Broadcasting
Policy
Monitoring
Report
2007

Radio
Television
Broadcasting distribution
Diversity and social issues
New media

Canadian Radio-television and
Telecommunications Commission (CRTC)
Les Terrasses de la Chaudière
Central Building
1 Promenade du Portage
Gatineau, Quebec

Mailing Address:
CRTC
Ottawa, Ontario
Canada
K1A 0N2

Telephone: 1 (877) 249-2782 (toll-free)
TDD: 1 (877) 909-2782 (toll-free)

This publication is available electronically on our website at www.crtc.gc.ca

This publication can be made available in alternative format upon request.

Ce document est également disponible en français.

July 2007

Introduction

This is the eighth edition of the CRTC's Broadcasting Policy Monitoring Report, which provides an on-going assessment of the impact of CRTC regulations, policies and decisions¹ on the achievement of the objectives of the Broadcasting Act. The 2007 version continues to measure the performance of the Canadian broadcasting system. As in the past, we hope that this report will help to foster a more open and better-informed public discussion of broadcasting policy in Canada. The Commission invites parties to use the report to enrich their participation in our regulatory policy and licensing proceedings.

The 2007 edition updates the performance indicators and continues the trends outlined in previous reports.

The data and information used as the basis of the CRTC's policy monitoring is drawn from many sources. These sources include (1) information filed by participants in the normal course of the Commission's hearings and public proceedings; (2) information obtained from Statistics Canada; (3) audience measures from BBM Canada (diary radio data and metered data for francophone audiences in Quebec) and BBM Nielsen Media Research (national metered data); (4) the Annual Financial Returns filed by licensees of the CRTC; (5) programming information filed as part of licensees' television program logs; (6) the Commission's ownership records and radio compliance monitoring results; (7) publicly available information, such as annual reports from publicly traded companies, CRTC decisions and public notices; and (8) research undertaken by the CRTC and CyberTRENDS, BBM Analytics.

The report is sub-divided in to six sections: Overview, Radio, Television, Broadcasting Distribution, Social Issues and New Media.

Interested parties are welcome to provide comments for improvements or additions to future editions of the report and can do so by forwarding them to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2 or by using our On-Line Services located on our website at www.crtc.gc.ca.

The Broadcasting Policy Monitoring Report is also available electronically at www.crtc.gc.ca/eng/publications.htm

Table of contents

I. Overview

A. The CRTC
B. Diversity of programming in the Canadian broadcasting system
C. Streamlining activities
     1. Streamlining broadcasting processes
     2. 2007/08 Streamlining initiatives
     3. New service standards for processing certain types of broadcasting applications
D. Broadcasting dispute resolution
     1. Number and type of disputes
     2. Time taken to resolve disputes
     3. Discretionary services and BDU regulation review processes
E. Diversity of voices proceeding

II. Radio

A. Radio and audio services available in Canada
     1. Number and type of radio and audio services authorized to broadcast in Canada
     2. Licensing of over-the-air radio stations
B. Tuning trends
     1. Tuning to the top private commercial radio ownership groups
     2. Popularity of formats
C. Financial performance of private commercial radio stations
     1. Revenues and profits before interest and taxes (PBIT) - 2000 to 2006
     2. Revenues of the top private commercial radio ownership groups
D. Airplay and financial support for Canadian music, including French-language vocal music
     1. Promoting the airplay of Canadian and French-language vocal music
     2. Financial support for the development of Canadian talent and content
E. Digital radio
F. Over-the-air ethnic radio
G. Religious radio
H. Native radio
I. Community radio
J. Campus radio
K. Audio services delivered by broadcasting distribution undertakings
     1. Specialty audio services
     2. Pay audio programming services
L. Multi-channel subscription radio services
     1. Subscription radio via terrestrial transmitters
     2. Subscription radio via satellite radio services
M. The national public broadcaster
     1. Over-the-air radio stations
     2. Pay audio service
     3. Satellite subscription radio undertaking
N. Competitive licensing
O. 2006 Commercial Radio Policy Review
     1. Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006
     2. Digital radio policy, Broadcasting Public Notice CRTC 2006-160, 15 December 2006
     3. Revised policy concerning the issuance of calls for radio applications and a new process for applications to serve small markets, Broadcasting Public Notice CRTC 2006-159, 15 December 2006

III. Television

A. Diversity of television services available in Canada
B. Audience
     1. National average weekly viewing hours by age group
     2. Viewing share of Canadian and non-Canadian services by language and type of service
     3. Distribution of viewing by program genre
          a) English-language Canadian services
          b) French-language Canadian services
C. Financial performance
     1. All Canada
     2. 2005 and 2006 financial results for individual specialty, pay, PPV and VOD analog and digital services sorted by type and language
     3. Financial results by language of service
          a) English-language private conventional OTA television, pay, PPV, VOD and specialty services
          b) French-language private conventional, pay, PPV and specialty services
          c) Ethnic & third-language pay and specialty services
     4. Financial results for large ownership groups
          a) Private conventional OTA television ownership groups
          b) National public broadcaster - CBC (Canadian Broadcasting Corporation) conventional OTA television stations
          c) Companies with significant ownership interests in specialty, pay, PPV and VOD, analog and digital services
D. Contribution to Canadian programming
     1. Conventional OTA television
          a) Eligible expenditures on Canadian programming (CPE)
          b) Expenditures on non-Canadian programming
     2. Pay, PPV, VOD and specialty services
          a) Pay and specialty services
          b) PPV and VOD services
E. Tangible benefits resulting from the transfers of ownership or control of television broadcasting undertakings
F. Canadian television programming
     1. Canadian priority programming
     2. Incentives for original Canadian television drama
G. Specialty, pay, PPV and VOD services
H. Ethnic programming services
     1. Over-the-air Ethnic television stations
     2. Ethnic pay & specialty services
          a) Analog ethnic specialty services
          b) Category 2 digital ethnic pay & specialty services
     3. Non-Canadian third-language programming services eligible for distribution in Canada
I. Native television services
J. Religious television stations
K. The national public broadcaster
     1. Over-the-air conventional television stations
     2. Specialty services
L. Community-based television
M. Non-Canadian satellite services authorized in Canada
N. Canadian digital television services
     1. Over-the-air digital television services
     2. Digital pay and specialty services
     3. Migration of pay and specialty services from analog to digital distribution
     4. Licensing and distribution framework for Canadian pay and specialty services in high definition (HD) format

IV. Broadcasting distribution

A. Number of Canadian broadcasting distribution undertaking
B. Subscriber levels of incumbent and alternative BDU delivery systems
C. Top Canadian distributors
D. Ensuring a financially strong sector
     1. Revenues
     2. Earnings before interest, taxes, depreciation and amortization margins for cable and DTH and MDS undertakings
E. Ensuring contributions to Canadian programming and local expression
     1. CRTC Task Force on the Canadian Television Fund
     2. Contributions to programming funds
     3. Total community channel expenses
     4. Numer of systems maintaining a community channel
F. Promoting digital technology
G. Review of the regulatory frameworks for broadcasting distribution undertakings and discretionary programming services

V. Diversity and social issues

A. Official languages
B. Diversity
     1. Services targeted to specific communities
     2. Private television broadcasters
     3. The Canadian Broadcasting Corporation (CBC)
     4. Private radio broadcasters
C. Accessibility
     1. Access for persons who are deaf or hard of hearing
     2. Access for persons who are blind or whose vision is impaired
     3. National reading services
D. Programming standards
     1. Complaints and enquiries
     2. Canadian Broadcast Standards Council (CBSC)
     3. Advertising Standards Canada (ASC)

VI. New media

A. New media broadcasting undertakings
B. Internet
     1. Canadian advertising on the Internet
     2. Internet access by Canadians
     3. Effect of Internet use and other new audio-visual technologies on broadcast media

