How the CRTC screwed over community television to save local news

It’s a new dawn in local television. CTV Montreal has a new 5pm weekday newscast, City Montreal is preparing to launch evening news at 6pm and 11pm, and ICI is getting an infusion of cash thanks to OMNI’s successful bid for mandatory distribution at 12 cents per month per subscriber.

It’s a big enough change that I was asked to write about it for the Montreal Gazette. That story leads Saturday’s Culture section.

But while the new investments are great news for people who like local television (and, indirectly, people like me who like writing about it), there’s a big loser in this that isn’t getting discussed much: community television. The additional money going into local news is coming straight out of their pockets.

Let’s not talk TV

When the CRTC announced it was undertaking a long consultation process it called Let’s Talk TV, proponents of non-profit community television were excited about the prospect of finally bringing their issues to the forefront. A complaint from the independent group ICTV against Videotron’s community channel was in progress (the commission would later find that MAtv had failed to respect its licence conditions in terms of giving enough access to people from the community). And there was a growing opinion that community channels were not fulfilling their mandate.

The Canadian Association of Community Television Users and Stations and other groups filed complaints about other television providers that they felt were doing the same things to their community channels, ignoring their commitments to community access and using their funds to produce professional broadcasts and give side jobs to people affiliated with the company.

But the Let’s Talk TV process didn’t talk much about community television, and when it led to its first decisions in January 2015, the commission decided to kick the can down the road on community television, announcing it would begin a separate process to consider that. And that process would also include discussions of local news.

As expected, a review of the community television process was hijacked by discussions of local commercial television. People were more concerned about whether their local station would stay on the air or how long their local newscast would be than how their local Rogers TV or Shaw TV would be funded.

And the complaints about community channels still haven’t been properly evaluated, years later. That will happen at a hearing on the renewals of their licences, scheduled for October.

Provider TV

Let’s step back a bit and look at what community television is and has become in Canada.

Since 1971, the CRTC has required cable television providers to support community channels. Back then, television equipment was very expensive, very large and hard to obtain and operate. Community access was the only way many people could see themselves on television and communicate with the public through video. Cable companies would set up studios at their head ends and let people from the community broadcast on a special channel they set up.

Since the turn of the millennium, the situation has changed. Getting access to equipment isn’t the biggest problem — as the CRTC says, “many Canadians now carry an HD camera in their pocket in the form of their smartphone” — editing can be done on a home computer, and distribution is much easier thanks to YouTube and other free online services.

Instead, over the past decade, the issue has been more about money.

All cable television providers are required to spend 5% of their gross revenues on Canadian programming, but most are allowed to redirect some of that money to a community channel rather than simply hand it over to a fund like the Canada Media Fund. Most large terrestrial television providers do this because it allows them to keep control of that money, create a service that’s seen to do a public good, and provide added value for subscribers.

Critics might point out some other benefits, such as billing yourself for Internet access and providing side jobs for your employees. (The CRTC limits such overhead costs, but there isn’t a bright line that says you can’t be a supplier to your own community channel.)

Since 1991, the amount of money allowed to be redirected to community channels has been capped at 2% of gross revenues. Though there were many exceptions (small cable companies could devote the full 5% to a community channel, and companies that offered community channels in each official language could devote 2% to each one).

It might not seem like much, but when you have more than a million subscribers paying more than $50 a month, that’s a million dollars a month right there going to community TV.

As budgets for community TV grew, and technology advanced, they started to get more ambitious in terms of programming. Some even started broadcasting professional sports until the CRTC put a stop to that. (The ban doesn’t affect junior sports, and many junior hockey league matches are still broadcast on community channels.)

Community television is in an odd place because on the one hand it’s supposed to be volunteer-driven but on the other hand it’s required to spend money on programming. The pressure has always been there to keep the cable-access stuff to a minimum so more popular professional-looking programming can entice people to buy or keep their cable subscriptions.

And there was the added benefit of using community channel money to benefit related productions and personalities. Bell’s TV1 had shows linked to The Amazing Race Canada, the Much Music Video Awards, the Montreal Canadiens, The Social and eTalk. Videotron’s MAtv had side projects for such Quebecor personalities as Sophie Durocher, Louise Deschâtelets and Dominic Arpin.

This is a big part of the reason why CACTUS and others wanted community television taken out of the hands of big cable providers and put into the hands of non-profit community groups. But the CRTC has repeatedly resisted that effort, believing that the cable companies have the best resources available to provide high-quality community programming on a sustainable basis.

