Also in this report:

* WCB uses radio to make impression: Safety promotion on local rock station targeted young workers p.30

* Stern gives medium needed shot in the arm p.32

* MobilTrak gets T.O. trial: New measurement system scans frequencies of passing cars p.33

Has the rebirth of radio begun?

The Canadian Radio-television and Telecommunications Commission has launched a major review of its policies for all sectors of the radio industry – a process that broadcasters are hoping will help usher in a new and more profitable era for the medium.

The crtc has already received written submissions from the industry, and will be starting public hearings on Dec. 1.

Lise Plouffe, senior communications officer for the crtc, says the review is timely, as the industry struggles to adapt to new developments such as the emergence of digital radio and satellite-delivered programming.

The commission, she says, reviews its policies regularly to ensure that they are still relevant to the industry and the marketplace. This review will cover areas such as station ownership, programming sources and Canadian content requirements.

According to Plouffe, the crtc’s core principles for the medium will guide the review process – namely, that radio should offer predominantly Canadian programming, provide service relevant to local communities, deliver balanced, high-quality coverage of matters of public concern, and reflect Canada’s cultural mix.

Michel Tremblay, executive vice-president of the Canadian Association of Broadcasters (cab), says the priority should be to find a way of fixing radio’s financial plight.

‘Our industry has been plagued with very serious economic problems,’ he says.

Over the last seven years, Tremblay contends, fewer than half of all stations in Canada have succeeded in turning a profit.

‘Our view is that this has more to do with a structural problem that needs to be fixed than with purely economic cycles,’ he says. ‘Revenues are flat and profitability is not there. We cannot build a sustainable radio industry in such economic conditions.’

For broadcasters, the biggest issue that needs to be addressed is unquestionably the commission’s policy on multiple licence ownership.

The crtc currently prohibits a single company from owning more than one am and one fm station in any given market. Broadcasters want to see this changed, arguing that it will help the industry become profitable, offer more diverse programming, and move successfully into new technologies.

The cab’s submission, Radio Renaissance: Making Radio Competitive, calls for a change in the rules that would allow two am and two fm stations per owner per market.

Tremblay says the existing regulations have kept the radio industry small, and have stood in the way of rationalization.

Relaxing those regulations would not create monopoly situations within markets, he argues, but rather would lead to diversification and better service to the public.

To back up its position, the cab has produced a study on the effect that such a change has had in the u.s., where consolidation within the radio industry began about five years ago.

In some u.s. markets, Tremblay says, a single operator may own anywhere from four to seven stations. The result? A better economic outlook for broadcasters, and a greater diversity of formats.

‘When one owner controls so many outlets,’ Tremblay explains, ‘he tends immediately to remove duplication of services and of formats, and to move stations into new niches, so they can offer a broader range of target groups to advertisers.’

From an advertising standpoint, he says, radio in the u.s. has become stronger, and has increased its clout in the media mix.

Without a revamp of the current ownership policy, the cab maintains, the industry will be hard-pressed to finance some of the changes it needs to make to secure its future – in particular, the transition to digital radio. The association estimates that it will cost broadcasters more than $200 million to make that shift.

The cab submission also includes a study conducted on the association’s behalf by TD Securities, which concludes that radio in its current state is of little interest to the financial community, because of ‘stagnant growth and unreliable, lacklustre financial performance.’

Advertising remains the prime source of revenue for private radio. And its share of the overall advertising buy is declining: In 1980, it stood at 11%; by 1996, it was down to 8.5%.

Bob Templeton, president of the St. John’s, Nfld.-based Q Radio System, says that even if a single operator owned all the stations in one market, its share of the advertising pie would still be pretty negligible.

‘We’re just the little guys,’ he says. ‘In a market with five stations, an average station probably accounts for only about 2% of the advertising pie. So you’re really irrelevant from a business standpoint.’

Under the current ownership regulations, Templeton continues, there is duplication of formats in many markets, with operators fighting one another for dominance in the most lucrative formats.

Broadcasters, he says, need to stop pitting station against station and start banding together to compete for a larger share of the overall advertising pie.

Templeton says he is encouraged by the more co-operative approach the crtc has adopted in the past few years, particularly when it has come to facilitating the shift to digital radio.

‘The crtc is taking a much more contemporary view on the question of where the medium needs to be in the next five to 10 years, and how to get there,’ he says. ‘They seem to be much more co-operative, as opposed to playing the big, bad regulator just waiting to catch you doing something wrong.’