Change financial threshold for Online Streaming Act exemptions, CRTC told

The proposed financial threshold for exemption for online streaming undertakings in the new Broadcasting Act should be changed, several organizations have told the CRTC. How much it should be altered is the subject of a rigorous debate. Earlier this week the commission published interventions on two interrelated consultations regarding the Online Streaming Act which was recently passed by Parliament: one on how to define which online undertakings must register with the CRTC and whether to repeal the digital media exemption order (DMEO) or the video-on-demand (VOD) exemption order (VODEO). Previously, a broadcasting undertaking needed to either be licensed or be exempted from the requirement to hold a licence in order to operate in Canada. Online audio and video undertakings were able to operate with an exemption order. Under the updated Broadcasting Act, online audio and video undertakings do not need to hold a licence nor an exemption order and as a result “the DMEO and VODEO no longer appear to be the appropriate tools for regulating these undertakings,” according to the commission. In its consultations respectively, the commission proposed a threshold for which undertakings will be exempt from the Online Undertakings Registration Regulations and used the same metrics for determining which would be exempt from conditions of service. The regulator received a tsunami of comments, with over 100 participants taking various stands on the new regime in both consultations. The CRTC proposed to exempt online undertakings whose single activity consists of providing video games services or consists of providing unique transactions; is affiliated with a broadcasting ownership group that has, after deducting any excluded revenue, gross annual revenues of less than $10 million; or that have no affiliation whatsoever with a broadcasting ownership group, if they have, after deducting any excluded revenue, gross annual revenues of less than $10 million. The $10 million threshold was received with a Goldilocks reaction, with some saying it is too high, some saying it is too low, and others maintaining it is just right. “We do not have a recommendation at this stage as to whether the proposed $10 million threshold is appropriate,” the Motion Picture Association Canada wrote to the commission. It noted, however, that inclusion in the CRTC’s Annual Digital Media Survey begins with annual revenues of $50 million in audiovisual services and $25 million for audio services. That raised the question of whether the bar should be higher for the Streaming Act. Apple Canada Inc., Alphabet Inc. division Google Canada Corp. and TikTok Technology Canada Inc. called for the use of the $50 million figure. They feel it would more closely align with the digital media survey numbers. Microsoft Corp. suggested $25 million. The Canadian Association of Broadcasters wants the level pegged at $20 million, as did Corus Entertainment Inc. BCE Inc. and Cogeco Inc. The Public Broadcasting Service of the United States also stated the limit is too low. Among those wanting to lower the threshold is ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists. It calls on the level to be set at $5 million. The National Campus and Community Radio Association wants it placed at $2.5 million. FRIENDS was even more stringent, demanding the rate be set at $1 million annually. Telus Corp. was ambiguous, merely stating that the CRTC may want to lower the barrier. The Canadian Media Producers Association also called for a lower rate, without going into specific numbers, as did the Canadian Association of Community Television Users and Stations. The Public Interest Advocacy Centre dismissed the level as “arbitrary.” Anthem Sports and Entertainment was among the groups calling for the adoption of the $10 million limit. The Canada Media Fund echoed this position as did Unifor, the union representing media workers. Rogers Communications Inc. endorsed the rate but does not think it will remain static. “Rogers does not oppose using it as the exemption threshold.... However, we believe a higher threshold will likely be necessary when the commission considers whether an online undertaking should be subject to a new contribution framework,” the telecom stated. The Documentary Organization of Canada said it could not comment because there is no transparency in the revenues of online platforms operating in Canada. The Writers Guild of Canada took the same approach. Accessible Media Inc. said it would be behind the eight-ball if the new proposals were adopted. Its online presence generates effectively no revenues but its broadcasting section does exceed the $10 million limit. “AMI would have to register its online undertakings and potentially be subject to obligations, including increased licence fees,” the company said. – Reporting by Paul Park at ppark@thewirereport.ca with files and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Change financial threshold for Online Streaming Act exemptions, CRTC told

Broadcast | June 15, 2023

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Change financial threshold for Online Streaming Act exemptions, CRTC told

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