Glossary

I. Overview

A. The CRTC

• The Canadian Radio-television and Telecommunications Commission (CRTC) is an independent public authority in charge of regulating and supervising Canadian broadcasting and telecommunications. It serves the public interest and is empowered and governed by the Broadcasting Act, 1991 (the Act) and the Telecommunications Act. The CRTC also reports to Parliament through the Minister of Canadian Heritage. The Governor in Council may issue to the Commission directions of general application on matters with respect to the objectives of the broadcasting or regulatory policy.
• One of the CRTC's mandates is to ensure that programming in the Canadian broad-casting system reflects Canadian creativity and talent, Canada's linguistic duality, multicultural diversity, the special place of Aboriginal people within our society and our social values.
• The Commission strives to strike a balance between its cultural, social and economic objectives, with the wants and needs of Canadian citizens, industry and various interest groups.
• The CRTC also seeks to ensure that its policy directions for the Canadian broadcasting industry are keeping pace with emerging technologies.
• The Commission fulfils its broadcasting regulatory and supervisory responsibilities by means of a number of inter-related activities, which include:
  • issuing, renewing and amending licences for broadcasting undertakings;
  • making determinations on mergers, acquisitions and changes of ownership in the broadcasting industry;
  • collaborating with the industry to resolve competitive disputes;
  • developing and implementing regulatory policies with a view to meeting the objectives of the Act;
  • monitoring, assessing and reviewing, where appropriate, regulatory frameworks to meet its policy objectives; and
  • monitoring the programming and financial obligations of broadcasting undertakings to ensure compliance with regulations and conditions of licence.
  • In all its activities, the Commission is guided by four basic working principles: transparency; fairness; predictability; timeliness. The Commission recognizes that time has a value in the business world and each regulation bears a cost. Consequently, it endeavours to make its decisions promptly and regulate only where necessary and in the least intrusive manner possible.
  • A summary of the Commission's activities relating to the Canadian broadcasting industry during the 2006-2007 fiscal year is provided in CRTC Accomplishments 2006-2007.¹
  • The CRTC also presents its three year work plan for the 2007 to 2010 period in 3 Year Work Plan 2007-2010.² The Commission finalized this plan subsequent to consultations held with industry stakeholders.

B. Diversity of programming in the Canadian broadcasting system

• Section 3(1)(i) of the Act states, in part, that the programming provided by the Canadian broadcasting system should:

1. be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes,
2. be drawn from local, regional, national and international sources,
3. include educational programs and community programs,

• To implement this policy objective, the Commission endeavours to ensure that Canadians have access to a diversity of programming drawn from a variety of sources.
• The Canadian broadcasting system is comprised of private and public services that provide specialty and general interest Canadian and non-Canadian programming in English and French as well as Aboriginal, multicultural and third-languages. It also makes available a significant number of foreign services.
• Tables 2.1 and 3.1 located in the Radio and Television sections of this report provide a listing of the types of radio, audio and television regulated services authorized to broadcast in Canada.

C. Streamlining activities

1. Streamlining broadcasting processes

• In Streamlined processes for certain broadcasting applications, Broadcasting Circular CRTC 2006-1, 27 March 2006 (Circular 2006-1), the Commission announced an expedited process whereby it would inform applicants of the status of their licence amendment applications within 15 business days of receiving an application. The Commission estimated that, in the absence of any significant or unresolved issues or concerns surrounding the applications in question, the processing time could be reduced by approximately half for licence amendment applications processed administratively or by a written public proceeding.
• In 2006-07,³ the Commission has indeed reduced the average time it takes to deal with amendment applications by 50 percent compared to the 2005-06 fiscal year.
• The Commission continued reviewing broadcasting processes in 2006-07 in the following areas: processing of requests to add foreign third-language services to the Lists of Eligible Satellite Services; exempting certain network operations from licensing requirements; reviewing broadcasting application forms; and reviewing the policy concerning the issuance of radio calls for applications. The Commission has also set out measures to streamline certain reporting requirements for Class 1 cable distribution undertakings having 20,000 or more subscribers and for television licensees, and has issued an exemption order for certain third-language television undertakings from licensing requirements.

2. 2007/08 Streamlining initiatives

• The Commission has undertaken an exhaustive review of the processing of applications using the public hearing route and significant measures have been identified to streamline and expedite this process. These streamlining initiatives should be announced in fiscal year 2007-2008.

3. New service standards for processing certain types of broadcasting applications

• In Introduction of service standards for certain broadcasting applications, Broadcasting Circular CRTC 2006-2, 5 April 2006, the Commission announced new service standards for applications for licence amendments and licence renewals currently processed by public notice, as well as applications processed using an administrative approach that does not entail a public process.
• The quarterly and annual statistics for the period 1 April 2006 to 31 March 2007⁴ show that the Commission has either met or surpassed these standards.

D. Broadcasting dispute resolution

• The Broadcasting Directorate's dispute resolution team was created in 2000 to more effectively process and resolve disputes in an increasingly competitive broadcasting industry. The process and procedures used for resolving competitive and access disputes are outlined in Practices and procedures for resolving competitive and access disputes, Public Notice CRTC 2000-65, 12 May 2000.
• Disputes can generally be classified as follows: (1) disputes between broadcasting distributors and programming services concerning the terms of distribution, including wholesale rates; (2) disputes between competing broadcasting distributors over access to buildings and to the end-user; and (3) disputes between programmers regarding programming rights and markets served.
• Wherever possible, the Commission employs alternative dispute resolution (ADR) techniques, including fact-finding meetings, mediation and staff opinions, to attempt to break deadlocks and assist parties to resolve their disputes. When these techniques are insufficient, the Commission may, where appropriate, render determinations on disputes by way of "final offer" or by way of an expedited written process.
• "Final offer" arbitration processes are typically conducted on a confidential basis, both to encourage candour on the part of the parties and to take into account that the matters in dispute often involve commercially sensitive information, the disclosure of which could cause harm that would outweigh any public interest benefit.
• In certain disputes that come before the Commission as allegations of undue preference or disadvantage, the complainant seeks a ruling by the Commission that the preference or disadvantage has material and serious consequences for the complainant and/or the Canadian broadcasting system, and that are contrary to the public interest. Cases involving such public issues are usually immediately placed on a public file.
• As a further means to hasten the resolution of broadcasting disputes, the Commission has adopted procedures for the conduct of expedited public hearings. In Expedited procedure for resolving issues arising under the Broadcasting Act, Broadcasting Circular CRTC 2005-463, 18 April 2005, the Commission announced that, in order to expedite decisions on certain issues arising under the Broadcasting Act, panels of Commissioners will be struck to conduct public hearings to deal with such issues on an accelerated basis. These hearings complement the Commission's existing dispute resolution guidelines and tools and are similar to its procedures for resolving disputes arising under the Telecommunications Act.⁵
• The Commission has also increased the number of informal ADR interventions. Informal interventions are intended to assist in early detection and removal of obstacles to resolution between the disputing parties. Typically, these interventions take place prior to the filing of formal complaints or requests for dispute resolution and prior to the provision of any related documentation. Most of these interventions can be effectively conducted by telephone or informal meetings with minimal actual Commission intervention.

1. Number and type of disputes

Table 1.1: Number of dispute files received in 2006/07⁽¹⁾

(1) 1 April 2006 to 31 March 2007
(2) Section 9 of the Broadcasting Distribution Regulations
(3) Sections 12 to 15 of the Broadcasting Distribution Regulations

• Between 1 April 2006 and 31 March 2007, the Commission dealt with four outstanding dispute files from the previous period and opened five new files. There were four dispute files outstanding at the end of the period - one of these files has been suspended at the request of the parties, and the remaining three were received in the second half of the review period.
• During the same period, the Commission also resolved seven of the 14 informal dispute interventions undertaken. Of the remaining seven informal dispute files, two have been suspended at the request of the parties and five were active as of 31 March 2007.

2. Time taken to resolve disputes

• The following table compares the average time taken to resolve disputes over each of the last three years. In arriving at these averages, it should be noted that some of the disputes were suspended, at the request of the parties, for various periods of time in order to permit the parties to negotiate. Time while suspended is not included in calculating time to closure.

Table 1.2: Fiscal year comparisons of the average number of days to resolve disputes

Notes: Excludes informal interventions. Files commenced in one year but concluded in another are included in the calculation for the year of closure.

