When the CRTC launched its process to implement the Online Streaming Act (Bill C-11) in May 2023, they promised to take a “blank sheet of paper” approach. One that would allow them to re-imagine the Canadian broadcasting system. At Music Canada, we recognized this as a once-in-a-generation regulatory process. The government had set out to regulate a market that had been unregulated for more than a quarter century and we were committed to making sure that the CRTC understood the modern music industry in the streaming age.
Unfortunately, to date, it’s clear the CRTC is not focused on a new system for our industry’s modern reality, but instead on new funding streams for legacy recipients.
In its first major decision, the CRTC announced that music streaming services would need to pay an unprecedented 5 percent of their Canadian revenues to support Canada’s legacy broadcasting system—not the digital marketplace they serve Canadians in. This decision and its disconnect could put at risk the important investments that streaming platforms are making in Canada, to the detriment of Canada’s music sector.
Licensed music streaming services have become essential partners of the Canadian music industry. They have teams on the ground who serve as champions of Canadian and Indigenous artists, helping them gain exposure and build their profiles. They also educate artists and label teams on the best ways to leverage their platforms, host industry events and seminars, and much more.
These investments directly help Canadian and Indigenous artists build audiences both at home and abroad.
And then, of that 5 percent contribution, the streaming platforms are required to contribute 30 percent of it to a new fund to support commercial radio news in smaller markets. It’s frankly bewildering that the CRTC would divert funding from music streaming platforms away from the music industry to subsidize commercial radio news. Put simply, digital platforms are being asked to subsidize a totally different, struggling industry.
There’s no world where a “blank sheet of paper” would include this cross-subsidization. Every dollar diverted to other institutions or policy aims is a dollar not invested in helping artists build their careers and share Canada’s music with the world.
The effect of these decisions is already playing out in the audiovisual industry. In September, for example, Netflix announced it was pulling its funding for several Canadian arts organizations. They stated that the $25 million Netflix had invested since 2017, which directly supported the careers of artists, would now be redirected to the “CRTC’s investment mandate.”
Over the next year, the CRTC will consider setting further regulations on issues such as Canadian content and discoverability, which could have far-reaching impacts on the listening experience that Canadians have grown to love. If regulations create friction in the listening experience, it could drive consumers to piracy and unlicensed services that don’t pay artists. This would undermine everything the Broadcasting Act sets out to achieve.
Ultimately, if the government wants to regulate music streaming, then regulations must reflect how Canadians—and fans around the world—find and listen to the artists they love on these platforms.
This article was made possible by the Digital Media Association and the generosity of readers like you. Donate today.
