There’s been a lot of uproar since Bell Media applied to the CRTC seeking rather drastic relief on its conditions of licence for conventional television stations. But it would be a mistake to think this is just a Bell thing. Just about every major TV broadcaster, including the CBC, has recently asked the commission to give some relief or flexibility. Some of those requests are reasonable, even logical. Others are exceptional. But all of them have the same underlying purpose: finding ways to save money because of economic forces that are pushing people away from traditional television.
Here’s what they’re asking for.
First, to understand these requests, let’s explain what some of these terms mean.
- Local programming: Programming produced for a local station referring directly to the community and produced by the local station’s personnel or independent local producers. According to CRTC policy, English-language commercial TV stations are required to broadcast at least 14 hours a week in the five metropolitan markets (Toronto, Montreal, Vancouver, Calgary, Edmonton) and 7 hours a week in other markets, unless they have an exception through a condition of licence. French-language TV stations have case-by-case quotas, but with a guideline of five hours a week for stations outside Montreal. This programming does not have to specifically be news or current affairs, though most stations choose to meet this quota through newscasts or local morning shows. The quota can be met through repeats, which is why you often see the evening news repeated at 6am.
- Locally reflective news: When the CRTC renewed licences for the large TV broadcasters in 2017, it imposed new quotas on “locally reflective news”. It includes news that “relates specifically to the market a station is licensed to serve” and “portrays an onscreen image of the market” and “is produced by the station’s staff or by independent producers specifically for the station.” The quotas are both in terms of time (6 hours for the five metropolitan markets, 3 hours otherwise for English stations) and spending (11% of the group’s gross revenues for English stations and 5% for French stations).
- CPE (Canadian programming expenditures): TV broadcasters are required to spend a certain amount of their revenues on certified Canadian programming. (This can include things like news.) Generally, it’s 30% of revenues for English stations, and for French stations it varies but somewhere between 25% and 45%. The large broadcasting groups can pool their resources (except their news and sports channels) to meet this requirement, so they can spend more on, say, lifestyle shows on HGTV or CTV Life and less on other channels so long as the group spends 30% of its total revenues on Canadian programming.
- PNI (programs of national interest): In order to encourage broadcasters to not spend all their CPE funding on game shows and reality TV, a new requirement was placed requiring a certain amount of spending on what the CRTC calls “programs of national interest”, defined as including scripted drama, scripted comedy, long-form documentary and awards shows (from a list of those eligible). The amount varies by group based on what they historically spent on this, but is generally in the range of 5-10%.
What they want:
- Eliminate local programming quota for all stations (CTV, CTV2 and Noovo)
- Eliminate locally reflective news quotas (both airtime and spending) for those stations
- Reduce CPE quota to 20% from 30%
- Reduce PNI quota to 5% from 7.5%
- Expand PNI categories to include music programs, music videos, variety and game shows and reality TV
- In exchange for the above, require 100% of PNI expenditures go to an independent production company (up from 75% currently)
What they say: “The Canadian broadcasting industry is in crisis due in large part to a virtually unlimited array of foreign-owned digital media broadcasting undertakings (DMBUs) being present in the Canadian market for several years without any regulatory obligations. In addition, the growth of the Internet and digital advertising has siphoned billions of dollars in revenue away from traditional broadcasters; viewing to traditional television broadcasters has fallen; and broadcasting distribution undertakings (BDUs) are grappling with a corresponding drop in television subscribers.”
For more details on Bell’s application, see this post.
Application status: Comments are being accepted until July 24.
What they want:
- Reduce PNI quota to 5% from 8.5%
- Reduce CPE quota to 25% from 30%
- Discontinue a requirement to direct 0.17% of revenues to the music recording assistance funds
- Gain access to the Independent Local News Fund
What they say: The decision to administratively renew the licences beyond their term “ensures obligations that were based on now outdated market realities, and intended to be temporary, will remain in effect for at least two more years. It ensures we will continue to carry hundreds of millions of dollars in annual regulatory obligations without a formal opportunity to weigh in on their appropriateness.”
Analysis: Like Bell, Corus wants to reduce the big-budget items of CPE and PNI quotas. For PNI, the 5% represents what the CRTC had originally set it at in 2017, before the federal government stepped in and asked the commission to reconsider its decisions and impose higher quotas, which it did. This application therefore seeks to reconsider that quota again and essentially go against what the government wanted at the time.
The music requirement comes from the fact that Bell, Corus and Rogers no longer have music video channels — MuchMusic, CMT and others still exist but no longer broadcast music and therefore no longer pay music royalties to help fund that industry. In the decision instituting such a quota, the CRTC said it “considers that an expenditure requirement imposed on television licensees should constitute a temporary measure, until the end of their current licence term, to allow the music industry to adapt.” Since this requirement was supposed to expire anyway, it seems plausible the commission could agree to eliminate it now even if it doesn’t agree to lower other quotas.
Corus also notes that since the last licence renewal, it has shut down Sundance, Cosmopolitan TV, FYI, IFC Canada and BBC Canada, meaning their discretionary channel mix weighs more heavily toward lifestyle and reality TV channels like HGTV and Food Network and less toward scripted programming.
Application status: The comment period ended June 14. The CRTC received 11 interventions, all from within the industry.
What they want:
- Allow Citytv and other Rogers channels to include the following categories toward their PNI quota: analysis and interpretation, music and dance other than music video programs or clips, variety, game shows, general entertainment and human interest, and reality television.
- In exchange, require 100% of PNI funding go to independent producers, up from 75%
What they say: “The requirement to devote 5% of our annual gross revenues to expenditures solely on PNI has become unduly restrictive, and forces Rogers to fund programming that is not in keeping with its programming strategy; this in turn has a negative impact on our ability to finance expensive news and information programming.”
