Broadcasting policies need major overhaul

Companies must be given the tools to compete with foreign giants and freed to grow, Doug Murphy argues.

Canadians are enjoying more and more content in more and more places. All of us effectively have a TV in our pocket. As one of Canada’s largest broadcasters, Corus’s ambition is to connect audiences with world-class stories, brands and talent wherever they are.

Canadian broadcasting policy was written for an era of closed borders, one where television and radio broadcasters had a relative monopoly over audiences, and governments had a role to play as gatekeepers. That era is over. The policies that once supported and protected Canadian voices now risk restraining them, and need to change. If they do not, the future of Canadian media is in peril.

We know Canadians want flexibility, variety and access to great quality content. They want to tune in each night to hear what happened in their community that day. They want to watch home renovation shows filmed in their neighbourhoods and hear news about Hollywood celebrities and world leaders from a Canadian perspective.

Private broadcasters like Corus are the backbone of the Canadian content and media sector. But we face many challenges. Today, there are virtually no barriers to entry into our industry. Many massive, foreign, internet-based media and content companies have unfettered access to our market, with more on the way. These international companies are fragmenting audiences, intensifying competition for programming, viewers, and advertising, while diverting revenues out of Canada.

These international companies generally do not collect Canadian sales taxes nor do they contribute to the Canadian content ecosystem. Corus is required to spend 30 per cent of its annual broadcast revenues on Canadian programming. Netflix and others are required to spend nothing.

This situation is unsustainable and is the key issue underlying the latest review of Canadian broadcasting legislation. Encouragingly, Canadian Heritage Minister Pablo Rodriguez recently promised to take action.

Here is what we believe must be done. First, access to Canadian audiences comes at a price, and everyone must pay — no exceptions. Secondly, the outdated rules that restrict Canadian media company operations, strategies and ability to grow must change.

All who benefit from the Canadian system should contribute to that system. Not only must foreign digital media companies share responsibility for supporting Canadian content, Canadian media companies must be better positioned to compete with them. This is about so much more than “taxing Netflix”; it must also be about clearing the way for strong Canadian companies.

In order to compete with multibillion-dollar — even trillion-dollar — foreign internet giants, Canadian media companies need enough scale to finance increasingly expensive programming and the freedom to make the types of shows audiences want to watch. Unfortunately, that is not possible today, not because we don’t aspire to do so, but because it is expressly forbidden.

Canadian broadcasting policy still regulates the type of content we can make, where we can get it from, and when we can broadcast it. To my knowledge, no other country’s regulatory and funding mechanisms are designed specifically to limit their home broadcasters from producing programming they can own outright and export internationally.

I am unaware of another Canadian business sector with this level of government intervention, or another sector of Canadian businesses rendered as uncompetitive by regulation. In an industry where size matters, our policies leave Canadian companies sub-scale. To my knowledge, no other Canadian businesses are required to pay a 10-per-cent tax on domestic ownership transactions when there is a change of control. Nor do other countries render levies to discourage their media companies from building scale to compete with the likes of Netflix, Google, Amazon and others.

We are eager to evolve with the times, grow our business and reinvest in Canada. We are doing what we can, but Canadian broadcasting policy must let us do more.

The future of Canadian media, and the stories, brands and talent it supports, literally depends on it.

Doug Murphy is president and CEO of Corus Entertainment