Section 02 Private Broadcasters Connect An Economic Engine... 2 Appealing to Advertisers... 6

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2 table of contents Introduction... 1 Section 1 Private Broadcasters Compete... 2 An Economic Engine... 2 Appealing to Advertisers... 6 Section 2 Private Broadcasters Connect... 8 Choice for Individuals... 8 Canadians Turn First to Canadian TV... 9 and on the Radio Dial... 1 The Transition to Digital Section 3 Private Broadcasters Contribute Looking at Television Content Radio Programming: Investing to the Tune of $4 Million The Copyright Imbalance Section 4 Canadians Benefit Committed to Communities Committed to Canadians Conclusion... 2 ADVISORY This report reflects financial data for the broadcast year ending August 31, 27. This report does not take into account recent economic changes that have occurred since that date.

3 Introduction Broadcasting 28: Report on the Industry is the Canadian Association of Broadcasters annual look at the economic, social and cultural contributions of Canada s private broadcasting industry. It presents research and data some exclusive to this Report from the CAB and a number of other sources, to build a factual summary of the industry. The broadcasting story that is central to the operations of all private broadcasters but often goes untold is about the support offered to communities. The Canadian Association of Broadcasters 28 Community Service Report profiled in Section 4 provides a snapshot of the causes that broadcasters support, their level of community engagement and their direct contributions. Radio and television stations take tremendous pride in contributing airtime and volunteer hours, raising audience and station donations and airing public service announcements (PSAs) for a wide variety of charitable activities. The total value of pledges and PSAs reached $314.5 million over the past year while the time volunteered by employees on-air personnel and others totalled more than 23, hours. Together, these tangible and intangible examples of corporate social responsibility, all willingly given, have made a tremendous impact on Canadian communities. In addition to providing strong community service this year, broadcasters launched new services on television, radio and online. And the net result? Financially, for the broadcast year ending August 31, 27, radio and pay/specialty television continued to experience growth. Conventional TV recovered slightly from the previous year s softness, but challenges persist. Audiences have been stable for broadcasting and, although Internet use has grown, it has for the most part complemented traditional content providers. The year ahead will be challenging for private broadcasting. Radio awaits important decisions on copyright tariffs, on content obligations for French-language artists, and on the definition of emerging artists. Major conventional television licence renewal hearings will help define the direction of over-the-air television for the next few years, as will key investments in digital infrastructure and content. Pay and specialty services, along with conventional, will be adapting to the regulatory frameworks decision released in October, 28. All broadcasters await a copyright tariff decision on the use of music on the Internet. Overall, the report demonstrates the continuing strength of radio and television for Canadian consumers and advertisers alike. Canadian Association of Broadcasters 1

4 section 1 Broadcasting 28: Report on the Industry PRIVATE Broadcasters compete An Economic Engine The broadcasting sector is a cultural industry and a key part of Canada s creative economy, which also includes print media, visual arts, film and sound recording and other categories. The Conference Board estimates the GDP of Canada s cultural sector in 27 was more than $86 billion 7% of the country s total real GDP. It also employed, directly or indirectly, more than one million people in 27. Broadcasting (which, in the Conference Board report, includes public and private radio, television, cable, satellite and Internet) accounts for 16% of the cultural sector s GDP and is also one of the three largest cultural subsectors in terms of job creation, representing 9% of direct employment in cultural industries. 1 Radio, conventional television and pay and specialty broadcasting have made a consistent contribution to Canadian GDP over the past five years. This is in contrast to other sectors of the information and cultural industries, such as the motion picture and sound recording sector, which has seen its contribution fall. Broadcasting also makes a larger contribution to GDP than related industry sectors, such as the cable and other (satellite, microwave, etcetera) program distribution sector and the Internet access and portals sector. Private broadcasters in Canada currently employ almost 23, people. 2 Nominal GDP of Cultural Industries in Canada, 23 Visual Arts 2.4% Performing Arts 2.6% Architecture 2.9% Libraries 3.% Heritage 3.2% Other 15.1% Written Media 39.% Broadcasting 16.2% Film Industry 9.5% Advertising 6.% Source: Statistics Canada, as presented in Conference Board of Canada, Valuing Culture: Measuring and Understanding Canada s Creative Economy, August Conference Board of Canada, Valuing Culture: Measuring and Understanding Canada s Creative Economy, August Source: CRTC, Statistical and Financial Summaries for private radio, conventional television, and pay/ppv/vod/specialty television, Canadian Association of Broadcasters

