Does CanCon Still Make Sense?

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By Michael Raine

This article originally appeared in the March/April 2016 issue of Canadian Musician

Canadian content regulations worked. It’s just an accepted fact, even by many of its critics. CanCon succeeded in creating a music industry and infrastructure where none existed on Jan. 18, 1971, the day Pierre Elliot Trudeau’s government made it law to play Canadian music on the radio. To the extent that Canada now regularly produces nationally and internationally successful artists who are signed to Canadian record labels, record in Canadian studios, and work with Canadian managers, agents, promotors, publicists, and others while selling out Canadian venues and festivals, there is common consensus that CanCon has succeeded well beyond most expectations. But 45 years later, we have a Trudeau as prime minister and, with the exception of a few tweaks, the same CanCon system. The more things change, the more they stay the same, as the cliché goes.

“The current system is, I would not say broken – in fact it’s not broken – it is, however, in need of adjustment at some point in the very near future,” says Canadian music and radio guru Alan Cross. “You are going to have people that insist that the status quo is just ­fine simply because they’re making a good living off of the status quo, and then others saying the status quo is not working for them whatsoever because they are not part of the original infrastructure and are becoming either ignored or marginalized.”

Alan Cross picHow the CanCon system can and should be adjusted to bring it into the 21st century has become the debate. CanCon is still a system designed for an era where terrestrial radio and cable television were the largest cultural gatekeepers. That position of strength has eroded with the rise of the Internet and all the related media and technologies it enables.

Radio programmers, understandably, are upset they must play by rules that don’t apply to streaming services or Internet radio. Meanwhile, acknowledging that Canada is producing global superstars like Drake, The Weeknd, and Arcade Fire, some in the music industry want changes to incentivize playing emerging acts to avoid radio stations filling their CanCon quotas with acts that “don’t need the help.” And then there are those who make an argument for the status quo as it pertains to AM/FM radio and say it needs to be extended, in some form, to Internet services. Of course, there are also some who take a more laissez-faire approach, essentially arguing, “Congratulations, CanCon worked. A strong Canadian music industry was built and now it can fend for itself.” Everyone has a stake and a legitimate opinion.

Aside from obvious self-interest, it appears many people’s opinion is determined by their view of CanCon’s purpose. Should the goal remain as it has always been, to provide platforms for Canadians to hear their own stories – regardless of genre or commercial success – in a cultural marketplace dominated by our southern neighbour? Or should CanCon’s purpose evolve and be about giving a leg up to emerging Canadian talent, allowing them to compete against established stars?

A proponent of the latter is Gregg Terrence, president and founder of the Canadian Independent Recording Artists’ Association (CIRAA). Back in 2005, prior to the creation of CIRAA, Terrence created the Let’s Fix CanCon website and petition, proposing a comprehensive overhaul of the CanCon formula that would see it transition from a volume-based system where all CanCon is created equal, to a credits-based system that would incentivize playing unknown and emerging acts. The perceived problem was that radio’s CanCon quotas were being ­ filled by established stars, which in 2005 was the likes of Nickelback, Avril Lavigne, and Sarah McLachlan. Essentially, CanCon was a victim of its own success. It created a star system where there wasn’t one and now those stars were clogging the airwaves for lesser-known artists. Today, this problem (if you consider it one) is even more acute as Canada pumps out more mainstream stars than it did 10 years ago.

Terrence’s proposed solution would create four tiers of credits with radio stations needing to amass a certain number of credits to comply with CanCon rules. In its most basic terms, the proposed system would award .75 credits for a spin of an “international artist” (i.e. Drake); 1.0 credit for an “established artist” (i.e. Tragically Hip); 1.25 credits for a “national artist” (i.e. Monster Truck); and 1.5 credits for a “developing artist” (i.e. someone you probably haven’t heard of ). Looking back on the proposal 11 years later, Terrence says, given the current landscape of Canadian stars, he’d create a larger credit for younger and newer acts, but by and large thinks it’s still a good idea.

Gregg Terrence“I guess the answer to your big question of ‘Do we still need CanCon?’ I believe under the right conditions, yes. As it currently exist? I’m not sure it’s that relevant. You know, when you can play Drake and The Weeknd followed by Alessia Cara and so on and so on, CanCon is not helping radio promotors break a new Canadian band the way it should,” Terrence tells Canadian Musician. “As it currently exists, I’m not sure it’s being very effective or even that felt within radio because of Canada’s current international success. The timing of your question and the timing of this article, this is a unique moment in time where we have seven or eight out of 10 at the top of the Billboard chart. This is an unusual time, but if you go back a couple of years and go forward a couple of years, I believe what would help Canadian record companies, I believe what would help Canadian artists, I believe what would help Canadian radio and radio listeners would be more effective CanCon rather than being only volume-based.”

