CRTC roundup: Deciding the future of TV

The CRTC continues to dominate be a footnote in the headlines as conventional television operators appear in two hearings – one for the CRTC itself in Gatineau to discuss license renewals, and another for a House committee in Ottawa to discuss the future of local television. And those discussions are heating up.

Last week, CTV and Global pressed their fee-for-carriage idea, where cable and satellite providers would be required to pay broadcasters to carry stations that already transmit their signals over the air for free. This would give broadcasters a $350-million lifeline, which is why they’re continuing to press for it even after having gotten rejected twice. They say local news simply can’t pay for itself, and it needs to be subsidized.

Even TQS jumped on board, despite the fact that it doesn’t produce local news.

Rogers, which owns CityTV and OMNI but gets much more of its revenue from its cable distributor, argued in front of MPs that CTV and Global were exaggerating their financial troubles to get a handout.

This week, Rogers repeated the accusation to the CRTC, saying the networks want money for local stations but also want to shut down small stations that don’t rake in money. It tempered that by saying that if the CRTC approves such an idea, it should be temporary until the recession goes away and a revenue goes back up. It also said fee-for-carriage means they shouldn’t be required to distribute conventional TV channels if broadcasters demand fees that are too high.

(This brings up an issue: Isn’t Rogers in a conflict of interest here? On one hand, OMNI and Citytv would benefit from additional fees, but Rogers is silencing those voices because the corporate parent has decided it would have more to lose from these fees through its cable provider than it would gain through its television stations. The same applies to Quebecor, which owns the TVA network and Videotron. In all, distributors showed revenues of $10 billion in 2008, with over $2 billion in profit.)

Pierre-Karl Péladeau, who speaks on behalf of TVA and Videotron, gave a more nuanced, have-your-cake-and-subsidize-it-too answer to MPs, saying fee-for-carriage should be allowed, but that the rates should be subject to negotiation between broadcaster and provider (no doubt the negotiations between TVA and Videotron would go amicably).

Leonard Asper of Canwest argued the problem is a regulatory system that allows distributors to flourish while broadcasters falter. He said debt and the recession are problems too, but they’re not the whole answer.

Ivan Fecan of CTVglobemedia said the Local Programming Improvement Fund, a special fund setup by the CRTC to subsidize local television stations in small markets, would need to be tripled, and that even then this would only protect the status quo and would not result in any increase in local programming. That angered Rogers and CRTC members.

CTV and Canwest also pointed out that cable and satellite providers are constantly increasing their rates without the “revolt” that the providers say would happen with a fee-for-carriage.

The Globe and Mail’s Grant Robertson, who has been covering this issue better than anyone, has a list of some of the issues that may come up in discussions about the future of television in Canada.

Why not just shut them down?

An interesting point was made in discussions of license renewals: If CTV and Global are so jealous of specialty television channels, why don’t they just become specialty channels?

It’s not quite so simple, but with 90% of Canadian television viewers having cable or satellite service, the added expense of setting up transmitters and local news stations isn’t worth the added viewership and ad revenue that comes with it. (Not to mention the cost of transitioning to digital television, which has caused broadcasters to decide to shut down dozens of retransmitters across the country.)

CRTC chairman Konrad von Finkenstein asked if CTV would prefer the specialty channel model to the conventional TV model. Conventional stations require a certain amount of local programming, while specialty channels are required to spend a certain percentage of their revenues on creating original programming. CTV suggested it would prefer the latter, though it wanted some recognition that having local stations is much more expensive than rerunning old Seinfeld episodes.

CRTC wants more transparency from big guns

The CRTC is seeking comment on new rules that would require large broadcasters and distributors to disclose more information about their finances than they currently do.

Currently, the CRTC collects lots of information but only releases “aggregate information” to the public. So we know how much all broadcasters spend on U.S. programming, but we don’t know how that breaks down per broadcaster or broadcasting unit.

Since broadcasters are arguing that they need more money because their business model is broken (and the distributors are arguing that the can’t spare fee-for-carriage payments without raising prices), it makes sense that they should let us see their books.

The CEP labour union certainly agrees with that reasoning.

Broadcasters want changes on the air too

In addition to fee-for-carriage, television broadcasters are asking for a relaxing of regulations about how much Canadian content they have to air and what kind of programming they must create. One of the proposed changes is to include reality programming in the list of “priority programming” (scripted comedies and drama shows) that the CRTC gives special attention to because it costs more to produce. This would go against the entire point of distinguishing expensive from cheap programming, and encourage private broadcasters to cancel expensive dramas in favour of cheaper reality shows.

Meanwhile, Bill Brioux wonders if CTV and Global will be reducing their big-budget U.S. programming purchases in light of their apparent financial woes.

StarChoice really dislikes CBC Regina

Last year, the CBC got all up in StarChoice’s face because of a decision by the satellite distributor to remove CBC Regina (CBKT) from its channel lineup. The CBC complained to the CRTC, saying that the removal meant StarChoice had more CTV channels than CBC channels, and this represented a violation of one of its conditions of license.

In November, the CRTC ruled that CTV’s main network and its A Channel network should be considered separately for the purposes of this rule, and that StarChoice was still in compliance. It dismissed the complaint.

But the CBC pressed on with its case, arguing that the CRTC got the numbers wrong and that even excluding the A Channel network, StarChoice has more CTV-owned stations than CBC-owned stations. These include CTV-branded stations as well as CJCH in Halifax (formerly ATV, rebranded as CTV Atlantic) and MCTV’s CICI (rebranded as CTV Northern Ontario).

What followed was a war of words betwen CBC and StarChoice, with the latter accusing the former of using incendiary language.

Now, StarChoice is asking for an exception to be made to its license to allow it to continue not distributing CBC Regina but still distribute all its CTV stations (including CTV Regina). I’m going to go out on a limb here and suggest the CBC will oppose this request.

In other news

6 thoughts on “CRTC roundup: Deciding the future of TV

  1. Dale Hallas

    Why should the likes of CTV and Global get a penny more from fee-for-carriage then? After they squander that money away, they’ll beg for something else, like tax breaks.

    It was their poor business practices that got them into this mess into the first place. If CTV really thought about the viewers, they would not have bought the rights to the HNIC theme from the CBC, and if Global thought about the viewers, they would have dedicated less money towards their speciality channels and more towards their failing OTA stations!!!

    Their poor decisions have gotten them into this mess, so quit asking for bailouts, and just go away already. We can watch what we want on US networks anyways without your repackaged material.

  2. Bhupinderjeet Rajani

    “Another new channel is Music India 2, which will feature Hindi-language music videos. Awesome.”

    You can say that again! I can’t wait to listen to those Bhangra beats and dance the night away while dreaming of those beautiful Bollywood babes.

    Fagstein, you should come over to my place so we can dance and dream together.

  3. Kahn

    I don’t even watch TV. Except for hockey games via the CBC or RDS websites… we’ll still get hockey, right?

  4. Pingback: Fagstein » CRTC Roundup: Videotron must closed-caption porn

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