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Supposedly that makes me an evangelist? Well in the right context, I would tend to agree. Recently, I read a blog post by public relations guru and author of Putting the Public Back in Public Relations Brian Solis where he cites a Forrester Research report that indicates more money is being spent online than with traditional advertising.

In some ways, the report offers some vindication to me that I chose the right industry and profession. From the chart above, Forrester is predicting that search marketing will continue to lead in spending through the next five years followed by display advertising. My take on the data? It started with the website. Once someone had one, everyone wanted one so then agencies specialized in creating awesome and dynamic websites, heralding in the Web 1.

Historically, Canada has been treated as a separate market for program rights. Footnote These distinct Canadian rights have played, and continue to play, an important role in sustaining the Canadian broadcasting system. The evolution and continued availability of program rights for Canadian broadcasters are important to the health of the Canadian broadcasting system. Technological evolution has introduced new platforms on which content can be delivered. The number of platforms and delivery option. Negotiations typically involve discussions over which platform, when, and how many times a program will be broadcast, as well as the broadcast region and language.

When negotiating for rights, parties try to establish the optimal combination of platforms, the level of exclusivity and the timing of each exhibition window. With the growing amount of professionally produced programming available online, the digital program rights market is becoming more defined and established as business models evolve.


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The rising popularity of Internet-delivered programming will increase competition among OTT providers—including new online-only entrants and traditional broadcasters that own portals—for quality programming that attracts both subscribers and advertisers. Footnote The initial uncertainty surrounding these business models has caused a lag in the evolution of the digital rights market, particularly in the area of the valuation of digital rights, as indicated in a study completed by the Canadian Media Production Association CMPA. In its study on the marketplace for digital rights, the CMPA noted that producers consider the digital rights associated with their linear content to be grossly undervalued in the market.

Footnote This study, however, was completed before the conclusion of a terms—of-trade agreement between Astral Media Inc. Digital media rights formed a large part of the negotiation, particularly the question of the revenues derived from distribution on new platforms and international sales. While other terms-of-trade agreements are still under negotiation, the conclusion of this agreement may be among the factors that increase the value of digital rights.

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The introduction of OTT services is changing the traditional broadcasting market. As catch-up Internet TV continues to grow, exhibition windows are getting shorter. Catch-up programming is being made available within hours or days of original TV broadcasts. This short lag is popular among consumers. Different revenue-maximizing models that adjust the timing of these windows and their duration are changing as consumer media consumption trends evolve.

Social media advertising spending in the United Kingdom (UK) from 2011 to 2017 (in billion GBP)

Most commonly, Canadian broadcasters have purchased Canadian program rights through packages that include both the linear and digital rights spanning the relevant language market at the national level. It is possible that content owners often US broadcasters that own studios could grant non-exclusive Canadian digital rights to Canadian broadcasters and non-Canadian content providers, or exercise these rights themselves.

Canadian broadcasters understand the value in keeping the linear and digital rights bundled. However, because the online distribution of content is in the early stages of developing its own stand-alone business model, and because consumers are interested in this content, the incremental value for digital rights may rise. This may signal increases in the overall value of the package of rights as there are more windows of exploitation.

The digital economy provides new opportunities for content producers. According to the CMPA , Footnote Canadian content producers are increasingly using alternative distribution platforms and multi-platform distribution strategies. Footnote Multimedia production and the distribution of Canadian TV programs across multiple platforms is increasingly prevalent. During this period, the number of projects supported by the fund rose from 30 to Footnote Also, between and , the number of Internet broadcast rights sought by Canadian distributors of CMF -supported programming increased from 4 to Footnote While the number of multimedia projects for mobile devices is still low, this is not the case for video games, the biggest recipients of funding under the aforementioned program.

As mentioned in the Navigating Convergence report, fragmentation continues to challenge the ongoing viability of the Canadian broadcasting industry at its current levels of expenditure and diversity. Furthermore, stakeholders have raised the spectre of bypassing the Canadian system. Canadian-owned conventional and specialty services depend on the existing rights market divided into territories to purchase popular foreign programming with which they may exclusively serve Canadian audiences.

There have been recent isolated incidences of foreign OTT services purchasing rights to serve Canadians. Were this to become a trend, Canadian broadcasters would be further affected by fragmentation—a situation that could be amplified if it led to further cord-cutting or cord-shaving. In recent months, discussions by stakeholders and citizens on the future of Canadian content in a digital environment, as well as concerns about the impact that greater consumption of digital content will have on communication networks, have become more urgent.

The regulatory treatment of technologies that underlie the emergence of online video bear careful consideration. The evolution of cloud-based services, which include services such as OTT video, depends on the efficient operation of communication networks. Similarly, the economic Internet traffic-management practices of ISP s may influence the abilities of users to adopt new services and of content providers to create new services.

It is critical that the regulatory environment allow for those innovations to take place, while balancing the needs of network operators to manage their networks and experiment with their own innovative new services. The rate at which online content sources can be substituted for traditional sources is accelerating. The entry of several Internet-based video services into the Canadian marketplace has focused stakeholder attention on the evolution of and regulatory supports for Canadian content in a digital environment. Some stakeholders have raised concerns as to whether increasing consumption of audiovisual and audio content from unregulated sources may be detrimental to Canadian content creation and exhibition.