Around the same time as Terrence was proposing his credit-based Let’s Fix CanCon solution, Cross was at Corus Entertainment, parent company of 102.1 The Edge, thinking along similar lines. As he explains, commercial radio stations need money to survive, which means they need ad revenue. They get ad revenue with high ratings, and they get high ratings by playing hits; therefore, there needs to be an incentive for commercial radio stations to stray from the hits and play something less familiar to listeners.

“When I was doing some work with Corus Entertainment a number of years ago, what we proposed was some kind of emerging artist incentivization situation. I can’t remember what the formula was, but say maybe the play of an emerging artist – and we can talk about what that means and what he de­finition of an ‘emerging artist’ is and that’s another story entirely – but for every play of an emerging artist’s song, that would count as two plays of an established Canadian hit,” Cross explains before pointing out the problem with this idea. “That works­ fine for any kind of contemporary music, but what a lot of people tend to overlook is there is a large appetite for adult hits and classic rock. They don’t make classic rock anymore and they don’t make adult hits anymore, so what we end up having is that these radio stations are lost in the argument when they say that we should bump CanCon to 37 per cent or 40 per cent or whatever it is. What are they supposed to play? More Neil Young and Tragically Hip and Guess Who?”

That is one variable to consider. Another, pointed out by Arts & Crafts artist manager Jason Burns (Hey Rosetta!, Rich Aucoin, etc.), is should a tiered system be primarily concerned with the artists at the bottom, or does it make more economic sense to focus on the mid-level bands to help them cross the next threshold? “So if you’re talking about categorizing Metric as a number two, I would argue that they’re, relatively, only a few degrees shy of being in with the Drake and Arcade Fire category. So maybe they need the extra support to get into the international stage.”

Mike McCartyAs well, if you’re incentivizing playing the smaller artists, does that inherently mean you’re discouraging playing the superstars? That may make little di­fference to Drake, but as SOCAN Chief Membership & Business Development Officer Mike McCarty points out, what about the Canada-based infrastructure around Drake? “If you look at him as a business, and a business that’s largely exporting his product, he has created a massive economic influx of revenue into Canada,” says McCarty, noting there are nearly 70 people, most of them based in Toronto, that have worked as co-writers and producers on Drake tracks. “This feeds the Canadian economy and the Canadian music ecosystem and creates opportunities for the next person… So, we cannot look at it as one or the other. It is both and we have to support the known artist and we have to support the unknown artist as well.”

McCarty makes a valid argument, but then radio will always play the hits. “Drake would be playing whether he was Canadian or Lithuanian. It wouldn’t matter. A hit is a hit is a hit,” says Cross. “The Weeknd became a hit mostly in the United States. Remember, when The Weeknd was getting started in Canada, he was marketed as an alternative artist. But then he became a pop artist in the U.S. and kaboom! Same thing happened with Shawn Mendes and the same thing happened with Bieber. A hit is a hit is a hit. So you would not be disincentivized to play Drake because Drake is a hit.”

Adding yet another element to the debate over CanCon’s purpose, 604 Records co-founder Jonathan Simkin says that if you’re talking about shifting CanCon from being about Canadian versus American art to being big versus small artists, then that also becomes a debate over ownership of repertoire and label resources. “I always understood the point of CanCon was Canadians versus Americans, not small artists versus major label artists, but it’s an interesting point. Maybe what needs to be done is exclude major labels from that equation,” says Simkin, whose label represents Nickelback, Carly Rae Jepsen, and Marianas Trench among a number of smaller artists. “But boy, would the major labels ever flip out if they changed it that way. But if the idea is to help the little guy, then I think it helps.”

Jonathan SimkinAs Cross warns, ingrained self-interest from all parties permeates the CanCon discussion and that is abundantly clear when speaking with Simkin – and he’ll be the first person to acknowledge it. 604 Records being a Canadian label representing mostly Canadian artists that relies on radio to promote them, CanCon has helped a lot. “So, from a purely self-interested perspective I like it, but in the bigger picture I sometimes wonder if it is really necessary anymore,” he offers, noting the new reality of a strong Canadian music industry. “The other negative side of it is that it really makes me reluctant to sign bands that aren’t Canadian. Now that we’ve done well internationally for a number of years, we get a lot of inquiries from artists from all over the world, but the truth is when I get an inquiry from an American band, I’m reluctant because I know that the playing field isn’t going to be even for them. So it has caused me to not sign a couple of artists who, were they Canadian, I probably would have.” Of course, the CanCon defender may look at that statement and go, “Good, one less American band on a Canadian label means one more label spot for a Canadian band.” It’s all a matter of perspective.