5 Broadcasting 28: Report on the Industry section 1 The economic footprint of Canada s cultural industries generally takes into account household spending on culture, wages and benefits of persons directly and indirectly employed in culture, and government revenues, mainly from various taxes. While Canadian governments spend some $8 billion on culture, they actually garner a much higher level of revenues almost $25 billion from the economic activity generated by the cultural industries. Economic Footprint of Canada s Cultural Industries, $ millions Household spending on culture Labour income persons directly or indirectly employed in the sector Government revenues from culture sector Government spending on culture Source: Conference Board of Canada, Valuing Culture: Measuring and Understanding Canada s Creative Economy, August 28. Canada s private broadcasters operate in a competitive environment, and the 29 outlook is challenging given the volatility in financial markets and pressure on consumer discretionary income, along with the increasing competition for advertising dollars from other media. ADVISORY This report reflects financial data for the broadcast year ending August 31, 27. This report does not take into account recent economic changes that have occurred since that date. Canadian Association of Broadcasters 3

6 Broadcasting 28: Report on the Industry section 1 Pay and specialty television services are now the largest sector of the private broadcasting industry by revenues, with exceptionally strong growth over the past 1 years. Private radio revenues have also increased steadily, while private conventional television revenues were almost flat. Overall, the private broadcasting industry (private conventional, private pay and specialty and private radio) has experienced growth over the past 1 years, with total revenues of almost $6.3 billion and profits of more than $1 billion in 27. Private Broadcasting: Revenues and Profits ($ millions) 7 6 $ millions Total Revenues Advertising Subscription PBIT Source: CRTC, Statistical and Financial Summaries for radio, conventional television, and pay/ppv/vod/specialty television, The profitability of pay and specialty services as a group has increased since 22. Private radio profitability has flattened over the past three years, while that of private conventional TV has decreased. Private Broadcasting: Profitability by Sector ($ millions) $ millions PrivConv Priv Radio Pay & Spec Source: CRTC, Statistical and Financial Summaries for radio, conventional television, and pay/ppv/vod/specialty television, Canadian Association of Broadcasters

7 Broadcasting 28: Report on the Industry section 1 Revenues per private conventional television station increased moderately over the past 1 years, but have been flat in recent years, while profitability per station has fallen as operating costs, especially programming costs, increased. Private Conventional: Revenues and Profits per Station ($ millions) 25 2 $ millions Revs/Unit PBIT/Unit Sources: CRTC, Statistical and Financial Summaries for conventional television, ; Armstrong Consulting. On average across the country, revenues and profits per pay and specialty service decreased with the introduction of a substantial number of new services in 21. Pay and Specialty: Revenues and Profits per Service ($ millions) 25 2 $ millions Revs/Unit PBIT/Unit Sources: CRTC, Statistical and Financial Summaries for pay/ppv/vod/specialty television, ; Armstrong Consulting. Canadian Association of Broadcasters 5

8 Broadcasting 28: Report on the Industry section 1 Revenues and profits per private radio station increased over the period but have been flat over the past three years. However, while AM revenues and profits per station have increased, as the number of AM stations declined, FM revenues and profits per station have flattened as the number of these stations increased markedly. Private Radio: Revenues and Profits per Station ($ millions) $ millions Revs/Unit PBIT/Unit Sources: CRTC, Statistical and Financial Summaries for private radio, ; Armstrong Consulting Appealing to Advertisers Advertising is the single largest source of revenues for the private broadcasting industry, accounting for 98% of private radio revenues, 94% of revenues for private conventional television broadcasters and 36% of revenues in the private specialty and pay sector. The advertising market is highly competitive, and is becoming increasingly fragmented. Internet advertising revenues increased at a compound annual growth rate of 51.3% over the past 5 years, with per capita advertising expenditures in 27 approaching those of private radio. Nonetheless, over one-third of total ad spending in Canada goes to television and radio, and television claims a greater share of ad spending than any other medium. 6 Canadian Association of Broadcasters