3. Discretionary services and BDU regulation review processes

• In preparation for the BDU regulations review process scheduled for 2007/08, the Commission conducted preliminary industry consultations in November and December 2006. Dispute resolution was among the issues identified as important for the Commission's regulatory framework going forward. It is anticipated that the Commission's role in broadcasting dispute resolution will be an important part of the regulatory review process.

E. Diversity of voices proceeding

• In order to implement the objectives of the Act, the Commission has established regulations and policies designed to ensure that the broadcasting system offers a diversity of voices and that programming reflecting the concerns of all Canadians has reasonable access to the system.
• In Diversity of Voices Proceeding, Broadcasting Notice of Public Hearing CRTC 2007-5, 13 April 2007 (Public Notice 2007-5), the Commission announced that in light of the current wave of consolidation in the Canadian broadcasting industry, it would be holding a public hearing in September 2007 to review its approach to ownership consolidation and other issues related to the diversity of voices in Canada.
• The objective of this hearing is to conduct a comprehensive review of the CRTC's policies with respect to diversity of voices. The Commission wishes to ensure that the system provides Canadians with the greatest possible diversity of voices, including editorial voices while taking into consideration the increasing integration of all elements in the system. The topics under review will include:
  • existing regulatory framework
  • common ownership of broadcasting undertakings
  • concentration of ownership
  • cross-media ownership or horizontal integration
  • vertical integration
  • the benefits policy
  • licence trafficking
  • ownership of new media undertakings
  • ensuring broadcast voices that represent and reflect Canada's diversity
  • relationship with the Competition bureau.

II. Radio

A. Radio and audio services available in Canada

1. Number and type of radio and audio services authorized to broadcast in Canada

• The following table provides a summary of the various types of radio and audio services licensed to broadcast in the Canada as of 31 December 2006.

Table 2.1: Canadian radio and audio services authorized⁽¹⁾

(1) Number of services approved, but not necessarily broadcasting. Unless a request for an extension of time is approved by the Commission, most undertakings must be operational within 24 months of the decision date.
(2) Includes bilingual (English and French) and English-native services.
(3) Includes French-native services.
(4) Excludes radicommunication distribution undertakings (RDU), rebroadcasters and exempted radio services.
(5) Approval of a new FM radio station resulting from an AM to FM band conversion will result in station double counting until the AM licence is surrendered by the licensee - roughly three months after AM and FM simulcast transition period.
(6) Most of the commercial network licences noted here fall under Exemption order respecting certain network operations, Broadcasting Public Notice CRTC 2006-143, 10 November 2006 and will not need to be renewed after their current licence term expire.
(7) Includes commercial and not-for-profit religious radio stations.
(8) Excludes network licences.
(9) Not in operation.
Sources: CRTC APP1205 and APP1200 reports - run 4 January 2007

2. Licensing of over-the-air radio stations

• The following table sets out, by language, licence category, type and process the number of radio applications approved by the Commission during the past four years.

Table 2.2: Number of new over-the-air radio stations approved from
1 January 2003 to 31 December 2006

Notes: Excludes radicommunication distribution undertakings (RDU), rebroadcasters, pay audio, specialty audio services and multi-channel subscription radio services.
"Other" includes not-for-profit, CBC/SRC, tourist, environment Canada, etc. radio stations
* 2003 and 2004 figures have been restated.
Sources: CRTC Decisions issued from 1 January 2003 to 31 December 2006

B. Tuning trends

• The following tables set out the percentage of hours tuned to radio and audio services in an average week during the BBM Fall surveys from 1999 to 2006.

Table 2.3: Average weekly hours tuned per capita¹ by age group

* In average hours
Source: BBM Radio Fall Surveys, MicroBBM _ All persons 12+, Monday to Sunday, 5 a.m. to 1 a.m.

• The overall per capita weekly radio listening levels decreased by 1/2 hour from 2005 to 2006. With the exception of adults aged 25 to 34, listening levels in all demographics decreased over the same time period. This decrease was most notable in the teen demographics and for adults aged from 18 to 24 and 55 to 64, where weekly listening levels decreased by approximately one hour.
• Since 1999, the overall per capita weekly radio listening levels decreasing by almost two hours. The most notable decreases have been in the teen demographics and for adults aged from 18 to 34, where weekly listening levels have decreased three to four hours.

Table 2.4: Radio tuning share in an average week and
average weekly hours tuned by listener²

Note: Minor variances are due to rounding. "Other" is principally over-the-air tuning to U.S. border stations. "Other" also includes tuning to Internet radio that is not attributed to Canadian over-the-air radio stations, multi-channel subscription (satellite radio) services, pay and specialty audio services, over-the-air and video services available on cable and unknown.
Source: BBM Fall 1999 to Fall 2006 for all persons 12+, Monday to Sunday, 5 a.m. to 1 a.m., BBM Canada, 2006-07 Radio Databook.

• AM radio continues to decline in total average hours tuned, while FM recuperates these hours. In 2006, approximately 73% of the tuning to Canadian radio stations was through the FM band.
• In Fall 2006, the average hours tuned per listener was 20.4 hours per week, 20 minutes less than the previous year.
• According to BBM:³
  • 91.2% of Canadians aged 12 and over listened to the radio for at least 15 minutes per week in Fall 2006, as compared to 94% in 1998.
  • In Fall 2006, 47% of the total hours tuned by Canadians was from home, 28% from a vehicle, 23% from work and 2% was from other sources.
  • 40% of Canadians surveyed reported listening to the radio for more than 16.5 hours in an average week, accounting for approximately 80% of the total hours tuned.
• The following pie chart shows the percentage of hours tuned in an average week to over-the-air (OTA) radio and audio services.

Chart 2.1: Radio tuning share in an average week, 5 a.m. to 1 a.m.,
BBM Fall 2006

"Audio Services" includes tuning to: multi-channel subscription (satellite radio) services; pay & specialty audio services; OTA radio stations & video services broadcast on cable; the internet.
Minor variances are due to rounding.

Table 2.5: Listening to radio stations via the internet, pay &
specialty programming services delivered by broadcasting undertakings and
multi-channel subscription radio services

Minor variances are due to rounding.
Source: MicroBBM, Fall 2006, All Canada, Persons 12+ Monday to Sunday, 5 a.m. to 1 a.m.

• The Fall 2006 survey indicates that the tuning to Canadian radio stations via the Internet, pay audio and satellite radio is still small.
• After less than one year in operation, satellite radio tuning share has surpassed the combined tuning share of the Internet, pay and specialty programming services.
• A primary target for satellite radio is the automobile market. CSR and Sirius Canada have both concluded agreements with various Canadian automotive partners to have satellite radios installed in their vehicles. Satellite radio will also be expanding its market through carriage on cable, direct-to-home (DTH) and mobile wireless carriers placing satellite radio services in direct competition with pay audio for its target audience in these formats.
• According to the CBC,⁴ approximately 20% of BDU subscribers listened to pay audio services in 2005. CBC states that while pay audio has enjoyed reasonable success, its lack of portability and convenience of wireless audio services combined with direct competition from satellite radio services distributed by BDUs may threaten the future of pay audio services. The CBC predicts that the pay audio service providers may need to partner with wireless operators in the future in order to retain their subscribers in a "mobile" world.
• The following table shows that tuning to the radio via the Internet and satellite radio is highest among adults aged from 25 to 49. Tuning to pay audio is highest among adults aged from 35 to 39 and 55 to 64.

Table 2.6: Distribution of tuning to radio stations via the internet, pay &
specialty programming services delivered by broadcasting undertakings
and multi-channel subscription radio services by age group

Minor variances are due to rounding.
Source: MicroBBM, Fall 2006, All Canada, Persons 12+, Monday to Sunday, 5 a.m. to 1 a.m.