“Flexibility”

In 2010, the commission decided to freeze contributions to community channels. It found that the amount of money going to community television had almost doubled in a decade, and “although the Commission acknowledges that various metrics can be used to evaluate the success of community channels, it nonetheless considers that overall viewing to community channels remains modest relative to the growth in contributions to this sector.” Rather than cut the funding down, though, it decided to freeze it. Existing television providers would be capped at their 2010 levels until those dropped to 1.5% of revenues, and then they would stay at 1.5%.

In June 2016, the CRTC released its new policy on local and community television. There, it cut the contribution from 2% to 1.5%.

But the bigger blow was their decision to allow distributors the “flexibility” to redirect funds from community channels to their affiliated local stations to spend on local programming. For Canada’s five largest cities (Toronto, Montreal, Vancouver, Calgary and Edmonton), that redirection could be 100%, since the CRTC believed that people in those areas “have access to many media sources on television and radio, as well as online and in print, that provide community reflection.” For smaller areas, at least 50% of that money would still need to be spent on community television.

By the CRTC’s estimate, $65 million a year could be redirected from community channels to local stations owned by the major vertically integrated companies.

But what about independent stations? Where do they get additional money?

To help out most of them, there was already a fund called the Small Market Local Production Fund, funded by Canada’s satellite TV providers. The CRTC transformed that into the Independent Local News Fund, adjusted its admission criteria to include larger-market stations like CHCH in Hamilton and the V stations in Quebec and Montreal (while excluding small-market stations owned by the media giants), and required cable companies to contribute into the fund. Everyone kicks in 0.3% of revenues to support independent stations.

So in the end, all independent stations get extra money from this fund, and non-independent stations get funded through TV providers who share the same owner.

News pro quo

In exchange for the extra money, there were new requirements for local stations:

  • In addition to the amount of local programming they have to air each week (still set at 14 hours for major-market stations and 7 hours for smaller ones, with some exceptions), they must air a certain amount of locally reflective news programming as well — six hours in large markets, three in smaller ones.
  • There’s also a financial requirement for investment in local news: 11% of gross revenues for local television stations must be devoted to locally reflective news. (This number, proposed by the three English networks, is based on previous spending on local news.)

For community stations, even though they got less money, there were stricter regulations imposed to ensure that the money they did get was spent correctly:

  • Starting this year, cable companies must spend 60% of their community channel allocations on direct programming expenses. That rises in increments and reaches 75% after 2020.
  • Diverse citizen advisory committees are required in Canada’s five largest markets.
  • Rules on what qualifies as access programming have been tightened to stress that the community member that initiates a project must have creative control, and “is neither employed by a (TV provider) nor a media professional who is known to the public or who already has access to the broadcasting system.” They also can’t profit from the show (by turning it into a de facto infomercial for their business, for example).

The changes took effect on Sept. 1 after being formally approved as amendments to the regulations and enshrined in TV stations’ conditions of licence.

But most companies didn’t wait that long to make major changes:

  • Rogers closed some Rogers TV community stations and cut back at others in the greater Toronto area.
  • Shaw closed Shaw TV in Vancouver, Calgary and Edmonton, eliminating 70 positions and sending $10 million to Global TV stations.
  • Videotron cut the budget of MAtv by 25%, reflecting the drop of the maximum deduction from 2% to 1.5%. (There hasn’t been an announcement of any redirection of funds to TVA stations.) The cuts meant the cancellation of Montreal Billboard, a weekly series featuring interviews with local community groups. MAtv director Steve Desgagné told me the decision to cut that program was strictly budgetary.
  • Bell made serious cuts at its TV1 community channels, which operate in Toronto, Ottawa, Montreal and Quebec City. It declined to provide specifics when I asked.

The result

It’s hard to evaluate the impact on community television by looking at programming, because much of that programming is short-term projects. But you can expect less programming, and especially less of the non-access local programming produced directly by the cable companies, particularly in the larger markets, as a result of these changes.

On the TV side, Bell’s CTV and Rogers’s City have both announced new expansions of local news, both to make use of these new funds and to meet the new locally reflective news requirements. Global has been non-specific about how it’s using the additional money.

What definitely won’t change is the strongly held belief among supporters of community television that cable access needs to be less cable and more access.