Analysis: Compared to Corus and Bell, Rogers’s requests are more moderate. And it targets one program in particular: Canada’s Got Talent.
“It is a unique forum in which aspiring Canadian talent from a wide range of artistic disciplines have an opportunity to perform in front of a national audience,” Rogers writes in its application. “It celebrates and showcases Canadian creative talent in all regions of the country and promotes Canadian achievements in the cultural, media and arts sectors. The contestants are artists with minimal professional success who are looking to increase their exposure and discoverability, and the show provides exposure to national audiences and the subsequent career-enhancing opportunities that brings.”
Rogers thinks so highly of CGT that it should be put on the same level as original dramas and documentaries. That’s an arguable point. Rogers definitely puts some money into the show, and it does support Canadian talent. But Canadian writers and actors don’t make money from CGT, and will have something to say about that. And Rogers is asking for a lot of other program categories to be included when it could have just carved out an exception for a competition series involving Canadian performance talent.
What they want:
- Eliminate 5% locally reflective news quota and all requirements for locally reflective news at its stations (6 hours per week at CFTM-DT Montreal, 3 hours and 30 minutes per week at CFCM-DT Quebec City, and 2 hours and 30 minutes per week at CHEM-DT Trois-Rivières, CHLT-DT Sherbrooke, CFER-DT Rimouski and CJPM-DT Saguenay)
- Eliminate quota for 25 hours per week of local programming at CFTM-DT Montreal
- Reduce local programming quota for CFCM-DT Quebec City to 16 hours per week from 18
- Eliminate a requirement for 5 hours and 30 minutes a week of local news in Quebec City, while maintaining a requirement to broadcast an equivalent amount of locally reflective programming for the region
- Eliminate a requirement for CFCM-DT to broadcast weekend newscasts
What they say: “Groupe TVA soumet que si le CRTC doit revoir les CDL (conditions de licence) imposées récemment à la SRC — puisqu’elles ne conviennent pas à un diffuseur public — il doit tout aussi rapidement, réviser celles imposées il y a maintenant plus de cinq ans à Groupe TVA — puisque ces CDL ne conviennent nullement à un diffuseur privé dans le contexte économique et concurrentiel actuel, et ne peuvent être imposées pour encore deux autres années.”
Analysis: Quebecor has two applications containing these requests. One related to weekend newscasts in Quebec City is very targeted, and seems reasonable, but Quebecor didn’t do itself any favours when it announced it was going ahead with cancelling the weekend newscast in Quebec City before the CRTC gave it permission to do so. Quebecor then decided, in response to a complaint from the union, to reverse its decision and maintain the weekend newscasts for now.
Had Quebecor not done so, the CRTC would probably have denied the application because it doesn’t permit you to change a licence condition you’re not meeting.
For the rest, the CRTC is probably not going to be eager to let go of the reins entirely on locally reflective news.
Application status: The comment periods for the licence amendment applications closed June 14 and July 4. A separate process sparked by a union complaint about the cancelled newscasts has been suspended in light of the reversal of Quebecor’s decision.
What they want:
- Exclude, from the calculation of expenditures for the purposes of establishing CPE and PNI quotas, money spent on production of the Olympic and Paralympic Games.
What they say: “Programming expenditures are significantly higher in Olympic and Paralympic years. … Their inclusion in the CPE results in a significant increase in the PNI expenditure requirements.”
Analysis: CBC doesn’t have a problem spending money on Canadian content. Its issue is more practical. The Olympics are expensive and represent a nontrivial part of its budget. And because almost all its Olympic coverage qualifies as Canadian content, and because PNI is established as a percentage of CPE spending (unlike for private broadcasters where it’s a percentage of revenues), that bump in spending creates an increase in PNI requirements. But the Olympics do not qualify as PNI, so that money needs to be spent elsewhere.
On top of that, the CBC argues the CRTC set its PNI quota based on three broadcast years that included only one Olympics (the 2018 PyeongChang winter games), and skews the numbers to the point where it will be unable to meet its PNI quota.
What they want:
- Replace APTN’s four-feed offering (APTN East, APTN West, APTN North, APTN HD) with two HD feeds: one with English and French programming, and another with programming 94% in Indigenous languages
- Increase APTN’s per-subscriber mandatory subscription fee to $0.38 per month from $0.35
- Require TV providers to carry and distribute both channels
What they say: “This broadcast feed will provide more hours of Indigenous-language content in more languages on a national scale than APTN has been able to deliver in the past: a minimum of 100 hours of Indigenous-language programming per ‘broadcast’ week and 20 hours based on a 24-hour day.”
Analysis: APTN’s feed structure is unusual, a relic of old times when HD was a fancy new thing that needed a separate channel. It causes some confusion, especially because someone who gets APTN East and APTN HD gets different channels with different programs when they’re used to someone’s SD and HD channels being the same. Consolidating into two HD channels makes sense, though it does mean no more regionalization.
And who can be against more Indigenous-language content?
But the increase to the per-subscriber rate may be contentious. TV providers are already subject to price controls, and already have to spend some of that money on obligatory wholesale costs for mandatory channels like APTN, CPAC, AMI, The Weather Network etc. Offering more Indigenous-language content is a way of softening the blow of asking for more money.
TV5 tried this kind of thing successfully, promising a new channel called Unis with content from francophones outside Quebec in exchange for mandatory subscriptions from all Canadians for both channels. Unis broadcasts some of that minority-language content, but mixed in with reruns of Watatatow and Dans une galaxie près de chez vous.
UPDATE (July 11): Some of the applications listed above are so similar the CRTC is considering a request by public interest groups to merge them into a single proceeding.