1. Tuning to the top private commercial radio ownership groups

• The following tables set out the tuning achieved by the largest private commercial radio operators in 2004, 2005 and 2006.

a) All Canada

Table 2.7: Tuning to the largest private commercial radio
operators in Canada⁽¹⁾

Minor variances are due to rounding.
(1) Refer to "Notes to tables 2.7 to 2.12" following Table 2.12.
(2) Listening hours includes tuning to private commercial.
(3) Listening hours includes tuning to public and private Canadian and U.S. stations.
Sources: BBM Fall 2004 to 2006 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC APP and financial databases

• The tuning share by the largest radio groups has remained about the same since 2002.

b) English-language stations

Table 2.8: Tuning to the largest English-language private
commercial radio operators in Canada⁽¹⁾

Minor variances are due to rounding.
(1) Refer to "Notes to tables 2.7 to 2.12" following Table 2.12.
(2) Listening hours include tuning to public and private Canadian English-language stations.
Sources: BBM Fall 2004 to 2006 surveys, 5 a.m. to 1a.m., all persons 12+; and CRTC APP and financial databases

c) French-language stations

Table 2.9: Tuning to the largest French-language private
commercial radio operators in Canada⁽¹⁾

Minor variances are due to rounding.
(1) Refer to "Notes to tables 2.7 to 2.12" following Table 2.12.
(2) Listening hours include tuning to public and private Canadian French-language stations.
Sources: BBM Fall 2004 to 2006 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC APP and financial databases

2. Popularity of formats

• Charts 2.2 and 2.3 show the percentage of tuning to Canadian English- and French-language radio stations by format. These charts also indicate the number of Canadian stations that were broadcasting in these formats. The information used is partially based on BBM Fall 2006 data and excludes tuning to Internet, ethnic, bilingual and U.S. stations.

Chart 2.2: English-language station formats - BBM Fall 2006⁵

Chart 2.3: French-language station formats - BBM Fall 2006⁶

C. Financial performance of private commercial radio stations⁷

• One of the Commission's overall objectives of the 2006 Commercial Radio Policy is to develop policies that assist in the creation of conditions for a strong, well-financed commercial radio sector that is capable of contributing to the fulfillment of the objectives set out in the Act.

• This section provides a brief overview of the financial performance of the Canadian commercial radio industry.⁸ The following charts show the revenues, profits before interest and taxes (PBIT) and PBIT margins achieved by private commercial radio stations in Canada.

1. Revenues and profits before interest and taxes (PBIT) - 2000 to 2006

a) All Canada

Chart 2.4: Revenues - Private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• Total revenues reported by private commercial radio stations increased 5.7% or $75.9 million from 2005 to 2006. There were 33 additional radio stations reporting financial results in 2006 compared to 2005.
• Since 2000, combined AM and FM revenues have increase by an average of 5.5% per year. During this same period, the revenues reported by FM radio stations increased by an average of 7.4% per year while AM radio stations increased by an average of 0.3% per year.
• From 2000 to 2006, the number of radio stations reporting financial results has increased by 20% or 99 stations. The number of FM radio stations reporting financial results has increased by 62% or by 160 stations, while the number of AM stations has decreased by 26%, or by 61 stations. Approximately 38% of the new FM radio stations reporting financial results involved AM stations converting to FM frequencies.

Chart 2.5: PBIT - Private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Chart 2.6: PBIT Margin - Private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• PBIT increased by $7.5 million or 2.7% from 2005 to 2006. PBIT margins for the last four years remain in the 20% range.
• FM radio stations continue to achieve PBIT margins in the 24% range.
• While still low, the PBIT margins reported by AM radio stations have increased annually since 2003. PBIT increased $4.5 million, or 33.7%, from 2005 to 2006.

b) English-language stations

Chart 2.7: Revenues - English-language private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• English-language FM radio revenues increased by 6.1% from 2005 to 2006. Since 2000, FM revenues have increased by an average of 7.7% per year.
• English-language AM radio revenues increased by 5.3% from 2005 to 2006.
• Combined English-language AM and FM radio revenues increased by 5.9% from 2005 to 2006 achieving an average annual increase of 5.6% since 2000.
• The number of English-language radio stations continues to increase annually. Roughly 23% of the new English-language FM stations reporting in 2006 were by licensees who had converted their AM frequencies to FM frequencies.

Chart 2.8: PBIT - English-language private commercial
radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Chart 2.9: PBIT Margins - English-language private commercial
radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• English-language radio stations report increased PBIT of $5.8 million, or 2.3%, from 2005 to 2006. 2006 PBIT margins held at 2005 levels. Since 2000, the PBIT for English radio stations has increased by an average of 10.5% per year.
• PBIT results for English-language FM radio stations matches 2005 levels. Since 2000, the PBIT for French-language radio stations has increased by an average of 7.2% per year.
• PBIT for English-language AM radio stations continues to improve, increasing by $5.8 million (33.4%) from 2005 to 2006.

c) French-language stations

Chart 2.10: Revenues - French-language private commercial
radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• Revenues for French-language FM radio increased by 4.8% from 2005 to 2006. Since 2000, FM revenues have increased by an average of 6.4% per year.
• Revenues for French-language AM radio increased by 1.4% from 2005 to 2006. AM revenues have decreased by an average of 6.2% per year, since 2000.
• Overall revenues for French-language radio increased by 4.5% from 2005 to 2006. French-language radio has experienced an average annual increase of 4.9%, since 2000.

Chart 2.11: PBIT - French-language private commercial
radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Chart 2.12: PBIT Margins - French-language private commercial
radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• French-language radio stations report a 9.8% increase in PBIT from 2005 to 2006. The 2006 PBIT margin is holding at 2004 and 2005 levels. Since 2000, the PBIT for French-language radio has increased by an average of 0.9% per year.
• From 2000 to 2006, the PBIT of French-language FM radio stations has increased by an average of 3% per year while French-language AM radio stations have reported average annual losses of 13.8% per year.

d) Ethnic stations

Chart 2.13: Revenues - Ethnic private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• Ethnic radio stations derive approximately 94% of their advertising revenues from local sources, compared to 76% for English-language and 63% for French-language stations.
• Total revenues for ethnic radio increased 4.9% from 2005 to 2006. A significant portion of this increase in due to a new FM radio station (CKYE-FM Vancouver) reporting for the first time in 2006. Since 2000, total revenues achieved by ethnic radio stations have increased by an average of 5% per year.

Chart 2.14: PBIT - Ethnic private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Chart 2.15: PBIT Margins - Ethnic private commercial radio stations

Note: Includes network results; 2000 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

• Since 2000, the PBIT for Ethnic AM and FM radio stations has increased by an average of 7.4% and 15.5% per year respectively. On a combined basis, PBIT has increased by an average of 9.4% per year.

2. Revenues of the top private commercial radio ownership groups

• The following tables set out the revenues and national revenue share achieved by the largest private commercial radio operators in 2004, 2005 and 2006.

a) All Canada

Table 2.10: Radio revenues of the largest radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.7 to 2.12" following Table 2.12.
(2) Includes private commercial networks and commercial ethnic radio stations.
Minor variances are due to rounding. Source: CRTC financial database

• Although the number of programming undertakings along with the total revenues reported by the largest radio operators continues to increase annually, their share of total national revenues has held at approximately 70% since 2002.

b) English-language stations

Table 2.11: Radio revenues of the largest English-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.7 to 2.12" following Table 2.12.
(2) Includes private commercial network revenues.
Minor variances are due to rounding. Source: CRTC financial database

c) French-language stations

Table 2.12: Radio revenues of the largest French-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.7 to 2.12" below.
(2) Includes network radio revenues.
Minor variances are due to rounding.
Source: CRTC financial database

Notes to tables 2.7 to 2.12:

• The ownership structure reflects transactions authorised by the Commission during the broadcast year, not the closing date of the transaction.
• An undertaking's entire annual revenue is attributed to the corporation that was deemed to be its owner as of 31 August.
• In some instances, the 2004 and 2005 results have been restated to reflect current data on file.
• Corus' 2005 results reflect the sale of CIZZ-FM and CKGY-FM Red Deer to Newcap.
• Newcap's 2005 results reflect the new CKWY-FM Wainwright station as well as the following five stations that were acquired through the transfer of ownership or control: CIZZ-FM and CKGY-FM Red Deer from Corus, CJUK-FM Thunder Bay station from Big Pond Communications 2000 Inc. and CKSA-FM Lloydminster from Sask-Alta Broadcasters Limited. The 2006 results also reflect four new stations (CILV-FM Ottawa-Gatineau, CFRK-FM Fredericton, CJEG-FM Bonnyville and CIXF-FM Brooks) and four stations acquired through the transfer of ownership or control (CFXW-FM Whitecourt, CKJS and CKFE-FM Winnipeg and CFCW-FM Camrose).
• Astral's and Corus' results for 2005 reflect the transaction that was approved pursuant to Exchange of radio assets in Quebec between Astral Media Radio inc. and Corus Entertainment Inc., Broadcasting Decision CRTC 2005-15, 21 January 2005, in which Astral acquired five stations from Corus and Corus acquired eight stations from Astral.
• CHUM's 2005 results include the new Edmonton station as well as CFAX Victoria and CHBE-FM acquired from Seacoast Communications Group Inc.
• Rogers' 2006 results include three new stations (CHNI-FM Saint John, CJNI-FM Halifax and CKNI-F Moncton) as well as a new network radio undertaking.

