CBC Music: New Service Faces Budget Cuts, Royalty Fights, CanCon Squabbles

Today the Canadian federal government announced it will be cutting 10 percent of its $1.16 billion funding to the Canadian Broadcast Company (CBC) over the next three years. These cuts will no doubt have a tremendous affect on the CBC's recently launched and much talked about online music service, CBC Music.

Since launching CBC Music last month, the public broadcaster's new online radio site has served up over three million hours of music from 40 genre-based streams to about 650,000 listeners.

It has also been serving up some controversy.

The publishing side of the music industry has begun to revolt against the CBC and demand more royalties. CBC currently pays a flat fee to organizations like the Society of Composers, Authors and Music Publishers of Canada (SOCAN). SOCAN, however, doesn't see this as fair payment anymore because, as the Globe and Mail reported, "nobody envisioned a constant stream of free music flooding the internet."

"The key," SOCAN spokesperson Paul Spurgeon told the Globe, "is whether CBC is paying their fair share."

SOCAN's concern is that while commercial radio and competing online services pay on a per-song basis, CBC pays a flat rate. But all this leads to another question about royalties -- it's not just about how much is paid, but also who gets it.

Unlike the site's terrestrial radio cousins, there are no Canadian Content laws -- intended to guarantee exposure and income for Canadian musicians -- governing the internet. That means there's no legal requirement for CBC Music to play at least 35 percent domestic tunes online, and therefore no requirement to direct that percentage of overall royalties to the Canadian music industry. This is true even though CBC Music uses tax dollars for its royalty payments.

While stations like CBC Radio 3 are 100 percent CanCon and genre streams like singer-songwriter and composer feature largely Canadian playlists, some of the 40 stations are playing less CanCon than what would be mandated on traditional radio.

CBC spokesperson Steve Pratt explains that this is the case for streams like classic blues, because there isn't enough Canadian music to serve the channel.

"CanCon varies widely but the goal, overall, is to give significant exposure to Canadian Content," Pratt tells Spinner. "We're hoping that, regardless of the stream, supplementing features like editorial content and alternative streams will drive the Canadian content."

CBC Radio's mandate is to be "be predominantly and distinctively Canadian." Of course, the Broadcasting Act was written in 1991, several years before the World Wide Web was widely used. In the wild west of modern online music streaming it's unclear how those rules still apply. Still, as a company funded by Canadian taxpayers, a service like CBC Music bears certain responsibilities. Whether the corporation should adhere to CanCon quotas for online music is, debatably, one of them.

"The problem is that the issue of CanCon has become extremely political," says Alan Cross, radio personality and host of the Secret History of Rock. "Now, what we have are organizations lobbying the CRTC and other organizations for more support and more money so they can lobby for more support and more money. That didn't fly.

"Right now, it [CanCon] is at 35 per cent and anybody applying for a new radio station license is promising 40 per cent. That seems like an awful lot."

"Not everything the CBC chooses to play needs to originate within the borders to be relevant to Canadian culture," says Paul Banwatt. Banwatt is familiar with CBC and CanCon rules both as a student at law and as the drummer for the Rural Alberta Advantage. "The Broadcasting Act does a beautiful job of spelling out the priorities of a public broadcaster. Even if there is no required percentage of Canadian content specified I think the 'predominately and distinctively Canadian' mandate should always apply to the CBC."

Even without a standardized percentage for all the online streams, Pratt assures listeners that CBC Music is promoting Canadian music even more with its new interface.

"We come at everything with a Canadian perspective and the focus is much more heavily Canadian than it would be on most surfaces," he says.

Banwatt concurs, adding that Canadian artists such as himself "would tell you how important the CBC has been for their careers, as both an artist and listener. I believe CBC Music exists to fulfill the role of the CBC as defined by the Broadcasting Act and I think that's an important role."

Cross agrees that it's in CBC's charter to promote Canadian culture and it's pretty much impossible for the organization to not support Canadian music.

"They're not the issue," Cross says of the CBC when it comes to whether they should be governed by CanCon regulations online. "They may want to cut some corners every once in a while, but they won't, they can't. It'll never fly because the moment they try to do that their funding will get cut like you won't believe."

Although not directly related to the bouts between the music industry and CBC Music, today's federal budget cut announcements will inevitably make an impact on this. Heritage Minister James Moore cutting more away than $100 million is a nightmare for the company.

How this will affect the current conflicts regarding CBC Music is unclear at the moment, but CBC's executive director of radio and audio, Chris Boyce did tell the Globe the following: "We do find ourselves in different position than a private broadcaster because the kinds of question I'm asking don't necessarily depend on profit margins. At the same time, we need to look at building a sustainable business here. We need to look for revenue."

Pratt, meanwhile, goes on to detail the importance of creating communities amongst fans of particular genres, saying that the new genre-specific online forums will help cultivate a strong community that'll unite listeners and promote Canadian content at the same time.

Citing all-Canadian Radio 3 as an example of "something no one else in this business would ever dare attempt," Michael Barclay, music journalist and author of CanRock history book Have Not Been the Same, says, "I'm more than willing to cut the corporation some slack when it comes to programming a blues or metal or jazz stream on CBC Music."

But if CBC Music is sidestepping the strict requirements of traditional CanCon, does that mean CanCon as a concept no longer matters? Barclay would argue maybe it doesn't.

"Consumers have all the choice," he notes. "In 1971, there really was no choice. CanCon was important 40 years ago, it continued to be important up to 10 years ago and was still relevant five years ago. But now, I don't know."

"CanCon, more generally, is less relevant today," agrees Internet law expert Michael Geist. "There is now unlimited choice for consumers and a global market for Canadian artists to pursue. The challenge is no longer about obtaining preferential placemen on a dial that has no end but rather to find ways to be heard and find and audience."

Not everyone agrees, of course. "As an artist, I will say that if CanCon ever mattered, I think it does more now than ever," Banwatt rebuts. "The whole point of CanCon is the recognition that we're a small population and we want to make sure that our voices, with distinctly Canadian things to say, aren't drowned out. Cultural expression crosses borders more easily now than ever, so you would think the need for protection is at its height."