Rogers throws desperate hail-Mary with OMNI mandatory distribution request

Rogers calls it a “win-win solution”. But it would be just as accurate to describe it as a request for a government-imposed bailout of a private broadcaster whose business model has failed.

In an application that is being considered as part of Rogers’s TV licence renewals, the company has asked the CRTC to impose mandatory distribution of ethnic TV network OMNI across Canada, and to impose a fee of $0.12 per subscriber per month (which is the same as Canadians currently pay for CPAC).

This will give OMNI $14 million a year from subscribers, and in exchange Rogers has made several commitments related to programming:

  • 4 daily, national, 30 minute newscasts 7 days per week, in each of Italian, Mandarin, Cantonese (produced in Toronto with contributions from Vancouver and reporters in Montreal, Ottawa, Edmonton and Victoria) and Punjabi languages (produced in Vancouver with contributions from Toronto and reporters in Victoria, Edmonton, Ottawa, Montreal);
  • 6 daily, local 30 minute current affairs shows 5 days per week, in each of Mandarin, Punjabi and Cantonese language (produced in Toronto and Vancouver);
  • The creation of national cultural affairs series produced in Alberta that are designed to showcase important cultural and social contributions from Canada’s ethnocultural communities;
  • Original Canadian Scripted ethnic and/or third-language dramas and documentaries through a PNI commitment of 2.5%;
  • 10 hours of local independent production in Vancouver, Toronto and Alberta (Edmonton and Calgary combined) each week, measured on a monthly basis.
  • A commitment to devote 80% of OMNI Regional’s schedule to the exhibition of ethnic programming, while maintaining the requirement to devote 50% of the schedule to third-language programming;
  • A commitment to devote a minimum of 40% of OMNI Regional’s annual revenues to the production of Canadian programming;
  • A commitment to re-establish in-house production in all of the markets served by OMNI’s OTA stations;
  • The elimination of all U.S. “strip” programming that is not relevant to ethnic or third-language communities and a commitment to limit the amount of U.S. programming exhibited on OMNI Regional to a maximum of 10% of the schedule each month

A lot of this sounds good, but it also sounds a lot like just bringing back the services (like daily third-language newscasts) that OMNI cut recently as part of budget cutbacks, moves that its unions argued broke the spirit of its CRTC licence obligations.

The proposal is a bit complex. Rather than one national OMNI feed, the initial proposal called for three regional feeds, based on what OMNI stations broadcast in Vancouver, Alberta (Calgary and Edmonton have identical programming) and Toronto (which has two OMNI stations). Those living in Vancouver, Calgary, Edmonton and Toronto would still be able to watch OMNI for free over the air, but would also be required to pay 12 cents per month through their cable or satellite company.

To complicate it even further, Rogers amended the application earlier this month to include a fourth feed for Quebec, which would carry OMNI’s newscasts but also local programming from ICI, the independent ethnic station based in Montreal. The additional commitments for this channel include:

  • 3 hours of original local ethnic programming in French each week;
  • 1.5 hours of original French-language programming and a half-hour original English-language programming each week; and
  • 14 hours of original local independently produced programming each week.

The law

My initial reaction to this application was there’s no way it’s going to be approved. The commission set a high bar the last time it reviewed mandatory channels in 2013.

Under its policy, it will only invoke article 9(1)h of the Broadcasting Act, allowing it to force TV distributors to require all subscribers add a particular channel, when that channel meets the following criteria:

  • It makes an exceptional contribution to Canadian expression and reflects Canadian attitudes, opinions, ideas, values and artistic creativity;
  • It contributes, in an exceptional manner, to the overall objectives for the digital basic service and specifically contributes to one or more objectives of the Act, such as Canadian identity and cultural sovereignty; ethno-cultural diversity, including the special place of Aboriginal peoples in Canadian society; service to and the reflection and portrayal of persons with disabilities; or linguistic duality, including improved service to official language minority communities; and
  • It makes exceptional commitments to original, first-run Canadian programming in terms of exhibition and expenditures.

The commission has highlighted the word “exceptional” here, and has used lack of exceptionality to deny several applications for mandatory distribution.

Plus, there’s another complication. Asking TV distributors (and by extension their customers) to pay over-the-air TV stations (called “fee for carriage” or “value for signal” depending on what spin you want to put on it) has been discussed before. And in 2012 the Supreme Court weighed in on the matter, finding that the CRTC did not have the jurisdiction to impose this.

Does the fact that OMNI is ethnic somehow change the nature of this ruling? Or the fact that Rogers would be seeking mandatory carriage instead of negotiating deals with cable providers?

Tough choices

But just saying “no” wouldn’t solve the problem. OMNI is bleeding money, badly. CRTC data, which I can only get indirectly, suggest OMNI stations lost $33 million in 2014-15 on revenue of $24 million. When you’re spending more than twice the amount of money you’re bringing in, that’s a recipe for disaster.

Rogers states in its application that the OMNI business model has crumbled recently because their strategy of strip reruns of U.S. shows like Two and a Half Men and The Simpsons is no longer tenable in an era in which these programs are available on on-demand platforms like Netflix, both because viewers have a more convenient option for watching them and because their price has gone up as a result.