9 Broadcasting 28: Report on the Industry section 1 Share of Ad Spending of Various Media in Canada, 27 Other 1.4% Internet 8.7% Out-of-home 3.% Magazines 5.% Yellow pages 9.3% Cat./direct mail 11.9% Television 23.2% Radio 1.3% Newspaper 18.1% Total Ad Spending in Canada in 27 = $14.2 billion Source: TVB Advertising Revenues by Sector ($ millions) CAGR Television % Newspaper % Cat/Direct Mail % Yellow Pages % Radio % Magazines % Out-Of-Home % Internet % Other % Total % Source: TVB. TV and radio ad spending is healthier in Canada than in other countries, when compared to ad spending devoted to the Internet. Of the three media (radio, television and Internet), radio and television account for 79% of spending, while the Internet claims the remaining 21%. The Internet has made more inroads in France and the U.K., where combined radio and television ad spending is comparatively lower than in Canada. Television, Radio and Internet Share of Ad Spending, Various Countries, 27 Share of spending (%) % 22.9% 56.% Canada 19.9% 16.9% 63.2% U.S. 29.% 13.1% 57.8% France 42.3% 8.1% 49.5% U.K. Internet Radio TV Source: PwC, Global Entertainment and Media Outlook Canadian Association of Broadcasters 7

10 section 2 Broadcasting 28: Report on the Industry PRIVATE Broadcasters Connect Today, Canadians can access more than 6 private radio stations and nearly 27 television services (both private conventional and discretionary). Number of Private Broadcasters Reporting to CRTC Stations/Services 1996/97 26/7 % change Private radio % Private conventional television % Private Pay/PPV/specialty % Source: CRTC. Choice for Individuals Looking at the availability of TV services on a per capita basis, Canada s broadcasting system is remarkable, with viewers enjoying more choice than people in most other television markets. Canadians have three times as many TV choices as people in France and more than seven times as many choices as people in the U.S. # of Channels per Million People in Canada and Abroad, # of channels Canada U.K. France U.S. Includes nationally-available domestic and foreign television programming services; excludes local television, radio, and non-programming services. Sources: CAB based on CRTC; Ofcom; CSA; FCC; channel lineups for SkyTV, Dish Network, Cox Cable, Bell ExpressVu, Rogers Cable; Statistics Canada; U.K. Statistics Authority; Institut national de la statistique et des études économiques (France); U.S. Census Bureau. 8 Canadian Association of Broadcasters

11 section 2 Broadcasting 28: Report on the Industry Within this rich media environment, Canadians have increased the time they spend watching television and using the Internet in the past three years, while radio listening has declined slightly. There are more choices of media in Canada than ever before, and more competition for audience. Hours Spent Using Various Media in Canada Medium hours Used Per Week % Change Radio (1) % Television (2) % Internet (3) % Notes: (1) Persons 12+. (2) Persons 2+. (3) Persons 12+. Sources: CRTC, Ipsos Reid. canadians turn first to canadian tv Canadians tune into Canadian private television. About three-quarters of all television viewing in Canada is to domestic conventional and discretionary services. Moreover, fully 66% of all television viewing in Canada is to private conventional, specialty, pay and PPV television. Tuning to Canadian and Foreign Television Services in Canada 1 Share of Tuning (%) U.S. and Other Canadian Public Canadian Pay/Specialty Canadian Private Conventional Source: BBM, TV EM Statistics, Spring 2, Spring 23, Spring 28. Canadian Association of Broadcasters 9

12 section 2 Broadcasting 28: Report on the Industry and on the Radio Dial Private radio, too, remains the overwhelming favourite among Canadians more popular than all other sources of radio combined. Some 8% of radio tuning in Canada goes to Canada s private broadcasters. Share of Radio Tuning by Type of Broadcaster Audio Services 2.% CBC/SRC 12.4% Community & Campus 1.4% Ethnic & Native.2% Other.8% U.S. 2.7% Private Commercial 8.5% Notes: "audio services" includes subscription/pay audio services via satellite or terrestrial distribution. "Other" includes Environment Canada, special event, tourist/traffic audio services, and low-power audio. Source: CRTC, Communications Monitoring Report 28. Canadian television viewing time is in line with that of European countries such as the U.K. and France. Radio listening in Canada is lower than in other OECD countries, with the exception of Japan. Time Spent Watching Television and Listening to Radio, Various Countries, Hours 15 Hours Hours/week Television Hours/week Radio 5 Canada U.K. France U.S. Japan Canada U.K. France U.S. Japan Source: Ofcom, The International Communications Market Canadian Association of Broadcasters