D. Airplay and financial support for Canadian music, including French-language vocal music

• The Canadian radio sector has an important role to play in showcasing the work and contributing to the development and promotion of Canadian artists. It does this in two ways.
  • The first is through the airplay of Canadian music, including French-language vocal music.
  • The second is through financial contributions towards the development of Canadian talent and content. These development initiatives help ensure the availability and promotion of high quality Canadian music, and other creative material for broadcast.

1. Promoting the airplay of Canadian and French-language vocal music

• Unless otherwise indicated in their radio licence, AM and FM radio licensees must broadcast the levels of Canadian music and French-language vocal music set out in section 2.2 of the Radio Regulations.⁹
• Commercial, campus and community radio stations are required to devote at least 35% of its vocal popular musical (category 2) selections to Canadian selections each week.¹⁰ This minimum level also applies to the 6 a.m. - 6 p.m. period from Monday to Friday on commercial stations only.
• French-language stations are required to devote at least 65% vocal musical selections from category 2 to musical selections in the French language each week. Commercial French-language radio stations are also required to broadcast at least 55% of their category 2 vocal selections between the 6 a.m. - 6 p.m. period from Monday to Friday in French-language.
• Stations that broadcast ethnic programming have the flexibility to choose to program either a minimum of 35% Canadian music over the entire broadcast week or to provide at least 7% Canadian music during ethnic programming periods and at least 35% during the non-ethnic programming.
• In the 2006 Commercial Radio Policy, the Commission increased the minimum requirements for Canadian concert music (subcategory 31) to 25% and jazz and blues music (subcategory 34) to 20%. The revised Canadian content levels of concert music and jazz and blues is expected to come into effect by way of amendments to the Radio Regulations later in 2007. The Radio Regulations require that all other category 3 special interest music subcategories broadcast at least 10% Canadian selections each week.
• In the 2006 Commercial Radio Policy, the Commission also indicated that applicants for new licences, licence renewals and transfers of ownership or control of radio stations would be asked to make specific commitments to provide airplay for and to promotion for emerging Canadian artists and their music.
• The following table shows the number of radio stations that were in compliance with their Canadian content and French-language vocal music requirements in 2006. The results are based on a limited sample of stations analyzed from 1 January 2006 to 31 December 2006 and are not necessarily representative of the radio industry as a whole. The Commission's approach to instances of non-compliance is outlined in Practices regarding radio non-compliance, Circular No. 444, 7 May 2001.

Table 2.13: Canadian content and French-language vocal music

(1) As per the Radio Regulations or set out as part of the licensee's condition of licence.
* Includes CBC / SRC and community AM, FM and network radio stations.
Source: CRTC, Evaluation of licence renewal applications from 1 January 2006 to 31 December 2006

2. Financial support for the development of Canadian talent and content

• One of the methods the Commission uses to increase the amount of Canadian content is to require Canadian broadcasters to make financial contributions toward the development of Canadian talent and content.

a) Canadian content development (CCD) to replace Canadian talent development (CTD)

• In 2006 Radio Commercial Policy the Commission introduced a new approach to the Canadian talent development (CTD) called Canadian content development (CCD).
• CCD places a greater emphasis on the creation and promotion of audio content for broadcast through the development of Canadian musical and spoken word talent, including journalists. This approach is expected to help increase the amount of high-quality Canadian music and spoken word material, and promote emerging Canadian talent.
• Under this new approach, the Commission has also established a contribution system based on the radio station's revenues, rather than on the size of the market in which it operates.
• The new CCD policy will replace the existing CTD regulations and is expected to come into effect 1 September 2007.

b) Over-the-air radio stations

• The Commission reviews radio broadcasters' contribution commitments in the context of: i) applications for new radio stations; ii) renewal of radio licences; and iii) transfers of control or ownership (benefits)

i) Applications for new radio stations

• Between 1 January 2003 and 31 December 2006, the Commission licensed 59 new radio stations through competitive processes in markets across Canada. The successful applicants have committed over $51.2 million to CTD initiatives over their initial licence terms.
• In addition, there were 174 new radio licences or AM to FM conversions granted without a competitive process between 1 January 2003 and 31 December 2006. These licensees committed a combined $5.6 million towards CTD initiatives.

ii) Renewal of radio licences

• As part of their licence renewal applications, all licensees of private commercial radio stations are asked to make an annual financial commitment to CTD.
• In Contributions by radio stations to Canadian talent development - A new approach, Public Notice CRTC 1995-196, 17 November 1995, the Commission, in conjunction with the industry, established an approach that would ensure a minimum annual payment of $1.8 million to eligible third parties associated with CTD. In 2005-06, these radio stations contributed $8.7 million towards CTD initiatives.

iii) Transfers of control or ownership (benefits)

• As outlined in the 2006 Commercial Radio Policy, applicants for the transfer of ownership or control of commercial radio stations must make commitments that represent a minimum direct financial contribution to CTD of 6% of the value of the transaction. Three percent is to be allocated to the Radio StarMaker Fund/Fonds RADIOStar¹¹ music marketing and promotion fund, two percent to either FACTOR¹² or MUSICACTION¹³ and one percent at the discretion of the purchaser to other eligible CTD initiatives.
• From the adoption of the Commercial Radio Policy to 31 December 2006, the Commission has approved 107 changes in ownership or control involving 388 radio stations.
• CTD commitments (benefits) from these transactions have totalled $99.3 million.

Table 2.14: Value of radio transactions and corresponding transfer
benefits for the period 1 May 1998 to 31 December 2006

Value determined by the Commission for the purpose of calculating transfer benefits.
Minor variances are due to rounding.
Source: CRTC Decisions and Administrative approvals

iv) Summary of annual CTD contributions reported by over-the-air radio licensees

• The following table indicates the annual amounts contributed to CTD initiatives by radio licensees. Contributions are based on annual disbursements reported by licensees for the period 1 September to 31 August.

Table 2.15: Annual CTD contributions reported by radio licensees ($000)

Following an internal review, some of the contribution amounts may have been reclassified or restated.
Minor variances are due to rounding.
Source: CRTC Annual returns and financial database run 26 June 2007

c) Other audio services

• Pay audio services are required to contribute a minimum of 4% of the previous year's annual gross revenues to CTD initiatives.
• Multichannel subscription radio services are required to contribute at least 5% of the gross annual revenues to CTD initiatives. This percentage rate increases to 6%, if the number of subscribers exceeds a certain level.¹⁴ Half of these contributions must be directed to the development of Canadian French-language talent and the other half is to be directed to the development of Canadian English-language talent.