The application ends: “We believe this is the last opportunity for OMNI to adjust its business model so that its operations can become sustainable.”

The evidence points to that being true. Though Rogers did not state this explicitly, it seems very likely that without approval for this change, OMNI’s future could be in jeopardy. (Rogers did include separate licence amendment requests if the mandatory distribution request is denied, suggesting they’d at least be willing to try keeping it going.) “If this application for mandatory carriage as part of the basic service is denied, OMNI’s future viability is in question as we see no other long term solution other than our proposed national service and a new distribution model,” it writes.

If we assume that OMNI can’t survive without a de facto government bailout, the CRTC must decide whether ethnic over-the-air television in Canada is worth saving in its current form, or whether it should allow OMNI to die in the hope that someone else might take up the challenge. (Requests for new over-the-air television stations are virtually non-existent, but ICI presents a possible alternative — a family-run station that brokers programming using independent producers, running as more of a producers’ cooperative than a for-profit station.)

OMNI cutting its newscasts and replacing them with less expensive current affairs programming has made the case for bailing it out harder (even though a lot of those newscasts were mainly repurposing City News reports). But for many communities, particularly in Toronto, it remains a rare outlet for them to connect with their members.

The commission’s stuck between a rock and a hard place here. Say yes to OMNI’s demand, and you undercut the pick-and-pay policy you just started implementing, forcing people to pay for something they already get for free, and propping up a service that is already failing to meet people’s expectations. Say no, and OMNI risks going out of business, and you’ll be the one they blame for it. Ethnic communities across the country, but particularly in four of its largest cities, will lose access to programming that speaks specifically to them, and there’s no guarantee that someone else will come in and bring it back.

In the end, the debate could come down to a single, fundamental question: Is OMNI worth saving?

Comments on the OMNI application (which can be downloaded here), and licence renewals for OMNI and other Rogers television services, are being accepted until 8pm ET on Aug. 2 (it’s been extended to Aug. 15). Comments can be filed here (select application 2016-0377-0 for the OMNI mandatory distribution request). Note that all information submitted, including contact information, becomes part of the public record.

UPDATE (June 28): OMNI has launched a website to drum up public support for its application.

8 thoughts on “Rogers throws desperate hail-Mary with OMNI mandatory distribution request

  1. mike007

    What the cable industry is ignoring is that younger generation from ethnic minority know how to watch tv channel from overseas on the internet. To maintain a channel only for old people is a bad business decision unless they are siphoning money to other companies for “different services”.
    What I see is that all this ethnic shows are run by amateurs and quality is low.

    1. Fagstein Post author

      What the cable industry is ignoring is that younger generation from ethnic minority know how to watch tv channel from overseas on the internet.

      The cable companies are obviously well aware of this, and most offer dozens of foreign third-language channels. OMNI doesn’t pretend to be the only source for ethnic programming, but one of the few sources of local or Canadian programming for these groups.

      To maintain a channel only for old people is a bad business decision unless they are siphoning money to other companies for “different services”.

      I have no idea what this is supposed to mean. If anything, Rogers is “siphoning” money from its profitable operations to subsidize the continued operation of OMNI.

      1. S S

        Omni may be a source of local ethnic programming but realistically ethnic groups have do many choices with IPTV and signal over Internet from their homelands that they barely want to tune into an hour of programming each week or so. It’s not just omni other channels that carry ethnic programs (such as Joy TV and Vision or Chex) are finding hard to hold on to their independent producers.
        This is the unfortunate truth, times have changed and it’s hard to compete with the content from other countries.

      2. Hyacinth

        “maintain a channel only for old people” Over their 25 or so years of production, Omni’s demographics aged, and they did not start programming for younger immigrants – with Mandarin news being an exception.

  2. what!

    What we are talking about are 4 OTA stations O&O by Rogers for OMNI? Toronto (2 stations), Calgary (1 station), Vancouver (1 station). Plus a hand full of re-transmitters in Ottawa, London, Edmonton!

    I would suggest that Rogers shut all those OTA stations down since their business model is no longer working for them. Turn Omni into a single National feed, but function as a digital sub-channel, that other OTA stations can add it as a service. Much in the same way all those various sub-channels in the US operate (Movies!, MeTV, ThisTV, Comet TV, Bounce, WeatherNation, etc.)

    That way, 3rd language programming can be made available through OTA, but Rogers doesn’t have to operate full local OTA stations, nor re-transmitters. And in most cases, they can add it to their own CITY, O&O stations as a sub-channel as well. Just leave the local channels some ad time for local ads. That way, they can have some sort of incentive to carry it by having another revenue stream.

    Just offer Omni as either a 480p, or a 720p stream, and let local stations add it as a sub-channel. Voila, business model changed.

    1. Fagstein Post author

      Turn Omni into a single National feed, but function as a digital sub-channel, that other OTA stations can add it as a service.

      I suppose that’s a possibility, but it doesn’t provide OMNI with a new income stream, which is what it needs right now. If what you’re proposing would result in elimination of original programming, then I’m not sure how much better that would be than killing the network outright.


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