Declining TV revenues caused by a growing shift in viewing habits as well as new broadcast rules could result in major job losses for broadcasting stations by 2020, a report submitted to Canadian Radio-television and Telecommunications Commission (CRTC) warned.
According to the 100-page report, some 7,000 jobs in the industry and about $400 million in funding for Canadian programs could be lost.
“In our view, the most likely scenario over the short to mid-term is a material, but not fatal, erosion of traditional television,” the report prepared by consulting firm Nordicity and communications lawyer Peter Miller, said. “It is driven primarily by millennials, infrequent TV viewers, and non-sports/TV news watchers.”
But the report also laid blame on new CRTC regulations.
The report was commissioned by the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), Canadian Media Guild Directors of Canada, Friends of Canadian Broadcasting and Union for Canada (Unifor).
The report said these viewers are the “most motivated to abandon what it called broadcast distributed undertakings (BDU) and instead adopt a combination of BDU, over-the-air (OTA) TV broadcast and video content over the Internet which is also called over-the-top (OTT) content.
The report was given to the CRTC ahead of its public hearings on the viability of local TV which starts today. According to the authors, it is intended as a third party assessment of the challenges facing Canadian television in the light of CRTC decisions made following the Let’s Talk TV (LTTV) hearings in 2014.
Recent changes to CRTC regulations could cause a further decline in TV revenues. For instance, the report said, the unbundling of TV packages ad putting a cap on basic services could bode ill for the industry.
Starting March 1, the government is requiring cable and satellite TV service providers to offer their customers basic service capped at $25/month as well as pick-and-pay programming choices. This unbundling may result in savings for consumers but will also reduce revenues for providers and cut contributions to Canadian programming as well.
“Without broadcast regulation and Canadian ownership requirements, spending on Canadian programming could be less than a third of what it is today,” the report said.
The report also said “undue preference” to and the introduction of hybrid OTT exemption orders has “encouraged, if not required” new Canadian OTT services to be offered to Canadians.
“Shomi and Crave TV will, under the LTTV framework, be transformed from ‘complimentary’ to ‘competitive’ OTT offerings and are thereby expected to materially increase cord cutting and cord shaving and the take-up of OTT in Canada from the baseline outlook,” the report said.
The LTTV decision will likely result in a $970 million decrease in revenues at Canadian specialty and pay services, or 23 per cent of their forecast baseline revenue in 2020, the report said.