8 thoughts on “How the CRTC screwed over community television to save local news

  1. Deborah Angrave

    I am Community Producer and Mentor who was directly affected by the closure of the Shaw Vancouver Studio in 2017. During the 80’s and 90’s, I was a Producer @ Rogers Community TV in Toronto and Vancouver until laid off after the Rogers/Shaw asset swap in 2000.
    There had been 10 Neighbourhood TV offices, some with studios, throughout the Lower Mainland of BC. After that one studio remained.
    By that time, the loss was not so much the access to equipment, although studio access was invaluable, it was having a consistent voice for local issues and ideas apart from the mainstream ‘conflict’ reporting that dominates news. We are/were the canaries in the mine. Often initiating stories and issues long before ‘mainstream’ media was interested. I remember covering a CRTC hearing in the 80’s where a broadcast News Director stated that he wasn’t interested in loss of fish stocks and the devastating effect on coastal communities unless there was gunfire in Georgia Strait. The Community channel covered these stories for years before it became ‘an issue’ that mainstream media thought was worthy of broadcast. (Although we worked with Reporters who tried in vain to get their channels or newspapers to air or print these stories. They knew the value)
    Eyeballs are what counted and leaving that to bean counters to guess what might ‘hit’ left many local human interest stories and profiles of community initiatives to Community TV and newspapers. We also lost the extremely important aspect of community building. The bringing together of diverse individuals and groups around local issues and events. We built crews while developing skills, areas of common interest and long terms friendships; created archives of stories that resonate years later.
    We gave countless hours of access (24/7) to train community members how to tell their stories, gathering individuals and making them into crews while building momentum. They presented their communities with their personal stories, and over over time, we could document their points of view, see change and gain a better understanding of what was being faced.
    For instance, Rogers Toronto Studio on Adelaide was the site of the first gay and lesbian series in the late 70’s/early 80’s; First Nation stories were produced in the Vancouver Studio in the late 80’s relating the experiences of the residential school; forestry practices were discussed between companies and environmentalists on the same set while protests were being held in the forests; approaches to education were debated; affordable housing concerns were raised; harm reduction practises introduced – all these stories were initiated and have been carried on local community channels for years.
    Community channels then formed alliances with local media and we co-produced stories. Local film & TV Producers, many of whom had trained at local community offices, produced their first trailers and pilots with us to launch their specialty channel, broadcast and film careers. Then they hired volunteers they had crewed with. Many volunteers went onto become staff at community channels, broadcasters, and went onto to work with production and film companies. Many of the crew are still in touch after 30 years and still help and support each other. We built vast networks of contacts; gave profile to many presenters (before TED), small business people; politicians and lit up issues so they could be brought to broader platforms.
    Storytelling is a powerful tool and the community productions were, and still are, the long term archive of many stories of communities in Canada. During the 90’s, the Rogers Vancouver Studio alone had over 200 volunteers and produced over 60 hours of original programming a month. At that time the camera gear was ‘broadcast quality’ and we co-produced some programming with local broadcasters that was distributed provincially, nationally and internationally. We were a critical step between so called ‘amateur’ (non paid) production and professional.
    Posting on-line is fine but access to crew, consistent training and mentoring to develop and grow is the true loss. A few remain committed (for instance Valemount, Tri-Cities, ACCESS TV in Vancouver, New Westminster) and are an integral part of an efficient system of local story production, skill and community building in Canada.

    Reply
  2. dilbert

    Let’s be fair here. The real story is how the CRTC has shut down one money dodge (big contributions to community TV that actually isn’t really community TV very often) and replaced it with another dodge (artificially propped up local news).

    The real news is that Bell, Rogers, and Shaw all claim to be losing their asses on TV, yet make collectively billions of profit a year overall. If TV was so bad for the bottom line, they would be selling instead of buying. The CRTC seems to be willing to accept the stories about losing all sorts of money, while ignoring the overall corporate profits made in the media world by these very same companies. Generally that money is made by selling content to the TV stations or distributing it after the fact. Hmm.

    It’s all just smoke and mirrors.

    Reply
    1. Fagstein Post author

      The real news is that Bell, Rogers, and Shaw all claim to be losing their asses on TV, yet make collectively billions of profit a year overall.

      According to CRTC figures, total profit from television for the Big Four Canadian broadcasters comes to just a bit under a billion dollars a year. And none of those four companies (which also includes Quebecor) is claiming to be losing money on TV overall.

      If TV was so bad for the bottom line, they would be selling instead of buying.

      The last time a conventional television station was individually bought by one of these companies was when Rogers bought CJNT Montreal in 2013. Besides that, TV stations are only being sold as part of larger transactions. CTV tried to sell TV stations for a dollar in 2009, but no one stepped in to buy them up.

      The CRTC seems to be willing to accept the stories about losing all sorts of money, while ignoring the overall corporate profits made in the media world by these very same companies.

      The CRTC is well aware of this, but owning specialty channels doesn’t suddenly make local newscasts profitable. If it says “well, tough” then the big networks might just turn in their conventional television licenses (except maybe in Toronto) and stick with cable channels. These latest changes don’t fix the conventional television business model, but it gives it a bit of a financial boost at least.

      Reply
      1. dilbert

        Their claim is that they are losing money (or not making) on local TV, and even not really making out on running the networks. It’s the reasons why they keep cutting staff , merging operations, and trying to centralize most of the production in a single place. You have discussed this repeatedly here.

