SiriusXM latest broadcaster denied relief from the CRTC

The CRTC denied SiriusXM Canada Inc.’s request for relief from its Canadian content development (CCD) contributions on the grounds that in-person cultural events have “largely recovered” since Spring 2022, and, alternatively, it can make its discretionary contributions to independent funds rather than withhold them. “The commission is of the view that, while SiriusXM’s business model has been impacted differently than that of commercial radio in the years in question, SiriusXM was unable to demonstrate that this impact was more severe than that of the commercial radio industry,” the CRTC wrote in its Tuesday decision. In August 2021, the commission denied an application by the Canadian Association of Broadcasters (CAB) to waive conditions of licence and regulations relating to broadcasters’ expenditures for the 2020 broadcast year, opting instead for an extended payment approach. Radio licensees were allowed to pay 50 per cent of their incurred CCD shortfalls at the end of August the following year and the remaining 50 per cent August 2023. In October, SiriusXM requested relief for its 2020-2021 CCD contributions due to the financial impacts of the COVID-19 pandemic. The satellite radio company proposed to pay 50 per cent of its CCD shortfalls by August 2024 and the remainder by August 2025. SiriusXM argued that “due to the pandemic, live events were canceled, postponed, scaled down in size, or switched to virtual events. In many cases, this resulted in lower budgetary requirements, which made the full payment of CCD contributions difficult.” According to its condition of licence, SiriusXM must contribute at least four per cent of gross revenues from its satellite subscription radio undertakings to eligible initiatives for Canadian content development. Of those funds, at least 22 per cent must be allocated to FACTOR, 12 per cent to Musicaction, and at least six per cent to the Community Radio Fund of Canada. Other eligible initiatives receive the remaining discretionary contributions. Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) took issue with SiriusXM’s request, arguing in an intervention to the CRTC that cultural events had largely recovered by Spring 2022. Alternatively, SiriusXM can dole out any outstanding contributions from the discretionary fund to FACTOR or Musicaction, ADISQ further noted. “Those funds have advanced knowledge of their clients’ needs and therefore have all the necessary expertise to administer funds effectively,” ADISQ argued, according to the CRTC’s decision. SiriusXM maintained that it faces financial hardships due to declines in new vehicle sales. The company argued that its subscription revenues are directly tied to new car sales because it offers a limited-time free subscribership to new car buyers. Supply chain disruptions resulting in inventory shortages, remote work, and inflation have contributed to a decline in vehicle sales and the time people spend in their cars, SiriusXM told the CRTC. The commission recognized that SiriusXM’s subscription-based business model differs from the advertising-based model but was still “not convinced that these differences have impacted its revenues in the way that SiriusXM suggests.” “The commission notes that total revenues for the commercial radio industry declined by 26.2 per cent between the 2018-2019 and 2020-2021 broadcast years… SiriusXM, on the other hand, has enjoyed more stability in revenue and, consequently, has not seen similar declines in profitability,” the CRTC wrote. SiriusXM is not the only broadcaster demanding relief from the CRTC. Last year the CRTC denied an application by Stingray Group Inc. to alter the amount of tangible benefits payable for the 2019-2020 and 2020-2021 broadcast years. More recently, Corus Entertainment Inc. called on the CRTC to reduce its Programs of National Interest contributions and its Canadian Programming Expenditure requirements while discontinuing its obligation to contribute to the FACTOR and Musicaction funds. Corus saw job cuts in March, and for similar reasons, BCE Inc. recently laid off 1,300 employees, as did Quebecor in February, which cut 240 positions, mainly at Groupe TVA Inc. This month, the latter announced that it would end its CRTC-mandated weekend newscasts in Quebec City while simultaneously requesting the CRTC list specific investment requirements and local programming obligations. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

SiriusXM latest broadcaster denied relief from the CRTC

Broadcast | June 20, 2023

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SiriusXM latest broadcaster denied relief from the CRTC

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