OTTAWA and MONTREAL – How can you compete with free?
That’s one of the questions that Eric Boyko, president and CEO of Montreal-based Stingray Digital Group, is asking after the CRTC rejected his company’s complaint Tuesday against CBC’s six month old digital music service CBCMusic.ca.
Stingray filed a Part 1 application with the Commission in April alleging undue preference by the national broadcaster’s ad-supported service, citing its dependence on government funding that is not available to private enterprises and its reliance on preferential copyright licence fees. Stingray is a private, subscription-based, multi-platform music service provider that owns digital music service Galaxie in Canada plus international services including the Karaoke Channel and Concert TV.
In dismissing Stingray’s complaint, the CRTC noted that the CBC’s government funding is set by Parliament and therefore not under the CBC’s control, and that the broadcaster has used government funding since its inception “to operate its broadcasting undertakings in conjunction with, and often in competition with, commercial broadcasting undertakings”.
With respect to the issue of CBC’s copyright rates, the Commission referenced an intervention filed by the Society of Composers, Authors and Music Publishers of Canada (SOCAN) that the allegation that CBC receives a preferential copyright rate is incorrect as the CBC’s tariffs are established by the Copyright Board at public hearings “only after an extensive consideration of a number of factors including the tariffs that are paid by the private sector and the relative audience shares, among other factors”.
But Boyko questions why a crown corporation should even be allowed to offer a service for free when it’s clear that a market exists.
“In short, Stingray is disappointed with this decision”, he said in an interview with Cartt.ca. “How can everyone in this market charge a fee and then you have one company doing it for free? Stingray does business in 66 countries around the world, and the only country where we have competition from the government is in Canada.”
Boyko added that his company will consider “other options” to ensure “that the CBC doesn't use its government funding and other advantages to hurt Canadian business in the dynamic and growing digital marketplace". Those options could include an appeal during the CBC’s license renewal hearings this November.
In addition, Stingray said that it will continue its push that all elements of CBCMusic.ca “be predominantly and distinctively Canadian”, a move that it claims would “ensure that the public monies used to subsidize rights payments for the use of the music featured on the service flow to Canadian artists and not be sent off shore”. (Boyko expanded on this point to Cartt.ca readers here, prompting a reply from Kirstine Stewart, executive vice-president of CBC English Services.)
CBC, for its part, said that the decision “continues the CRTC's practice of encouraging innovation in the delivery of programming over digital platforms”.
"We're very pleased by today's decision by the CRTC as CBCMusic.ca plays an important role in supporting Canadian artists across the country and in meeting the needs of Canadians in an ever-evolving digital world," said Chris Boyce, executive director of CBC Radio and Audio, in a statement.