Service providers have suggested that increased network traffic associated with greater video consumption will require additional investment in infrastructure capacity without compensation from unregulated entities, which are mainly responsible for the increase. Others indicate that these new distribution platforms provide an additional avenue for the delivery of Canadian content.

Creators of Canadian content may leverage the Internet to exhibit their works around the globe. There appears to be support for the use of ex post enforcement tools, which could include the imposition of administrative monetary penalties AMPs by the Commission to enable this evolution to continue. Stakeholders appear to increasingly support the notion that restrictive regulation and the imposition of obligations will become less effective means of achieving policy goals. It is difficult to control access to content that bypasses the traditional pathways of the regulated broadcasting system i.

Direct access to content provided by exempt services operating in Canada may impact the traditional domestic broadcasting industry, which warrants consideration of further regulatory flexibility. There is, however, no blanket support among stakeholders for a reduction in all forms of regulation.

Some stakeholders have expressed that specific elements of the broadcasting system that provide, for example, a diversity of voices, may require the continued protection of ex ante regulation in an environment that is increasingly consolidated, global and marked by greater participation by competing exempt entities.

Independent broadcasters have generally expressed broad support for ex ante regulation.

Entities associated with the broadcasting industry service providers, creators, distributors and broadcasters have expressed a desire for a level playing field with respect to content obligations. There does not appear to be a consensus, however, on how this could be accomplished. Creator groups, for instance, have suggested that a level playing field could be established through the extension of traditional obligations to exempt entities, particularly foreign ones.

Some distributors, on the other hand, have pointed to the flexibility enjoyed by exempt entities as an advantage and argued for a more permissive regulatory environment for everyone. These distributors argued for reductions in required levels of Canadian spending or contribution to programming funds, as well as eased BDU packaging and VOD content rules. Requirements to buy and broadcast Canadian programming have served as important sources of support for Canadian content in the private system. Footnote Most BDU s are required to contribute 6. Footnote If BDU revenues are reduced as a result of competition and audience fragmentation, it may be necessary to find new mechanisms to support Canadian content.

Observers have raised several scenarios in which contributions could be reduced.


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  5. If Canadians were to reduce the number of discretionary services to which they subscribe or to unsubscribe from BDU services altogether in favour of viewing and acquiring content online from OTT services, unauthorized file-sharing sites, or newly-available HD OTA conventional services, there could be a reduction in revenues, the basis for subsidy contribution. In addition, in an increasingly on-demand world, the effectiveness of linear exhibition requirements for programmers that drive the purchase of multiple Canadian titles to fill programming slots may be reduced.

    While expenditures might be kept proportionate to revenues, there could be a reduction in the diversity and number of titles purchased or buyers of new titles to satisfy those exhibition rules.

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    The role of independent producers operating outside of large vertically integrated organizations could be affected. In an on-demand world, consumers actively seek content, thus creating awareness of content through various means can be critical to the success of programming. Canadian network broadcasters promote, to varying degrees, the Canadian content they broadcast. OTT providers, however, particularly those from foreign jurisdictions, may have limited incentive to promote Canadian content. For example, the effective use of social media tools could provide low-cost ways to promote domestic content.

    The dynamics of the audio and audiovisual marketplaces are different, in part based on fundamentally different copyright frameworks. While the weight of stakeholder preoccupations tends toward discussion of audiovisual markets over audio, the same potential for bypass and disruptive effects of fragmentation exists in both.

    As the discussion on Internet radio has made clear, there is increasing consumption of programming from Internet sources. This consumption has tended to be from licensed radio services, which currently contribute to Canadian content development funds and adhere to prescribed Canadian content levels. Foreign OTT services have not made significant in-roads in Canada for a variety of reasons. It will bear monitoring, however, to understand whether this situation will change.

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    A movement by audiences to pure-play Web radio services has the potential to reduce revenues in the licensed system, with generally the same impacts that would occur under the same scenarios in audiovisual markets: lower advertising revenue resulting in fewer funds available for the creation and presentation of Canadian content, and reduced effectiveness of Canadian content rules. The creation and promotion of Canadian programming, including audio programming, will be best achieved through a holistic approach that involves various government departments and agencies including the Commission as well as market forces.

    Various stakeholders have identified opportunities outside the regulated system to support Canadian content, such as tax credits, which include production tax credits, changes to the Income Tax Act to encourage Canadian advertisers to spend advertising dollars in Canada, co-productions and direct subsidies. With respect to audio programming, suggestions have also been made by stakeholders that the copyright regime might be better optimized to provide domestic licensees the opportunity to develop their own innovative online services.

    However, audience levels for traditional TV remain high, and migration appears to be occurring mainly from conventional TV stations to specialty services, Footnote with little migration evident in the radio sphere or likely in the near-term.

    Navigating Convergence: Charting Canadian Communications Change and Regulatory Implications

    Most Canadians have eagerly adopted digital devices, products and services. They are creating and consuming increasing amounts of programming over faster Internet connections, negotiating competitive bundles of communications services, unlocking their smartphones, using set-top boxes to access the Internet or navigate rich electronic program guides, and using cloud services to store digital content they have created and purchased. They are also informed and influential industry watchers who leverage social media to provide instant, highly public feedback on a wide range of issues.

    Other consumers are less plugged into the digital environment. Canadians with low digital literacy skills will be challenged to fully participate in the digital economy and will face impediments to engagement in an increasingly digital society. Canadians with disabilities, older Canadians, new Canadians, and those living in poverty or in rural and remote areas may also face barriers.