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Blowing up the system to save it

Canada's digitally savvy Heritage Minister Mélanie Joly wants to yank the country's media business into the twenty-first century. But as Simon Houpt writes, digital disruption has a way of outpacing government policy

If you're in downtown Toronto these days, it's hard to avoid running into Lilly Singh. Last fall, YouTube signed the Scarborough-based comic known as Superwoman to be one of its official faces. So here she is, staring out bug-eyed from a bus-shelter ad for the Google-owned video-sharing service, and shrink-wrapped on a Spadina streetcar, floating above the boast: "+8,110,121 FANS."

You see those ads, and you wonder if executives are gnashing their teeth over at the Queen Street West headquarters of Bell Media. Four years ago, when the parent company of CTV was taking its first run at buying the specialty-TV player Astral Media, Bell told regulators and interest groups that the purchase would help them create a Canadian star system: dozens of TV channels and more than 100 radio stations, working in lockstep to promote Bell's shows and on-air talent.

But if that era of star-making-by-colossus hasn't yet evaporated, it seems quaint next to the success of someone such as Ms. Singh, who started making videos in her parents' basement six years ago, leveraged her online fan base into a 27-city world tour last year and decamped to Los Angeles in December: just another Canadian lost to Hollywood and its promise of riches and scale.

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This weekend, Canada's rookie Heritage Minister, Mélanie Joly, wants us all to imagine ourselves as the next Lilly Singh, or at least ask why we're not making more Orphan Blacks, the addictive drama made in Toronto and acclaimed around the world.

In an interview with my Parliament Hill colleague Daniel Leblanc, Ms. Joly declares that "everything is on the table" in a potential overhaul of the laws that govern the industry, the agencies that facilitate and export and encourage the "discovery" of its content in a bottomless sea of media, and even the sort of businesses in which the government might intervene. She notes that the Broadcasting Act, the primary piece of administrative law overseeing the cosseted Canadian media ecosystem, was last updated in 1991. (For reference, that's the year Tim Berners-Lee created the first web page; it took almost another decade before TiVo introduced television viewers to the pause-and-start magic of home digital video recorders.)

Ms. Joly is kicking things off with a discussion paper declaring that she and her Heritage colleagues will consult with Canadians about "information and entertainment content as presented in television, radio, film, digital media and platforms, video games, music, books, newspapers and magazines."

It's a move fraught with risk and opportunity. Ms. Joly could have simply fulfilled the Liberal campaign promise of more money for the CBC, National Film Board and Telefilm Canada and then taken her phone off the hook. But, as a digital native who lives on her iPhone (and who has seen her boss, Justin Trudeau, savvily use the unregulated platforms of social media to connect directly with voters), she recognizes that the sector urgently needs attention as much as it does money, especially after the previous government's posture toward culture vacillated for years between neglect and open hostility.

In floating the idea of blowing up the entire system, Ms. Joly is trying to get ahead of the disruptive forces that are straining creators and broadcasters alike, even as they hold enormous promise for consumers. But the recent history of technological disruptions – from Uber to the Arab Spring – has shown how easily governments can crumple. How will the Liberals hold that tiger by the tail?

Canadian broadcasting has lived almost its entire life under the protection and encouragement of the government. In 1930, with American radio waves flooding in across our border, the journalist, executive and diplomat Graham Spry told an official commission that the country had a simple choice to make: We could get our media from "the state or the United States." Two years later, the federal government created a forerunner to the CBC.

But it's 2016, you say; time to open ourselves to the world. The very first policy statement in the Broadcasting Act (1991) declares: "The Canadian broadcasting system shall be effectively owned and controlled by Canadians." Eliminating that rule would open the door to a potential flood of direct foreign investment for private corporations, immediately boosting the value of their assets. (Even the Postmedia newspaper chain, which has been limited by government policy in its desire to access significant amounts of foreign capital, may live to see another day.)

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So what happens then? You could imagine a sharp split in which the public broadcasters are fully subsidized and fully Canadian and prevented from selling advertising, and the privately owned TV networks are relieved of their Cancon obligations and free to seek foreign investment. Maybe Bell Media sells off its money-losing CTV2 network to CBS Corp., which creates CBS Canada and decides to keep all of its shows that are currently airing on Global (Supergirl, Limitless, NCIS etc.) for itself.

Ideally, of course, Global would respond by going all-in on distinctive Canadian programming. We would see more of ourselves on screen, producers would export those shows to the world, and Canada would finally claim its place in the Golden Age of Television. But with few exceptions, Canadian broadcasters don't have those skills. It's not their specialty, nor their business model. They've been cautious programmers because risks haven't been rewarded. (For the record, Canadian producers do export many programs; but the extra revenue is rarely worth much because the shows don't have the brand cachet of Hollywood-made product.)

There will be a crush to end quotas, both on radio and TV. People will point to all of the Canadian music acts that have conquered the world over the past three decades and say that quotas only make sense in media environments characterized by scarcity. But terrestrial radio has proved impressively resilient and Canadian music acts are still being discovered there. True, the bands aren't making any money from sales of their music. But they could always play backup on Lilly Singh's next tour.

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