13 section 2 Broadcasting 28: Report on the Industry The Transition to Digital Canadian broadcasters have been more successful than their counterparts in other countries in deploying high-definition television (HDTV) services. In Canada, where 43 HD services are in operation, penetration is 11.2% of television households more than double the U.K. and almost double the rates in the U.S. and France. 4 HDTV Penetration in 27 % of television households with HDTV U.K. U.S. France Canada Japan Source: SNL Kagan, Global High Definition Television Trends (27). The CRTC has set a date of August 31, 211 for the analog shut-off in Canada, when analog conventional television will need to be converted to digital; the United States has already embarked on its digital transition, set for February 29. For most Canadian television viewers, the conversion should be relatively seamless, since a significant majority of Canadian households subscribe to cable, satellite or other distribution services and these distributors are already providing digital service to some customers. Compared to other countries, however, digital penetration in Canada is relatively low, at less than 6% (compared to nearly 8% in the U.K.). Digital Television Penetration in 27 8 % of television households with digital television Japan Canada U.S. France U.K. Source: SNL Kagan, Global High Definition Television Trends (27). While the transition to DTV should be smooth, Canadian conventional TV broadcasters are facing major new expenditures in the next two years. Estimates are that the industry s total costs in new transmitters alone could be $3 million to $4 million, excluding purchases of HD studio, news gathering and master control equipment. 5 4 Source for Canadian data: Boon Dog Professional Services Inc., Canadian Digital TV Market Monitor volume 1, report 4 (February/March 28). 5 Source: CAB survey of conventional television members, August 28. Canadian Association of Broadcasters 11

14 section 3 Broadcasting 28: Report on the Industry Private Broadcasters Contribute Private broadcasters contribute to Canadian content through their Canadian content development payments (radio) and their expenditures on Canadian (TV) programming. These contributions are $1.6 billion, more than 25% of the industry s total revenues. In comparison, BDU contributions to Canadian content via the Canadian Television Fund, other BDU funds, and cable community channels represent 5% of total BDU revenues. Expenditures on Canadian Content by Private Broadcasters in 26-7 Category expenditures ($ millions) Private Radio: CCD and copyright payments $11.4 Private conventional TV expenditures on Canadian programming $626.6 Private Pay/PPV/specialty television: expenditures on Canadian programming $872. TOTAL $1,6. Sources: CRTC, Statistics Canada. Looking at Television Content Private television broadcasters spent $1.5 billion on Canadian television programming in 27, an increase of more than $2 million since 25. ADVISORY This report reflects financial data for the broadcast year ending August 31, 27. This report does not take into account recent economic changes that have occurred since that date. 12 Canadian Association of Broadcasters

15 section 3 Broadcasting 28: Report on the Industry Private Television: Eligible Canadian Programming Expenditures ($ millions) 1 8 $ millions PrivConv Pay and Specialty Source: CRTC, Statistical and Financial Summaries for conventional television and pay/ppv/vod/specialty television, These expenditures create a diverse range of Canadian programming in a wide variety of categories. Private television broadcasters spend an increasing amount each year to acquire programming from Canadian independent producers, totalling $458 million in 27. Programming costs are offset by advertising and subscription revenues as part of an established business model. There is no predictable business model, however, when it comes to offsetting the costs to extend acquired content to new media platforms. Private Television: Expenditures on Independently Produced Programming ($ millions) $ millions PrivConv Pay and Specialty Source: CRTC. Canadian Association of Broadcasters 13

16 section 3 Broadcasting 28: Report on the Industry Through their licence fee commitments, private television broadcasters are the single largest source of financing for new Canadian independent television programs. These licence fee commitments are increasing each year. Private Television: Licence Fee Commitments ($ millions) $ millions Licence Fee Source: CFTPA. Radio Programming: Investing to the Tune of $4 Million Private radio broadcasters spent $41 million on programming in 27, an increase of almost $9 million since 23. Most of the expenditures were directed to Canadian programming. Private Radio: Programming Expenses ($ millions) $ millions Programming Expenses Source: CRTC. 14 Canadian Association of Broadcasters