E. Digital radio

• In Digital radio policy, Broadcasting Public Notice CRTC 2006-160, 15 December 2006 (2006 Digital Radio Policy), the Commission introduced amendments to its policy¹⁵ that will hopefully encourage and enhance the prospects of digital radio broadcasting in Canada.
• The new policy eliminates transitional digital licences. Under the revised policy, the Commission will accept applications to obtain permanent digital licences from applicants wishing to develop whatever broadcast services they believe will be of greatest interest to the listening public. New digital radio licence holders will fall under the same regulatory framework as existing FM analogue services.
• As of 31 December 2006, there were 76 licences for transitional digital radio programming undertakings authorized to broadcast. Of these licences, 57 have been issued to existing commercial radio programming undertakings, one to a stand-alone ethnic radio programming undertaking and 18 to existing CBC stations. 74 of these licences will expire on 31 August 2007. The remaining two expire in 2009.

Table 2.16: Markets with transitional digital⁽¹⁾ radio stations in Canada⁽²⁾

(1) L-Band - from 1452 to 1492 MHz.
(2) Numbers of stations approved but not necessarily on air.
(3) Based on BBM Radio Markets.
(4) Includes a stand-alone ethnic digital radio station located in Toronto (has not commenced operation).
Source: CRTC APP 1205 report - run 4 January 2007

F. Over-the-air ethnic radio

• The Commission's ethnic broadcasting policy is set out in Ethnic broadcasting policy, Public Notice CRTC 1999-117, 16 July 1999 (Ethnic Policy). The primary goal of this policy is to ensure access by Canadians to ethnic programming to the maximum extent practicable, given resource limitations. As one way of furthering this objective, the Commission has licensed over-the-air ethnic radio broadcasters that specialize in providing ethnic programming.
• Ethnic radio stations are required to devote not less than 60% of the broadcast week to ethnic programming¹⁶ and at least 50% of all programming broadcast must be third-language programming.¹⁷
• The Commission is of the view that a primary responsibility of over-the-air ethnic radio stations should be to serve and reflect their local community. Licensees are expected to report on past and future local programming initiatives at the time of licence renewal.
• Ethnic stations are also required to serve a range of ethnic groups in a variety of third-languages. This approach allows for the provision of service to groups that would not otherwise be able to afford their own single-language service. However, where many distinct ethnic groups are served in the overall market, individual stations may be permitted to provide more hours of service to fewer groups.
• As of 31 December 2006, there were 21 private commercial over-the-air ethnic radio stations authorised to broadcast in Canada. The following is a listing of ethnic radio stations by market. The listing also indicates the minimum number of distinct ethnic groups that each station is required to serve in each broadcast week as well as the minimum number of third languages that they must broadcast.

Vancouver

• CHKG-FM is required to broadcast a minimum of 100 hours of ethnic programming per week. It is required to provide programming directed to a minimum of 20 cultural groups in a minimum of 15 different languages. It is not authorized to broadcast any programming directed to the Chinese community during weekdays between 6 a.m. and 3 p.m.
• CHMB is required to broadcast ethnic programming directed to a minimum of 12 cultural groups in a minimum of 12 different languages. The station is also required to provide programming directed to Aboriginal people.
• CJRJ is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 17 different languages. All of the station's programming must be devoted to ethnic programming and at least 95% of its programming must be in third languages. At least 73% of programming must be in the Hindustani and Punjabi languages. This station is not permitted to broadcast in a Chinese language.
• CJVB is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 23 different languages.
• CKYE-FM is required to provide programming directed to a minimum of 15 cultural groups in a minimum of 15 different languages. Not less than 90% of its programming must be ethnic, all of which must be in third languages. Not less than 75% of the ethnic programming must be in the Punjabi, Hindi and Urdu languages. This station is not permitted to broadcast in a Chinese language.

Edmonton

• CKER-FM is required to broadcast ethnic programming directed towards not less than 19 distinct ethnic groups, in not less than 19 different languages.

Calgary

• CHKF-FM is required to provide ethnic programming directed to a minimum of 10 ethno-cultural groups in a minimum of 19 different languages.

Winnipeg

• CKJS is required to broadcast ethnic programming directed towards not less than 19 cultural groups, in not less than 16 different languages. The station must broadcast a minimum of 73 hours 30 minutes of ethnic programs.

Toronto

• CIRV-FM is required to provide programming directed to a minimum of 9 cultural groups in a minimum of 9 different languages.
• CHIN-FM is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 20 different languages.
• CHIN is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 17 different languages.
• CHKT is required to provide programming directed to a minimum of 14 cultural groups in a minimum of 15 different languages.
• CJSA-FM is required to provide programming directed to a minimum of 16 cultural groups in a minimum of 22 languages. The station must devote a minimum of 90% of the programming broadcast to ethnic programs. At least 48% of all ethnic programs must be in the Tamil, Hindi and Filipino languages. A minimum of 80% of the programming broadcast must be in a third language.
• CIAO is required to provide programming directed to a minimum of 12 cultural groups in a minimum of 13 different languages.
• CJMR is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 15 different languages. The station must limit the broadcast of brokered ethnic programming to a maximum of 62% of the broadcast week.
• In Ethnic AM radio station in Toronto, Broadcasting Decision CRTC 2006-117, 4 April 2006, the Commission approved an application by Canadian Hellenic Toronto Radio Inc. for a new commercial ethnic AM radio station in Toronto. The new station will direct its programming primarily to the Toronto area's Greek-speaking community and will also provide ethnic programming in Armenian, Romanian, Serbian and Bulgarian, as well as in English. This station will be required to provide programming directed to a minimum of 5 cultural groups in a minimum of 6 languages. The station must also devote a minimum of 88% of the programming to third-language programs.

Montréal

• CFMB is required to provide programming directed to a minimum of 19 cultural groups in a minimum of 18 different languages.
• CJWI is a French-language ethnic station. The station must devote not less than 90% of its programming to French-language ethnic programming, targeting the Haitian, Latin-American and African communities. The remaining 10% must be in a third language.
• CKDG-FM is required to provide programming directed to a minimum of 6 cultural groups in a minimum of 8 languages. The station must devote a minimum of 70% of the programming to ethnic programs. A minimum of 60% of the programming must be in third languages.
• In Ethnic AM radio station in Montréal, Broadcasting Decision CRTC 2006-82, 15 March 2006, the Commission approved an application by 9015-2018 Québec inc. (doing business under the name of Radio Moyen Orient du Canada) for a broadcasting licence to operate a new ethnic commercial AM radio station in Montréal. The applicant proposed a service primarily intended for Arab communities in Montréal. The station is required to provide programming directed to a minimum of 10 cultural groups in a minimum of 4 languages.

Ottawa

• CJLL-FM is required to provide ethnic programming directed towards not less than 37 cultural groups, in not less than 20 different languages in each broadcast week. The station must broadcast a minimum of 94% of ethnic programs. At least 92% of programming must be in third languages other than English, French or Canadian Aboriginal language.

G. Religious radio

• The Commission's policy on religious broadcasting is set out in Religious Broadcasting Policy Public Notice CRTC 1993-78, 3 June 1993.
• The Commission's approach to religious broadcasting is based on the following principles:
  • Recognition of alternative values: the policy recognizes the legitimate needs and interests of those who wish to receive various kinds of religious programming.
  • Importance of balance: licensees are required to provide balance on matters of public concern and the Commission considers that religion is a matter of public concern. The balance policy seeks to ensure that a reasonably consistent listener will be exposed to a spectrum of differing views on issues of public concern within a reasonable period of time.
• As of 31 December 2006, there were 69 radio stations licensed to broadcast primarily religious music and/or spoken word. Of these 69 stations, 26 are French-language, 42 are English-language and one is third-language.

H. Native radio

• Native radio is governed by the Native Broadcasting Policy, Public Notice CRTC 1990-89, 20 September 1990. The policy framework is designed to improve the quality and quantity of access by Aboriginal broadcasters to the Canadian broadcasting system.
• These undertakings play a distinct role in fostering the development of Aboriginal cultures and, where possible, the preservation of ancestral languages.
• The greatest concentration of activity in Aboriginal broadcasting involves community-based radio stations in small remote locations.
• There are two types of Native radio stations:
  • Type A: A Native radio station is a Type A station if, at the time the licence is issued or renewed, no other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force.
    
    As a result of Exemption order respecting certain native radio undertakings, Public Notice CRTC 1998-62, 9 July 1998, Type A stations are no longer required to hold a broadcasting licence from the Commission.
     
