Tom Pentefountas at the « Culture et médias au défi de l’attention » conference

septembre 21, 2015

Paris, France

September 21, 2015

Tom Pentefountas, Vice Chairman, Broadcasting

Canadian Radio-television and Telecommunications Commission (CRTC)

Check against delivery

I would like to thank our hosts for welcoming us to a city so rich in history and culture and among people as interesting as they are passionate about the challenges posed by the new realities in the world of culture and media.

It is never easy to follow so many excellent presentations. But allow me to add a few words on behalf of the Canadian Radio-television and Telecommunications Commission—better known back home as the CRTC—at the close of this excellent day of meetings and exchange.

The CRTC must address the same new challenges faced by all of the organizations and institutions represented here today.

One of those challenges is definitely that of the viewer’s attention which, with the vast range of electronic devices and content available to viewers, has become increasingly difficult to capture. I’ll come back to this later.

Faced with these new challenges, the CRTC’s primary mandate has not changed. We monitor broadcasting and telecommunications in Canada to ensure that they meet the needs and interests of Canadians. We want to ensure all Canadians have access to a world-class communication system that promotes innovation and enriches their lives.

To that end, we regularly hold public hearings and consultations. Whether through social media, by telephone or email, or at hearings, we listen to Canadians to learn about their needs, tastes and habits. What have changed, however, are the market realities.

The new television age

The emergence of new technologies has brought about major changes in viewer’s habits. More than ever, they control and customize their television content. Traditional television no longer holds a monopoly on information and entertainment.

Broadcasters and creators must find new ways to bring content to viewers as they move away from appointment-based viewing and towards on-demand consumption.

Take, for example, Netflix, which arrived here in France last year. Many see this digital television service as a fierce competitor that is difficult to fight. Rather, we should see this service’s entrance in the arena as an incentive to do better and be more open to new market trends.

This is no longer the time for control and regulation. We have entered the era of promotion. The role of regulators is not to place barriers, nor to protect business models. Rather, regulators need to be responsive to citizens.

“Let’s Talk TV”

The CRTC was innovative in this respect when it launched, in October 2013, the public consultation called “Let’s Talk TV: A conversation with Canadians” to find out what Canadians thought of the programs offered and how they receive them, as well as whether they have enough information to make informed choices.

Through a number of innovative approaches including interactive surveys and social media, over 13,000 Canadians actively participated, enabling the CRTC to make decisions to the great benefit of Canadian consumers, creators and citizens.

The CRTC firmly believes that the Canadian broadcasting system must prioritize competition, innovation and promotion if it is to be successful in this age of abundance, where content is king and the viewer is emperor.  

The CRTC’s goal is to change how creators and distributors bring content to Canadians, and to encourage them to use innovation and creativity to meet the diverse needs and interests of their audiences, both in Canada and abroad. We want them to see change as an opportunity to be seized, not an obstacle to be overcome.

The Canadian system has created a favourable environment for producing high-quality content that can travel the world over. We have the talent to do it. The CRTC is putting in place a springboard for conquering audiences around the world.

In this sense, we have evolved by encouraging producers and creators to produce less but produce better. To do so, we reduced the quotas for the overall number of Canadian programs that television services must broadcast and focused on evening prime time where revenues can be maximized. That being said, we have maintained spending requirements for content produced by Canadians.

This way, we reduce program repetition on the same channel and the recycling of programs from other channels, while promoting the consumption and production of compelling, high-quality content. The concept of television quotas is highly anachronistic in a world of choice.

Thus, we would like to encourage a virtuous cycle that generates investments to create high-quality programs, so that Canadians watch content made by Canada because they want to, not because it is forced upon them. 

The CRTC continued to innovate by announcing two projects to promote large-scale Canadian productions. One is aimed at adapting Canadian best-sellers, and the other is aimed at dramatic series produced at a cost of $2 million per hour. 

These are just a few steps in the right direction. More will need to be taken.

In the world of 2015, protectionist measures no longer work. We see it the world over, with the elimination of trade barriers between countries. The future of audiovisual content will not be built by erecting walls that will be ineffectual in the face of technologies focused on free movement.

We need to focus on conquering international audiences. Ignoring these new realities would be irresponsible.

We can also come together to create compelling, quality programming that is relevant to the Francophone community and offer it in a market that no longer has borders.

To do this, we need to further explore opportunities for co-productions or joint ventures. Canada has some of the top writers, actors, directors and producers in their fields. It is an industry rich in talent and ready to compete on the world stage. The recent successes of Canadian filmmakers Denis Villeneuve, Xavier Dolan, Philippe Falardeau and Jean-Marc Vallée are living proof.

