Thank you, Madam Chair. Good morning.
This deck provides an overview of the Broadcasting Act and information on key trends affecting broadcasting in Canada.
I will start with the Broadcasting Act, on page 4.
It dates back to 1991 and establishes the broadcasting policy for Canada. The other two main things the act does is it sets out the powers of the Governor in Council, the CRTC, and the minister in relation to broadcasting and establishes the mandate, governance, and powers of CBC/Radio-Canada.
If we turn to the broadcasting policy objectives for Canada, which are featured on page 5, the overall orientation is to ensure that Canadian content is created and accessible. Among other objectives, the act points out that the broadcasting system through its programming provides a public service; that it is essential to the maintenance and enhancement of national identity and cultural sovereignty; and that it serves to safeguard, enrich, and strengthen the cultural, political, social, and economic fabric of Canada. It also points out that programming should be drawn from local, regional, national, and international sources and that Canadians should be provided with a reasonable opportunity to be exposed to the expression of differing views on matters of public concern.
Slide 6 points out the key role that the CRTC plays. It is the body responsible for the regulation and supervision of the Canadian broadcasting system. According to the act, when the CRTC regulates, it should take into account a number of things, including that it be readily adaptable to the characteristics of the French and English language markets, that it take into account regional concerns, and that it facilitate the provision of Canadian programs to Canadians.
The next page, slide 7, presents the mandate of CBC/Radio-Canada. I won't read through every single line of it. I know the committee is well aware of the mandate of the CBC, which is a very broad and inclusive mandate oriented towards providing a wide range of programming that informs, enlightens, and entertains and towards ensuring that the programming should be predominantly and distinctively Canadian.
We group the key trends affecting broadcasting into three basic areas: industry, advertising, and audiences. With respect to the industry trends, the first thing we want to draw the attention of the committee to is that the broadcasting industry is part of a broader communications industry that generates revenues of more than $60 billion a year. Broadcasting also contributes to the GDP of the country and represents on the order of 50,000 jobs for Canadians.
It is a market that provides Canadians with a diversity of services. As you can see on slide 11, we have more than 660 TV services and more than 1,100 radio and audio services authorized to broadcast in Canada. At the same time, the industry is quite concentrated, because you can see, whether you're talking about the combined revenues of the telecom and broadcasting sector or just about the broadcasting sector, that the top five companies account for more than 80% of industry revenues.
Slide 12 is a pictorial representation of the major activities and the scope of the activities of our major communications companies. They're involved in many different but related lines of business, ranging from traditional radio and television to book publishing, mobile apps, and sports.
In terms of revenue and profitability, we see that total revenues for the broadcasting industry have grown from over $15 billion in 2010 to more than $17 billion in 2014. Revenue and profitability trends, however, vary from one segment of the industry to another. You'll see that in some cases they are more profitable than in others, and in some cases the revenues are higher than in others.
In terms of Canadian programming expenditures, we take as a starting point that the policy objectives of the Broadcasting Act require that broadcasters contribute to the creation and presentation of Canadian programming. We look at what they spend on Canadian programming and see that between 2010 and 2014 Canadian TV services increased their investments in Canadian programming, growing them from $2.5 billion to $2.9 billion, and we can see that now the pay and specialty sector spends about the same as the conventional broadcasting sector.
Now we turn to news. As we narrow down into the news genre we see that news accounts for approximately one-third of total Canadian programming expenditures. Local television stations, and we're talking about the conventional television stations, make a significant contribution to the provision of news. News constitutes an important part of broadcasters' overall expenditures on Canadian programming, and all this news is local. The CRTC has reported that approximately $470 million was spent in 2014 by local television stations on local news and local programming.
Turning to advertising, the Canadian advertising market is undergoing structural change as a result of the growth in Internet advertising, which as you can see from the graph presented, has come mainly at the expense of newspapers.
In terms of audiences, we've looked at what's going on with consumption, what audiences are consuming and where they are consuming it. In 2014 Canadians spent on average 27.4 hours watching TV. The average weekly hours have been decreasing over the last few years, particularly among millennials, the 18 to 34 years of age group. More and more Canadians also are watching television online, and millennials in particular are more likely to watch Internet television. They're also very mobile, with 90% of them owning a smart phone.
Finally, we looked at the consumption of news. In 2013, television was the type of medium most often used by Canadians who followed news and current affairs. The use of the Internet to follow news and current affairs grew from 30% in 2003 to 59% in 2013. We see that younger Canadians use the Internet in greater numbers than their older counterparts to obtain news and information.
There you have a quick overview of key trends and the policy parameters set out in the Broadcasting Act.