17 section 3 Broadcasting 28: Report on the Industry Direct contributions by private radio broadcasters to individual projects and organizations to support the development of Canadian musical talent (or CCD Canadian Content Development) totalled $23.5 million in 27, an increase of over $5 million since 23. Private Radio: Contributions to CCD ($ millions) 25 2 $ millions CCD Source: CRTC. The Copyright Imbalance While private radio stations in Canada are commercially successful and continue to appeal to audiences, the business model is changing. Although radio copyright fees keep rising, tuning to music formats on radio has been declining, and the value of music to private radio has declined. The total hours tuned to music formats has declined from more than 43 million hours in 23 to slightly over 389 million in 27 a decrease of nearly 4% in five years. Tuning to low-music formats has, in the same period, grown 5%. 6 Furthermore, talk radio is becoming more prevalent. 7 At the same time, the cost of music has increased as the copyright burden for radio is greater than ever before. If the tariffs proposed by the copyright collectives are approved, private radio s copyright payments will have tripled in seven years. Annual increases in copyright fees have exceeded the rate of growth of radio revenues in recent years. For example, since 23, the compound annual growth rate of copyright fees has been almost twice that of private radio revenues (nearly 12% versus 6%). 6 Low-music formats in BBM Data Books include news/talk, sports, ethnic, religious and not classified categories. 7 In Fall 27 there were 42 talk format stations in Canada, an increase of 14% since Fall 23. Sources: CRTC Broadcasting Policy Monitoring Report 24; Communications Monitoring Report 28. Canadian Association of Broadcasters 15

18 section 3 Broadcasting 28: Report on the Industry Growth of Private Radio Revenues and Copyright Fees, , Index Basis (1998=1) Index (1998=1) Private Radio Revenues Total Copyright Fees Source: CAB calculations based on data from the CRTC and Statistics Canada. The radio industry recognizes the importance of paying fairly for the use of music. In fact, radio has been paying copyright royalties for more than 8 years and has also been providing significant support and value to the music industry through airplay, interviews, concert and other promotions. In addition, over the past five years, radio s contributions to CCD amounted to more than $1 million for the period Copyright payments, however, are increasing and multiplying to the point that they no longer reflect any form of fair value exchange between the radio and music industries. Commercial radio stations are now facing copyright tariff proposals from five copyright collectives (SOCAN, NRCC, CSI, AVLA/SOPROQ, and ArtistI) for 28 and beyond. 16 Canadian Association of Broadcasters

19 section 4 Broadcasting 28: Report on the Industry Canadians Benefit Whatever their language, their interests or locations, private broadcasters are deeply rooted in Canadian communities. This section will describe the many tangible contributions broadcasters make to our society, and the benefits Canadians derive from them. Committed to Communities In the past year, Canada s private broadcasters contributed $314.5 million to their local communities plus 23,252 volunteer hours through donations, audience pledges to charitable causes, public service announcements and volunteering. These commitments to corporate social responsibility are tangible examples of community leadership and involvement by private broadcasters. Private Broadcasters Community Contributions, 27-8 Type of Contribution total ($ millions) Value of PSA airtime $78.2 Corporate and station donations $14.2 Audience pledges $222.1 TOTAL $314.5 Plus: hours of time volunteered by private broadcasting employees 23,252 hours Source: CAB Member Survey, summer 28. Canadian Association of Broadcasters 17

20 section 4 Broadcasting 28: Report on the Industry Charitable organizations from coast to coast to coast have benefitted from private broadcasters active commitment to their communities. Numerous local and national causes as diverse as the United Way, local hospitals, food banks and animal shelthers were all supported by Canada s private broadcasters. Top Causes Supported by Private Broadcasters Top 1 Types of Causes Supported by PrivatE Broadcasters Monetary Contributions and Audience Pledges Hospital Societies/Foundations Canadian Cancer Society/provincial cancer societies United Way Children s Hospital Food Banks Breast Cancer Universities/Colleges SPCA/local humane societies Multiple Sclerosis Salvation Army Top 1 Types of Causes Supported by Private Broadcasters Airtime (PSAs) and Volunteer Hours Hospital Societies/Foundations Canadian Cancer Society/provincial cancer societies United Way Food Banks Multiple Sclerosis Breast Cancer SPCA/local humane societies Salvation Army Heart and Stroke Foundation Rotary Club Source: CAB Member Survey, summer 28. Some examples of the unique ways private radio and television broadcasters support their communities include the following: Stand Up Against Violence!, a national campaign spearheaded by the Family Channel for Bullying Awareness Week in November 27. PSAs and other on-air awareness and online initiatives, combined with local on-the-ground events, ran across Canada. The week culminated with a contest in which schools in Ottawa, Winnipeg and Victoria held a rally against bullying in schools; Newcap radio stations in Alberta made a $12, donation to the Whitecourt Community Band Association to assist the group in buying musical instruments for youth. In Saskatchewan, a Newcap radio station helped raise $3, to support a local child living with cancer; In the summer of 27, Nova Scotia radio station CJLS partnered with a local car dealer to provide a summer cruiser to attend virtually every community parade, picnic and festival possible; The four television stations of Télé Inter-Rives in Quebec provided some $2 million in airtime to promote local museums, arts and culture, heritage and environmental organizations in their communities; and This year, the Variety Show of Hearts Telethon on Global B.C. raised a record $7.57 million, and involved 2,5 volunteers and 11 Global News personalities over its 23-hour span, all in support of children with special needs. 18 Canadian Association of Broadcasters

