Good Morning, I’m your live, local, powered by predictive AI morning host

Imagine a future where you wake up and turn on your favorite radio station and the first thing you hear is a computer generated voice greeting you with the Joey Tribbiani, “hey, how you doin’?”

It’s going to happen. Maybe sooner than we think. OK, maybe not Joey’s voice.

For the sceptics, think about this, if science can create the 30 minute rocket ride, a life saving vaccine for a pandemic in record time and atom slamming nuclear fusion, then you have to believe a robotic DJ is a low bar by comparison.

True, the ROI on creating a talking head that can introduce Taylor Swift and talk about what’s trending in your market, isn’t exactly venture capital drool worthy. Unlike aerospace, pharmaceuticals, medicine, communication and defense production investments, but the concept of Artificial Intelligence advances certainly is.

This recent major technology advancement news triggered my memory about something I started writing late last year when the CRTC released its much anticipated revised Commercial Radio policy on December 7. Those changes (or lack there of) now seem so insignificant when compared to discussions about the future of AI generated audio content.

When the CRTC review results came out, they were met with a resounding thumbs down by the industry, both colloquially on social media and officially by the Canadian Association of Broadcasters, (the industry’s lobbying group). It was said that very little had changed, (it hadn’t) and the speed in which it was conducted and delivered was painfully, almost punitively slow, (it was), and a waste of time. (seems like it).

Timeline: On January 28, 2020 (pre-pandemic) the regulator announced it was going to review the framework of commercial radio regulations, such as defining a musical selection, French vocal music and Canadian content quotas, music montages, peak listening hours, the hits policy for bilingual markets, emerging artists and other heady topics such as content and sub-content categories review, common ownership policies, local management agreements and local sales agreements, local programming, and most importantly and relevant, maintaining and enhancing linguistic duality in Canada!!! Important stuff here!!!! A review was last done to this degree in 1986!!! There had been changes over the years, like in 1991, (allowing FM stations to change music formats and drop foreground programming) and in 1999 (allowing consolidation in markets that led to the big corp radio era) and 2009 (dropping the non-hit rule everywhere but Ottawa and Montreal allowing gold hit based formats on FM). Each of those had much greater impact on the industry than this recent review. With respect to the length of time this took, COVID and a surprise election can be blamed for much of the delay but good news did not come to those who waited!!!

I reviewed a great deal of the public documentation on this initiative including the interventions and broadcaster and company responses and the CAB comments, being honest, I’m a lot less surprised and frustrated about the results than a lot of my colleagues were. I’m sure the expectations were high and perhaps the industry was hoping for much more, even a near dissolution of ALL the rules and regulations, instead, almost nothing of significance to help radio financially and to compete against unregulated music and spoken word platforms came about.

Being honest again, it didn’t seem to me that the industry made a big effort overall here. They did not collectively present a compelling case at all in terms of the perceived necessity to reduce CANCON levels. In fact, the CRTC presented evidence to the contrary, showing that Canadians actual LIKE Canadian music!!! Nor did the industry give any examples of quantifiable hardship for playing Canadian……either financially or from an audience size. For example, The New Hot 89.9 in Ottawa has been #1 in the market for over a decade and they have a 40% Canadian content quota. There’s zero chance they could or would make a case that they’d be even more successful in ratings and revenue if they didn’t have to play as much Canadian music.

There was no change to station consolidation rules. Meaning big companies still can’t own more than 4 stations (2AM/2FM was the rule, now it can be up to 3 FM’s) in a market, although flipping an existing AM to FM is possible in some cases, in the large markets, there simply are no decent frequencies available to do so. Also local marketing and sales agreements are still a no no. Cases can be made for consolidation and flips and other agreements in the future but suffice to say, this section was a bust too.

But why so? Why not more change? Well, was there much to change to help replace lost revenue on traditional media platforms? I don’t think so. Radio’s revenue model was, is and always will be advertising revenue. The industry has talked for years about finding “new revenue”, but that’s been a flop, save some success in digital revenue. But compared to Google and FB et al, it’s a train that long ago left the station and is laughable in its concept.

Perhaps the industry was duped in the “behind closed doors” winks and elbow gestures of the quid pro quo ideas and consultation. (Who knows what was discussed? “Lower Cancon and we’ll commit to playing more emerging artists”), I’m not sure, but honestly, it doesn’t matter. That, or memories are just too short. When you think back on what the CRTC has actually done for Private broadcasting in Canada, it’s not generally been favourable to licensee’s. It’s never been the CRTC’s mandate to make life easier or help find solutions for broadcast media or telcom companies. (Big or small) The extreme resource burden of regulation, both in the product creation (Radio and TV) and in the behind the scenes business side of broadcasting, (fees) is mind numbing. Accountants and suits get a lot of grief and blame for their roles when it comes to the boardroom decisions and operations (P&L patrols) and some of it is deserved, but OMG, there is a heavy price to pay to be a broadcaster in Canada.

To be 100% transparent, I believed (past tense) the investments required were 100% appropriate!! It should have cost a lot to be a broadcaster with 40% margins. Licenses were a privilege, not a right. (still are) Most ownership groups were family based and they took their responsibility seriously. Yes, there was an airwave monopoly for decades, but more ownership competition in each market, relatively speaking. It was wonderful for the listeners/viewers, owners and the people who worked in the business, myself included…..the best times of my life. The industry needed people to create programming and to operate stations. I’ve always maintained that radio, particularly FM radio was much more engaging in the content regulation days!! (I know right…is he nuts?”) Radio was expected to produce high quality and interesting programming. Music foreground shows, enriched spoken word, news and information and being live 24/7. (Radio was ALWAYS supposed to be more than just playing music). This, in exchange for the right to own the license and for the CRTC to not over license in Canada the way it was done in the United States.

But the times they were a changing! Once consolidation happened, it was all about scale for publicly traded companies. The goal was to own as many stations as possible, run them much tighter than they had been in the past (fewer people, marketing, promotion and capital expenses) and make the aggregate revenue and EBITDA numbers look good for the companies who bought them. The problem with that operating model, is it was still mostly the large markets that were contributing the significant revenue and profit for companies. And I mean impressive returns. The smaller markets became much less profitable. Relatively speaking. It was a downward spiral, less profit, more cuts, leading to even less revenue and profits and even more cuts. Today, there are dozens of small markets, with stations owned by the corps, that consist of an automation computer, and maybe (but not always) a live body doing mornings. So why even own them? Small market radio needs community leadership and content. Period. With both, small market radio was a great business to be in. Ask John Wright in Kingston.

Not to be confused with a cranky old guy lamenting the good old days, I’m very optimistic about radio when it’s done right. I see clearly, the successful stations in 2023 (large and small) and they all have a few things in common, they serve their local advertisers and markets well, have great on-air talent, community reputations and are very creative in their operating philosophies. Bravo!!! Keep up the good work everyone, you know who you are!!!!

I don’t know how long it will be until it’s commonplace for radio to have AI generated announcers, but, and this may not be popular, I think it’s better for radio to have voices and local content on 24/7, and when technology can make that credibly happen, I’m all for it. It won’t replace the great talent but overnights and weekends will be much more listenable versus what we offer now……music and splitters!!!

I hope I’m around to watch how the CRTC will “review” how AI announcers fit into the Canadian Broadcast system, but I’m betting they find a way to say it doesn’t!!!

It’s the most amazing time ever to be alive in terms of digital transformation but unfortunately and not unexpectedly, we’re also in pretty lousy times on earth and this wonderful technology takes most of the blame.

We have some kinks to work out.

I’m off to check my buggy whips stock.

Thanks for reading.

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