        “. CTV tried to sell TV stations for a dollar in 2009, but no one stepped in to buy them up.”

        Yes, this is true. Nobody wants to buy them (unless they are part of the big four and not maxed out in an area) because of the way the big four have manipulated the CRTC over the last couple of decades. The system is tilted now that the money is made mostly on the distribution (being a cable, sat, or IPtv company), and not on the actual operations. For the longest time the money was made creating relatively low value specialty channels and them forcing them into packages, so that the channels could collect subscriber fees and pay back the mothership for programming.

        “The CRTC is well aware of this, but owning specialty channels doesn’t suddenly make local newscasts profitable. ”

        Specialty channels are only profitable because the same companies are also the distributors and have no problem loading more and more channels onto their grids and into their packages. This has artificially made the specialty channels profitable. Local news could be profitable, but not as profitable as re-using the same programming for dozens of cable channels.

        If the networks were operated separately from the distribution networks, things would be very different. The local channels would almost certainly be seeing a higher percentage of the basic fees charged by cable and sat to carry their stations, they would be fighting for it and wouldn’t have rolled over like CTV and it’s “affiliates” have done for the last 20 years. The money isn’t what it should be.

        “These latest changes don’t fix the conventional television business model, but it gives it a bit of a financial boost at least.”

        until you change the ownership structures and remove the extreme vertical integration, it won’t get fixed. It’s just a series of bandaids over a gaping wound.

        Reply
        1. Fagstein Post author

          The system is tilted now that the money is made mostly on the distribution (being a cable, sat, or IPtv company), and not on the actual operations.

          This is undoubtedly true, though probably won’t be for long. Cord-cutting hitting critical mass is on the horizon.

          Specialty channels are only profitable because the same companies are also the distributors and have no problem loading more and more channels onto their grids and into their packages.

          Setting aside the fact that there are several distributors like Cogeco, Telus and Eastlink that don’t have TV networks, the CRTC has several limits to prevent vertically integrated companies from carrying too many of their own channels or treating them preferably to those of competitors.

          If the networks were operated separately from the distribution networks, things would be very different. The local channels would almost certainly be seeing a higher percentage of the basic fees charged by cable and sat to carry their stations, they would be fighting for it and wouldn’t have rolled over like CTV and it’s “affiliates” have done for the last 20 years.

          They tried that in 2009, before Bell bought CTV and Shaw bought Canwest. The Local TV Matters campaign called for fees for local stations. Unfortunately the courts found that the CRTC did not have the authority to impose such fees and the issue died there. If those takeovers hadn’t happened, Global might have been shut down or broken apart. There was certainly no financial paradise on the horizon.

          Reply
          1. dilbert

            “This is undoubtedly true, though probably won’t be for long. Cord-cutting hitting critical mass is on the horizon.”

            Cord cutting is actually one of the biggest misnomers I have ever seen. People are dropping “cable” and instead pumping up their internet connection (paying more) and subscribing to online services (a different form of cable). More and more, they are turning back towards over the air TV. That shifts the money around, but it doesn’t take the stuff out of the game. Interestingly, it may make the local channels more valuable over time.

            ” the CRTC has several limits to prevent vertically integrated companies from carrying too many of their own channels or treating them preferably to those of competitors.”

            Actually, it’s one of the biggest problems of the whole situation in Canada. It’s become a sort of form of coop-etition. The rule are what has provided the power to the suction pump that has been pulling the money out of local TV and pushing it to the network level, and on to the specialty channels. With CanCaon requirements, channel ratios, and forced packaging the distribution end has raked in billions from Canadian consumers – but have left the local channels barren, with very small staff counts and in many cases not even the ability to put anything directly to air by themselves anymore. The CRTC rules defined the playing field, and local TV ended up under water.

            “Unfortunately the courts found that the CRTC did not have the authority to impose such fees and the issue died there.”

            That is where it becomes an issue for Ottawa to deal with, to actually enact legislation that more equitably balances the landscape.

            Reply
  3. Brett

    If only it where like the US and Canada had more affiliate stations then network owned. Maybe then would owners really care about local programming.

    It seems that network owned stations only care about making money. They don’t seem to care about local programming. If it where local owners owning local stations the maybe these more people would watch because of local contact.

    Though I don’t see any of the big networks selling or adding new affiliates.

    Reply
    1. Fagstein Post author

      If only it where like the US and Canada had more affiliate stations then network owned. Maybe then would owners really care about local programming.

      Maybe. But are the stations in Lloydminster, Abitibi and Medicine Hat really that much more local than CTV Edmonton or Global Regina?

      Reply

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