Online streamers should direct 2% of Canadian revenues to local content: Rogers

Online streaming giants should be forced to contribute two per cent of their annual Canadian revenue to support Canadian and Indigenous content and help level the playing field for local broadcasters, executives from Rogers Communications Inc. told a CRTC hearing Tuesday.

The Toronto-based media and telecommunications company said Rogers and its Canadian competitors are being held back by a “kind of oppressive” regulatory structure that doesn’t apply the same rules to newer digital companies which have disrupted the industry.

In the short-term, it urged the commission to establish a temporary news fund to help subsidize private TV and radio news stations using 30 per cent of the contributions it wants those online services to make.

“We operate in a heavy … regulatory environment on news,” Rogers Sports and Media president Colette Watson said.

“It’s really difficult to keep planning for the future when we’re stuck in 1995 with a framework.”

The company’s presentation came in the second week of the federal broadcasting regulator’s public consultations in response to the Online Streaming Act, which received royal assent in April.

It is meant to update federal legislation to require digital platforms such as Netflix, YouTube and TikTok to contribute to and promote Canadian content.

The commission is exploring whether streaming services should be asked to make an initial contribution to the Canadian content system and if this would help provide equal footing for local companies, which are already required to support Canadian content.

Dean Shaikh, Rogers senior vice-president of regulatory affairs, said the company is losing subscribers and audiences to online competitors.

“The outcome we want here is that we can compete with online streamers,” he told commission panellists.

“We’re not looking for protections, we’re looking for the same flexibility that might be provided to the online streamers.”

He said Ottawa’s passage of the Online Streaming Act, and the law’s implementation being hammered out by the regulator, “presents a long overdue path to modernizing Canada’s broadcasting regulatory framework.”

“Our proposal is premised on the clear expectation that the commission will take meaningful steps to lighten Canadian ownership groups’ direct financial obligations,” Shaikh said.

“It is no longer fair or sustainable for Canada’s broadcasting industry to be the primary source of funding for all stakeholders in the system.”

Rogers’ proposed two per cent contribution would apply to “foreign and unaffiliated Canadian online undertakings that are having a material impact on the Canadian broadcasting system.” It defined those as online video and audio streamers making at least $50 million and $25 million, respectively, in annual Canadian revenues.

The company clarified it’s not looking for any mandated contribution to apply to social media creators, but rather the platforms hosting them.

Shaikh also said Rogers is not necessarily hoping the CRTC’s review will result in “hundreds of millions of dollars in new direct subsidized funding of Canadian content production.” While he said that’s not an area of crisis for the company, its local news division is in a more dire situation.

“The importance of local news cannot be overstated,” he told the commission.

“Not only is it critical to our democracy, but it actually is a key differentiator between the traditional system and the online system. It’s one of the things that we hope will keep Canadians within the system.”

That echoed a presentation last week by Bell Media-owner BCE Inc., which also called for the CRTC to create a news fund providing money to broadcasters through contributions from foreign streamers.

Last month, Rogers closed its CityNews Ottawa radio station and laid off newsroom staff, citing dwindling audiences and regulatory challenges.

The CRTC hearing, which is expected to take three weeks, is set to hear from companies such as Spotify, Netflix and Amazon in the coming days.

This report by The Canadian Press was first published Nov. 28, 2023.

Companies in this story: (TSX:RCI.B)

Sammy Hudes, The Canadian Press