRTC’s Call for Comments in Broadcasting Public Notice CRTC 2006-72, June 12, 2006. The CCAU is a coalition of ten Canadian audio-visual unions, and is comprised of the following organizations: the Alliance of Canadian Cinema Television and Radio Artists (“ACTRA”), the Directors Guild of Canada (“DGC”), the National Association of Broadcast Employees and Technicians Local 700-CEP (“NABET”), the Writers Guild of Canada (“WGC”), the American Federation of Musicians – Canada (“AFM-Canada”), Union des artistes (“UdA”), the Commun- ications, Energy and Paperworkers Union of Canada (“CEP”), Association des réalisateurs et réalisatrices du Québec (“ARRQ”), Association Québécoise des techniciens de l’image et du son (“AQTIS”), and Société des auteurs de radio, télévision et cinéma (“SARTeC”). These comments are being made on behalf of ACTRA, CEP, DGC, NABET/CEP and WGC. On June 8, 2006, the Governor in Council issued Order in Council P.C. 2006- 519, pursuant to section 15 of the Broadcasting Act. In the Order in Council, the Governor in Council noted that “…the evolution of audio-visual technologies is profoundly changing how Canadians communicate, express themselves and interact with various media, bringing with it important economic and social implications and leading to a new communications and media environment.” In the midst of this rapidly changing environment in the audio-visual sector, the Governor in Council stated that it was “of the view that the Canadian broadcasting system, using various audio-visual technologies, must remain relevant in a global digital environment and that Canada should continue to play a leading role in the development and usage of world class communications technologies while fostering Canadian cultural choices and broadening public access to local, regional, national and international information and programming.” Given the environment facing the Canadian broadcasting system, the Governor in Council requested that the Canadian Radio-television and ________________________________________________________________________ Comments to the CRTC by the Coalition of Canadian Audio-visual Unions The Future Environment Facing the Canadian Broadcasting System 2 Telecommunications Commission (CRTC) prepare a “factual report on the future environment” facing the Canadian broadcasting system. To this end, the CRTC issued a Call for Comments. This submission responds to that call. In preparing its submission, the CCAU commissioned Nordicity Group Ltd. (“Nordicity”) to report to it on current and expected future trends in audio-visual technologies. In that connection, Nordicity used information from secondary sources to compile a comprehensive review of the recent trends in audio-visual technologies, including adoption rates of new technologies in Canada and elsewhere. The CCAU also retained Nordicity to validate projections for the advertising revenue likely to be generated by CBC and the private broadcasting sector in the period up to 2010. In that regard, Nordicity relied on estimates and forecasts developed by PricewaterhouseCoopers LLP (PwC) in its publication, Global Entertainment & Media Outlook: 2006-2010. Information on how to order a copy of the PwC publication is provided in Appendix 2 of this submission. Nordicity also validated the revenues (subscriber + advertising) of Canadian pay- and specialty- television services for the same period. The methodology used by Nordicity in validating these revenue projections is set out in Appendix 1. Except where Nordicity or PwC are specifically named and credited, however, the observations in this submission are those of the CCAU. ________________________________________________________________________ Comments to the CRTC by the Coalition of Canadian Audio-visual Unions The Future Environment Facing the Canadian Broadcasting System 3 2. Executive Summary This submission provides updated data on the advent of new technologies and their effect on the Canadian broadcasting system. The comments by CCAU include commentary on the development of digital television, the impact of Internet distribution, the uptake of high definition television, and the use of mobile and other devices to deliver audio-visual content. Given the rapid changes in technology and delivery platforms that have occurred, it is understandable that the Governor in Council would want to evaluate their impact on the broadcasting system and how it is or may be regulated. A report published by IBM early in 2006 with the title, “The End of Television,” suggested in fact that these new platforms and technologies, some of them unregulated, might cause significant harm to conventional television broadcasting. Upon a review of the data, however, it turns out that the IBM report was exaggerated and overdrawn. Far from killing television, the new technologies will complement television and may end up supporting it. A review of the impact of technology between 2000 and 2005 on the system is instructive. During this period, cable television systems in Canada followed the lead of direct-to-home (DTH) satellite and introduced digital packages with many more specialty channels and with video-on-demand. Broadband penetration of the Internet soared, facilitating access to video material on the web. Cell phones began to introduce video features. Yet despite these changes, overall TV viewing in Canada per capita has stayed the same or actually increased.1 While viewing by certain demographic groups has declined slightly, viewing by other groups has increased. Overall, per capita viewing numbers have increased from 23.7 hours a week in 2001-02 to 25.1 hours
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