21 section 4 Broadcasting 28: Report on the Industry Committed to Canadians As Canada s population evolves, Canada s private broadcasters continue to reflect the evolution. According to the last national census, more than 16% of Canada s population now identifies as non-white, while some 43% of people over age 65 report having a disability. Private broadcasters recognize the goodwill generated and see the commercial value in reflecting these realities, and in creating opportunities for diverse groups. In the past year, some of the industry s achievements have included the following: The launch of the new Equitable Portrayal Code addressing the depiction of Canadians in terms of race, national or ethnic origin, colour, religion, age, gender, sex, sexual orientation, marital status and physical or mental disability; Diversity seminars offered by the CAB to broadcasters at two regional conventions, providing information on the growing diversity of Canadian society, strategies to implement diversity best practices, and strategies to promote diversity initiatives in smaller, less diverse markets. Private broadcasters will begin reporting to the CRTC on their diversity initiatives early in 29; Télédiversité, an annual event organized by Quebec s French-language private television sector, focusing on opportunities for people of diverse ethno-cultural backgrounds to produce for, and work in, private broadcasting; Multilingual radio station CJSA in Ontario supported numerous causes that serve 22 language groups, including Tamil Language Week, South Asian Heritage Month and CARE Canada; Radio stations owned by Golden West in Manitoba, Saskatchewan and Alberta donated more than $2, to support the Canadian Museum for Human Rights, the Canadian Mennonite University and the Bethesda Foundation, among numerous other causes; Toronto urban music station The Flow 93.5 made donations totalling $1, to various local causes including the Black Business and Professional Association and the Ryerson Scholarship Fund; and Global Quebec held its second annual Chair Aware Challenge, an event combining fundraising with an awareness campaign for the Action Centre of Montreal. Two Global program hosts each spent a day in a wheelchair to promote the event. While This Morning Live produced a live show from the launch of the campaign, the Evening News produced five special reports on the campaign, featuring Montrealers taking the challenge and spending the day in a wheelchair. Going forward, Canada s private broadcasters will work with stakeholder communities to improve the quality and assure the quantity of closed-captioned content on television. In addition, the CAB will produce diversity webinars for members, designed to present the perspectives of diverse groups and strategies to implement best practices in cultural diversity. Through these and numerous other initiatives at a station level, private broadcasters will continue to show leadership and commitment in their communities, and to the Canadian community. Canadian Association of Broadcasters 19

22 conclusion The Canadian broadcasting industry is on the cusp of change. The share of tuning to private commercial radio and TV remains high. Beyond the traditional platforms, broadcasters are also performing strongly. The familiar brands are proving popular online and demonstrate that broadcasters are developing new and successful formats and content which engage their increasingly diverse audiences. The next challenge will be to improve return-on-investment in the face of new costs for content and copyright, major capital expenditures for the digital transition, and a soft economy. Since its inception, private broadcasting has been part of a social contract with policy-makers, regulators, and Canadian citizens. Conditions of licence and policy supports to rights-holders have imposed costs on broadcasters, but have at the same time helped ensure a strong private broadcasting sector. Periodically, broadcasters, regulators and policy-makers have reviewed this social contract to ensure obligations placed on broadcasters are reasonable, given broadcasters expected returns. In renewing the social contract in the coming year, we can be cautiously optimistic. We must all recognize the major economic, social and technological transformations that broadcasters face, and adjust policy and regulatory obligations appropriately. 2 Canadian Association of Broadcasters