The advertising challenge

Although the market no longer has borders, it now faces an advertising shift. Despite a 2.3% increase in investment by private local television stations in 2014, local advertising revenue decreased by 5%. Private local television stations also saw a 7.8% decline in national advertising revenues.

Where is that revenue going? Simple: to online and mobile advertising. The fact is that advertising is moving increasingly towards new technologies and new, more connected audiences.

According to a study sponsored by Interactive Advertising Bureau of Canada, online and mobile advertising revenues increased by 14% between 2012 and 2013. Experts predict that this increase will continue in the future. Moreover, it is estimated that revenues derived from mobile apps will reach $3.3 billion in 2017 and $5.2 billion in 2019.

This fragmentation of audiences need not necessarily result in a drop in advertising revenue. On the contrary, new technologies make it possible for the industry to know a great deal about its audiences and thus to better focus its resources.

I am thinking, for example, of ad insertion technology, which allows advertisers to target particular household audiences according to age, revenue and other demographic factors.

Imagine a viewer who is looking to buy a Peugeot 307 today. Imagine the value of that viewer for an advertiser.

A well targeted viewer has much more value than a random, non-targeted viewer. For example, 100 targeted viewers, subdivided into groups of 10 can be the equivalent of 1,000 viewers reached randomly and unexpectedly.

We should therefore not be discouraged by a potential decline in audiences. Rather, we need to use other tools available to us, such as those used by the digital competition to better monetize audiences.

Set-top boxes

Furthermore, in a system where 30% of advertising revenue is reinvested in content created by Canadians, we have a responsibility to maximize audience measurement.

In Canada, traditional television advertising revenue is still dependent on ratings. The audience measurement system established in the 1950s worked very well in the world of four TV channels. But with the fragmented audiences of today’s age of abundance, that system is ineffective.

Knowing who watches what is vital, since advertising revenue depends on it. Precise measurement enables monetization, which means revenue that we can reinvest in content, which means jobs in the creative field. I firmly believe that a country’s prosperity is intimately linked to creative endeavours. It is not only question of culture, but also an economic one.

We therefore required that the industry put together a working group to explore a system of measurement in Canada using STBs. Since such a system would enable all distributors and programmers to have access to this data, the industry could be better able to compete with digital platforms, which are rich in data, and better monetize its audiences.

That said, we have clearly indicated that respect for individual privacy, the collection of personal information and viewer consent are paramount considerations.

The world of radio

These new realities of the world of television also apply to radio. I am thinking, in particular, of Internet radio and streaming services, which present challenges for the music industry.

Very recently, we launched a proceeding to ensure that French-language music is better supported in the current digital environment. We also want listeners of French-language music to have access to programming that reflects their needs, interests and culture.

We will hold a public hearing later this fall to find innovative ideas and solutions that will help us, as a Francophone society, to better promote and produce French-language music.

The attention challenge

We also need to adapt to the fact that viewers’ and listeners’ attention has turned towards a variety of platforms and devices. Today, two-thirds of Canadians own a smartphone, more than 40% a tablet and one-third a smart TV. We know that these numbers are trending up year after year.

Multitasking, such as watching TV or listening to music while looking up a Web page, has become the norm in today’s society. In Canada, 55% of Canadians watch television and another screen simultaneously, while half of the population works with two screens at the same time. This is quite a challenge when it comes to capturing someone’s attention.

Sure, Canadians still spend an average of 28 hours a week watching traditional televisions. But they do it differently: they watch a program, the news or a sports event while reading their tablet or Facebook or replying to text messages.

How do we capture the attention of viewers who have become content bulimics? How can we help them find what they’re looking for and what interests them?  Through discoverability…

Discoverability

Allow me this neologism, which we propose to adopt at the CRTC to describe the concept of content discovery and promotion.

We live in a world of choices, where content is everywhere. Today’s audiovisual world has exploded into hundreds of TV channels and countless online options such as Netflix, Tou.tv and YouTube, which viewers can access from any device anywhere and at any time.

The daily dilemma faced by viewers is no longer “what’s on?” but “what should I watch?” What interests viewers? What motivates them to select a certain channel or watch a certain program or series? 

That is what we invite you to discover with us at the Discoverability Summit that we are organizing.

Experts from various fields will be in attendance to discuss such topics as the consumption habits of listeners, viewers and Internet users.

The CRTC wants to help unleash new ideas by starting the conversations in the fall. The Summit, as well as the preliminary discussions, will be opportunities to bring together key creators and thinkers in the industry, and government and university representatives from Canada and around the world. All will take part in addressing the discovery challenge. 

Our goal is to create a spark that will produce new ideas, new tools and new business models that will help resolve this fundamental challenge. And, as you know, that challenge is not uniquely Canadian—it’s a global challenge.

Thank you for your attention.

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