  • Type B: A Native radio station is a Type B station if, at the time the licence is issued or renewed, at least one other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force. There are currently 46 Type B Native radio stations and seven native network radio licenses.

Table 2.17: Revenues and PBIT margins for Type B
Native radio stations

Notes: 2002 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
* Includes government and band council grants and contributions from other sources.
Source: CRTC financial database

I. Community radio

• The Community radio policy, Public Notice CRTC 2000-13, 28 January 2000 (Community Radio Policy), states that the primary objective for community radio stations is to provide a local programming service that differs in style and substance from the services provided by commercial stations and the CBC. Programming provided by community radio stations should be relevant to the communities served, including official language minorities, adding diversity to the broadcasting system by increasing program choice in both music and spoken word.
• Community radio stations are owned and controlled by not-for-profit organizations, the structure of which provides for membership, management, operation and programming primarily by members of the community at large. In addition to advertising revenues, community radio stations also receive revenues from fundraising, grants, and other sources.
• There are three kinds of community radio stations: Type A, Type B and Developmental. A community station is a Type A station if, at the time of licensing, no radio station other than the CBC is operating in the same language in all or part of the same market. A community station is a Type B station if, at the time of licensing, there is at least one station, other than the CBC, operating in the same language in all or part of the same market. Developmental community stations are generally licensed for three years at which time they are expected to have filed an application with the Commission for a regular community radio licence, or to cease operations.
• As of 31 December 2006, there are 45 Type A, 50 Type B and ten Developmental community stations authorized. Of the Type A community stations, 34 are French-language, 10 are English-language and one is bilingual. Of the Type B community stations, 26 are French-language, 23 are English-language and one is multicultural. There are nine English-language and one bilingual Developmental community stations.

Table 2.18: Revenues and PBIT margins of community
radio stations

Notes: 2002 to 2005 figures have been updated to reflect current August 31^st aggregate results.
Minor variances are due to rounding.
* Includes fundraising, grants and other sources.
Source: CRTC financial database

J. Campus radio

• A campus radio stations is a not-for-profit organization that is associated with a post-secondary educational institution. As stated in Campus radio policy, Public Notice CRTC 2000-12, 28 January 2000, there are two types of campus radio stations: community-based campus, and instructional. A community-based campus station's programming is primarily produced by volunteers who are either students or community members. The primary objective of an instructional campus station is the training of professional broadcasters.
• There are currently 51 campus stations licensed across Canada: 41 Community-Based campus stations, nine Instructional and one Developmental campus station.
• Of the community-based campus stations, five are French-language and 36 are English-language.
• The majority of campus radio revenues come from sources other than advertising, for example, revenues from the educational institution with which they are associated, grants, the local community and fundraising.

Table 2.19: Revenues for campus radio stations

Notes: 2002 to 2005 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
* Includes fees, fundraising, grants.
Source: CRTC financial database

K. Audio services delivered by broadcasting distribution undertakings

1. Specialty audio services

• In New licensing framework for specialty audio programming services, Broadcasting Public Notice CRTC 2002-53, 12 September 2002, the Commission recognized the scarcity of over-the-air frequencies by offering an opportunity for a range of new discretionary specialty audio programming services distributed through other means.
• Specialty audio services are defined as audio programming services that are radio undertakings, other than licensed over-the-air services, delivered by broadcasting distribution undertaking and are specialized with respect to their content and/or target audience.
• There are no carriage rights associated with their operation. Nor are there limits to the amount of advertising that may be broadcast on these services and licensees can negotiate a subscriber fee with distribution undertakings.
• As of 31 December 2006, the Commission has approved nine specialty audio services (one regional and eight national) targeting three ethnic communities and five Christian communities.

2. Pay audio programming services

• In 1995,¹⁸ following a competitive process, the Commission approved two national pay audio programming services, namely Galaxie and Max Trax. These services offer more than 30 channels of commercial-free music. Each channel is devoted to a specific type of music, including classical, contemporary Christian, jazz, rap, rock, etc.
• Galaxie and Max Trax are carried on a discretionary basis by major distributors across Canada. Subscriber revenue is the revenue source for these services.

L. Multi-channel subscription radio services

• In Introduction to Broadcasting Decisions CRTC 2005-246 to 2005-248: Licensing of new satellite and terrestrial subscription radio undertakings, Broadcasting Public Notice CRTC 2005-61, 16 June 2005, the Commission set out the licensing framework for satellite subscription radio services and announced approval of three national subscription radio undertakings that provide a package of radio channels to subscribers for a monthly fee.

1. Subscription radio via terrestrial transmitters

• The programming of one of the authorized services¹⁹ (an undertaking to be operated by CHUM) will be delivered entirely by terrestrial transmitters and all channels will be Canadian-produced.

2. Subscription radio via satellite radio services

• The remaining two programming services authorized, Canadian Satellite Radio Inc. (CSR) and SIRIUS Canada Inc. (Sirius Canada), are delivered primarily by satellite, with terrestrial transmitters, as required, to fill the gaps in coverage. Each of these North American satellite-based services provides a mix of Canadian and non-Canadian produced channels. CSR offers programming channels that are provided by U.S.-based XM Satellite Radio Inc. (XM) and Sirius Canada offers programming channels provided by U.S.-based SIRIUS Satellite Radio inc (SIRIUS).
• The CSR and Sirius Canada services were launched in December 2005. As of  28 February 2007, CSR reported that it had 237,000 subscribers, and as of  22 November 2006, Sirius reported that it had over 200,000 subscribers.²⁰
• In Distribution of satellite subscription radio services, Broadcasting Decision CRTC 2006-650, 28 November 2006, the Commission approved, subject to certain provisions, an application from Rogers Cable Communications Inc. (Rogers) to carry licensed satellite subscription radio on a digital basis.
• As of 28 February 2007, the Commission has approved similar amendments to the broadcasting licences of other cable broadcasting distribution undertakings (Bell Canada, TELUS, Vidéotron and Cogeco).²¹
• In March 2007,²² the Commission also authorized, subject to certain provisions, DTH satellite services to carry satellite subscription radio on a digital basis.

M. The national public broadcaster

• The CBC is Canada's national public broadcaster. As such, pursuant to section 3(1)(l) of the Act, it should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains. Section 3(1)(m) of the Act states that CBC's programming should:

1. be predominantly and distinctively Canadian,
2. reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions,
3. actively contribute to the flow and exchange of cultural expression,
4. be in English and in French, reflecting the different needs and circumstances of each official language community, including the particular needs and circumstances of English and French linguistic minorities,
5. strive to be of equivalent quality in English and French,
6. contribute to shared national consciousness and identity,
7. be made available throughout Canada by the most appropriate and efficient means and as resources become available for the purpose, and
8. reflect the multicultural and multiracial nature of Canada.

1. Over-the-air radio stations

• The CBC operates four national radio network services: Radio One and Radio 2 in English, and La Première Chaîne and Espace musique in French. Additionally, the CBC provides a unique radio service serving Canada's northern communities, broadcasting in English, French and eight Aboriginal languages. The CBC also operates Radio-Canada International, an international radio service broadcasting in nine languages.
• The CBC radio services broadcast commercial-free and are funded by the federal government.

2. Pay audio service

• The CBC owns and operates the national pay audio service Galaxie, offering 45 channels of continuous music, without talk, to nearly six million subscribers.²³ The revenues for this bilingual service are derived entirely from subscriber revenues.

3. Satellite subscription radio undertaking

• The CBC is also a partner²⁴ in the satellite radio service SIRIUS Canada, which was launched in December 2005.

N. Competitive licensing

• In Introductory statement - Licensing new radio stations, Decision CRTC 99-480, 28 October 1999 (Decision 99-480), the Commission outlined the factors that will generally be among those relevant to the evaluation of competitive applications. Decision 99-480 also noted that the relative weight and significance of the factors would vary depending on the specific circumstances of the market concerned.
• The Commission also examines applications in terms of their furtherance of the objectives of the Act, particularly with respect to the production of local and regional programming.
• The following table reveals the factors that were noted in the Commission's decisions as contributing to the approval of radio applications dealt with in a competitive process, as set out in decisions issued from 1 January 2003 to the 31 December 2006.

