Canadian Radio Stations under Financial Strain as Advertising Dries up due to COVID-19

Canadian radio stations are increasingly under financial strain due to declines in advertising revenue amidst the coronavirus pandemic. Cities shut down restaurants, bars, concert halls, and events, and many businesses closed, resulting in advertising drying up for radio stations.

Businesses Cutting Costs

Two major media companies in Quebec, La Presse and Cogeco Media already cut costs due to Covid-19. La Presse, which is a non-profit media, announced that 10 percent salary cuts will be introduced for both managers and unionized employees. Cogeco Media laid off ¼ of its employees or a total of 130 people. The media operates and owns 23 radio stations in Ontario and Quebec, among which FM93, Rythme 100.1, and 107.7 Estrie. The company also operates three subsidiaries, Cogeco Force Radio, Cogeco News, and Cogeco Force Media operates a network of radio stations while Cogeco News delivers content to over 40 independent stations. CN2i, a cooperative that owns 6 newspapers, also laid off more than 140 employees and suspended publishing.

Support by the Federal Government

With many radio stations under strain and facing financial difficulties, the federal government announced plans to buy advertising space and use it to inform people about the novel coronavirus. The government will provide $30 million to be used for an awareness advertising campaign that will support journalists and offer accurate and up-to-date information. The funding will go to Canadian media companies, including television stations, magazines, and newspapers. Between 2010 and 2015, the Conservative government spent over $70 million on advertising a year while since 2016, the Liberal government spent about $39 million. Advertising also moved toward Instagram, Twitter, Facebook, and other social media platforms and away from television and radio stations and newspapers and other print media. A source of concern is the fact that online platforms are owned by foreign businesses. A panel was also created to analyze whether media companies are eligible for tax measures, one being tax credit that allows them to claim up to ¼ of salaries and wages of employees.

Canadians Approve of Federal Support for Media

A report released by Nanos Research and Friends of Canadian Broadcasting reveals that for 2/3 of Canadians media company bankruptcies should be treated as an emergency. The majority of interviewed believe that funding is essential for media companies and will help prevent closures. The study also found that 62 percent of Canadians agree that by informing the general public journalists help keep people safe. This means that lay-offs and media bankruptcies should be treated as an emergency. Close to 75 percent of Canadians believe that traditional media outlets offer more accurate information than online platforms. Only 4 percent think that online media is more accurate, and 10 percent believe that it is as accurate as traditional media. In addition, 75 percent of respondents approve of federal support for media companies under financial strain as a measure to keep them afloat.

Major companies, however, warned that federal support is not sufficient to make a real difference. Mark Lever, President of SaltWire Network said that they may lose about 75 percent of their revenue due to closures and cancelations. SaltWire already laid off over 140 employees and suspended publishing on weekdays. Friends of Canadian Broadcasting Executive Director Daniel Bernhard said that he was skeptical about tax credit approvals and other support measures being implemented in a timely manner as to help media outlets experiencing financial difficulties.

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Why Don’t Canadian Cell Phone Carriers Allow FM Radio?

Activating the FM chip on a cell phone can virtually save lives during a disaster or emergency but the only option some users are left with is to use a radio app. According to National Campus and Community Radio Association Executive Director Barry Rooke, little financial incentive is the main reason for this. Bell, on the other hand, claims that Canadian policy is to blame for not allowing FM radio.

Why FM Radio Is Not Allowed

The main reason not to allow FM radio is that streaming data is what companies profit from. Some carriers, however, claim that a FM receiver is not a feature users would actually want. Yet, for many, it is clear that the real reason is that companies make money from streaming services such as Apple Music and Beats One. In the view of experts, pressure from users will eventually force carriers and manufacturers to activate FM chips.

Unlocking a Tuner

Users that have a speaker or wired headphones and NextRadio app can unlock the tuner. The app can be installed on Android 4.4 and up and has multiple capabilities that enable users to access recently played songs as well as song and artwork information, browse stations by frequency and genre, and check what is currently on air. Once the app is installed on a mobile device, users only need a wired speaker or headphones that act as an antenna. This is provided that the FM chip has been activated. Devices that come with an FM receiver include Studio G, Studio G GD, Dash L2, Pure XR, Diamond M, Grad 5.5.

Benefits for Users

Experts stress on the fact that users benefit in many ways, one being quick and easy access to local media. It is a helpful feature in times of prolonged or serious emergencies when telecommunication services, television, Internet, and power may not be available to inform the general public. FM radio helps the local authorities reach out and connect with communities. Experts note that cellular networks can fail as a result of damage or loss of power during an emergency such as a hurricane, earthquake, or tsunami. Data by NextRadio shows that when the 2016 earthquake affected Oklahoma, FM radio listeners increased by 340 percent. Not only this but station tune-ins increased by 180 percent and total listening minutes by 210 percent.

How to Prepare for an Emergency Situation

It is important to keep up to date with the latest information, including severe weather warnings and alerts. The tuner helps save the battery but it is a good idea to ensure that the device is fully charged if an emergency situation is likely to occur over the next couple of days.

Data and Figures

A report by the NABA FM chip working group shows that in 2016, only 15.8 percent of cell phones in Canada had a chip activated compared to 44.3 percent in the U.S. and 73.6 percent in Mexico. In Canada, the chip was not activated on 24.9 percent of phones that had it installed compared to just 5 percent in Mexico.