“Streaming is the multi-billion dollar elephant in the room. By arguing over radio, do we risk ­fighting over crumbs while the elephant takes the peanut sack?”

Another point of contention is just how much Canadian content is the right amount? Under the original 1971 legislation, radio was given a mandated CanCon quota of 25 per cent. That was bumped to 30 per cent in the 1980s and again to 35 per cent in 1999. “CanCon worked very, very well; however, in the ensuing years, it has been distorted on a couple of levels,” says Cross. “Now we’re up at 35 per cent as a result of a lot of lobbying that went on, on behalf of various music industry associations. A lot of radio stations are running 40 per cent and the reason they are offering 40 per cent is because they knew that a way to the CRTC’s heart was to over-promise Canadian content. What they’ve since done is distort the field so that some radio stations have to run 35 per cent and other radio stations over-promised at 40 per cent and that wasn’t necessarily for the good of promoting Canadian content; that was ‘get me the licence!’”

Jason Burns picForty per cent is an awfully big piece of the pie to devote to a relatively small music market, leaving just 60 per cent of a station’s playlist to cover everything else in the world listeners want. As Cross points out, maybe the more rational approach is to ask, “In this world, what is the natural level of CanCon based on what are we producing, what are we capable of funding, what are consumers capable of ingesting, and what is the country capable of sustaining?” In the past, determining that number would’ve meant finding the percentage of record store shelf space taken up by Canadian albums and use that as a ballpark  figure. There are now many more parts to the equation, having to take into account streaming and YouTube views and all the ways people now consume music. “The question is: what is the appetite for CanCon? What is the natural, healthy, culturally-protective level of CanCon and how do we regulate that in a world where a lot of music distribution is inherently and forever unregulateable?” says Cross.

As Cross alludes to, is all this talk of how CanCon should be applied to radio missing the bigger point? Streaming is the multi-billion dollar elephant in the room. By arguing over radio, do we risk ­fighting over crumbs while the elephant takes the peanut sack?

Regulating CanCon on radio was simple. There are only­ a finite number of songs on a playlist so you know how many songs make a certain percentage of that list. The CRTC can enforce this because it controls who gets a broadcast licence. It’s almost quaint in how governable it is. Streaming, on the other hand, is an uncontrollable beast that puts the reins in the hands of consumers. So how do we take the most basic principle of CanCon – that Canadians should be exposed to Canadian art – and apply it to streaming? There is yet to be a clear answer, but there are interesting suggestions.

On the major streaming services, availability is no concern. They have upwards of 35 million songs and nearly any Canadian song is available. But with 35 million songs, there are zero guarantees a Canadian listener will be exposed to a Canadian song. As both McCarty and Cross point out, quotas can’t work in the streaming world, so maybe the solution is in promotion and recommendation.

“Distribution in music and the availability of Canadian music on those services is not a problem. It is the accessibility of it that, I’m not saying it is a problem, but that is where we have to focus our concerns and that’s where we have to make sure that not only is the deck not stacked against Canadian artists, but hopefully the deck is stacked in favour of Canadian artists so that Canadians can have ready access to their own culture,” says SOCAN’s McCarty. “I think if the government is going to put their attention anywhere, they should look at that.” For McCarty, that means looking at the streaming services’ signi­ficant recommendation and curation tools, as well as the prized spots on a service’s homepage that provides exposure. For example, when a listener searches for a song by popular American alt-country artist Ryan Adams, what if along with the direct search results, the streaming service also returned a recommendations list saying, “If you like Ryan Adams, maybe you will like [Canadians] The Strumbellas, The Sadies, and Cowboy Junkies.”

It is not a far-fetched suggestion considering many of the streaming services are already targeting Canadians with localized playlists. “When I was working for Songza [which has since been bought and folded into Google Play Music], we made sure that we had a substantial number of Canadian-based or Canadian-flavoured playlists because we knew there was a demand out there for it,” recalls Cross. “CanCon has created a tremendous amount of musical nationalism in this country where people are totally cool with hearing Canadian music. So we’ve built up the momentum and built up the habits in Canadians who want to hear more Canadian music. The question is: how do we keep them doing that without putting the entire burden on radio?”

As an industry with a common goal in exposing Canadians to Canadian music, how do we move forward? There is no clear answer. As Cross says, CanCon has been a tremendous success story and the system is not broken, but it needs adjusting. That much most people agree on. But exactly what those adjustments should be – and even what the end goal should be – elicits a lot of conflicting opinions. At some point in the near future, we’ll need to come to a consensus.


*Michael Raine is the Assistant Editor of *Canadian Musician

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Michael Raine is the Editor-in-Chief at Canadian Musician and Canadian Music Trade magazines. He also hosts the Canadian Musician Podcast.
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