Table 2.20: Factors contributing to successful applications for
radio licences considered in competitive processes from
1 January 2003 to 31 December 2006

Source: CRTC Broadcasting Public Notices (PN) and Decisions (noted in table)
Legend: PN = Public Notice; PH = Public Hearing; Languages: e = English-language, f = French-language, e/n = English & Aboriginal, f/n = French & Aboriginal, m = 3^rd languages (other than English, French & Aboriginal); Type: C = Commercial, NC = Non-Commercial, N = Native, CO = Community, CC = Community based Campus, CI = Campus Instructional, MF = Musical format, SpMF = Specialty music format, Flip = Conversion of existing AM radio station to FM frequency,
CBC1 = English-language CBC "Radio One" format, CBC2 = English-language CBC "Radio Two" format, SRC1 = French-language CBC "La première chaîne" format, SRC2 = French-language CBC "Espace musique" format.
(1) "Canadian content" refers to applications that proposed to exceed the minimum regulatory requirement for Canadian content.
(2) In decision 2006-327, the Commission also approved technical amendments to the licence of CJTS-FM Lethbridge which resulted in changes the station's status from a low-power unprotected service to a regular Class B FM station.
(3) In decisions 2006-349 and 2006-350, the Commission also approved changes to the licences of two existing French-language stations, CKNU-FM Donnacona and CFEL-FM Montmagny, operating in markets adjacent to the Quebec market.

O. 2006 Commercial Radio Policy Review

• In 2006 the Commission reviewed its commercial radio policy.
• In Review of the Commercial Radio Policy, Broadcasting Notice of Public Hearing CRTC 2006-1, 13 January 2006, the Commission invited the public and interested parties to participate in its commercial radio policy review. The Commission received 194 written comments and 48 parties made oral presentations at a public hearing which took place in May 2006.
• On 15 December 2006, the Commission issued revisions to its commercial and digital radio policies. Also resulting from this process, were amendments to the Commission's policy relating to the issuance of calls for radio applications.

1. Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006 (2006 Commercial Radio Policy)

• In the 2006 Commercial Radio Policy the Commission sets out its revised policy for commercial radio. Areas addressed include the airplay and financial support for Canadian music and French-language vocal music, cultural diversity, local management agreements and local sales agreements, and local programming and infomercials. A new approach to Canadian content development (CCD) initiatives which will replace the existing Canadian talent development (CTD) policy effective 1 September 2007 is also announced.
• With respect to the future impact of new technologies on conventional radio, the Commission states that although the radio industry is currently healthy, it is entering a period of uncertainty as it comes to grips with the challenges and opportunities that will be provided by new technologies for the distribution of audio programming. As such, the Commission will continue to monitor how new distribution technologies for audio programming are affecting the radio industry.
• The Commission also noted that many radio broadcasters are exploring ways of using new distribution platforms to complement the service provided by their conventional radio stations. The Commission therefore indicated its intention to question radio licensees, at licence renewal and in new licensing and ownership transfer proceedings, about their plans to employ new distribution platforms to the benefit of the Canadian broadcasting system.

2. Digital radio policy, Broadcasting Public Notice CRTC 2006-160, 15 December 2006 (Public Notice 2006-160)

• In this public notice, the Commission sets out its revised policy for digital radio broadcasting.

3. Revised policy concerning the issuance of calls for radio applications and a new process for applications to serve small markets, Broadcasting Public Notice CRTC 2006-159, 15 December 2006 (Public Notice 2006-159)

• The objective in issuing calls for radio applications is to ensure that the best possible application is licensed and that applications are dealt within an efficient manner. In Public Notice 2006-159, the Commission sets out changes to its call policy with the objective of introducing greater certainty into this process.

a) Revised radio call policy for markets with populations up to 250,000

• In response to the challenging environment faced by broadcasters in smaller radio markets (where the population aged 12 and above does not exceed 250,000), the Commission modified its policy relating to the issuance of calls for small market radio applications.
• Applications for new radio stations in smaller markets will be subjected to the revised market evaluation process outlined in Public Notice 2006-159. If the Commission's final determination is that the market is incapable of supporting a new radio station, the application will be returned to the applicant and, in some cases, a public notice will be issued detailing the Commission's conclusions for not proceeding with a call for applications.

b) Two-year pause in processing applications after the issuance of a decision following a call for applications (all markets)

• Where the Commission decides not to issue a call based on unfavourable market conditions or after the issuance of a decision following a call for applications, the Commission will not generally be disposed to accepting applications for this market for a period of two years from the date of the public notice announcing the Commission decision.

c) Further consultations with interested parties

• The Commission also indicated that it would continue to explore further possible streamlining approaches related to the issuance of calls for applications with interest parties.
• In order to provide the broadcasting industry with current and meaningful data on the health of individual radio markets, the Commission indicated its intention to release aggregate data on small, medium and large markets on an annual basis. The Commission will first have to meet with CAB and other interested parties in order to address the issues of confidentiality of financial information in these markets. The Commission feels that this measure will contribute to enhanced transparency, the reduction of applications in markets experiencing slower growth and to the prevention of over licensing.

III. Television

A. Diversity of television services available in Canada

• The following table provides a summary of the various types of Canadian and non-Canadian television services that are authorized to broadcast in Canada as of 31 December 2006.

Table 3.1: Television services available in Canada

Excludes radicommunication distribution undertakings (RDU), rebroadcasters, exempt television services and those specialty services where the authority has expired. Also excludes some network licences.
*Includes bilingual (English and French) and native services.

1. Includes satellite to cable services.
2. Includes only digital category 2 specialty services that have been launched as of 31 December 2006. As of 31 December 2006, the Commission has approved 292 digital category 2 specialty services.
3. Includes only pay services that have been launched as of 31 December 2006. 26 pay services have been approved by the Commission.
4. Number of services approved but not necessarily in operation. Two English-language, one French-language and 13 bilingual VOD services have been approved. Of these, it is estimated that, as of 31 December 2006, nine had been launched.
5. Number of channel reported by BDU licensees as of 31 August 2006. Excludes class 2 and 3 BDUs.
6. Carriage of authorized services is at the discretion of the broadcast distribution undertaking. Refer to Appendix ll of Revised lists of eligible satellite services, Broadcasting Public Notice CRTC 2007-2, 2 January 2007 for complete listing of eligible services approved as of 31 December 2006.
7. Number of over-the-air transitional digital television approved, but not necessarily in operation. As of 31 December 2006, 16 stations were broadcasting. Refer to Table 3.16 for detailed listing.
8. Excludes private commercial religious stations.
9. Includes three commercial conventional OTA television stations.

Sources: CRTC APP1205 report dated 31 December 2006, CRTC decisions and CRTC Financial database system as of  31 August 2006

B. Audience

1. National average weekly viewing hours by age group

• The following chart shows the national average weekly viewing hours in Canada by age group for the 2002-03 to 2005-06 television seasons,¹ using BBM/NMR² national metered data for all persons 2+, Monday to Sunday, 6 a.m. to 6 a.m.

Chart 3.1: Per viewer³ average weekly viewing hours by age group

Note: Results have been restated using BBM/NMR national metered data. In previous editions of the BPMR this data was based on BBM Metered data.
Source: BBM Canada, TV Meter Databook, 1 September 2005 to 27 August 2006 issue

• The average weekly viewing hours for all persons aged 2+ has decreased by one hour since 2002/03. This decrease is most notable for teens 12 to 17 and adults aged 18 to 34.
• According to BBM, Sunday continues to be the most popular television viewing day of the week.

2. Viewing share of Canadian and non-Canadian services by language and type of service

Table 3.2: Viewing share of Canadian and non-Canadian services
by language and type of service

All Canada

BBM/NMR* national metered data - 2002-03, 2003-04, 2004-05 and 2005-06 broadcast years⁽¹⁾
for all persons 2+, Monday to Sunday, 6 a.m. to 6 a.m.