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Private broadcasters going for gold at CRTC
By  CMG  •  Posted on  October 1, 2006

Private broadcasters and cable companies are looking for less regulation in key areas, according to submissions to the CRTC on revising the regulator’s TV policy. But the conventional broadcasters, including CTV, CanWest Global, TVA Group, and CBC, are in disagreement with the specialty channels and cable companies over who should get access to fees from cable and satellite subscribers. The showdown will take place at public hearings in Ottawa at the end of November.

The conventional, or over-the-air, broadcasters want to start receiving a share of the fees to compensate for declining ad revenue.

The cable guys, including Rogers Communications and a coalition of independent channels that includes APTN, Alliance Atlantis Communications and Vision TV, say that hiking cable fees will mean more cable subscribers will opt out, especially from the discretionary services, meaning that specialty channels and cable providers will lose viewers and customers. Besides, they say, the conventional broadcasters don’t need the help.

“Despite much hype and hand-wringing over the years with respect to the potential impact of…technological threats…, the Canadian broadcasting industry has not only survived – it has prospered,” insists Rogers in its submission to the CRTC. In other words, don’t try to fish in our pond.

Both sides have a point. Yes, conventional private broadcasters continue to be very profitable. According to the CRTC, their collective profit margin in 2005 was certainly not disastrous at 11%. Of course, it is down from the 15% margin they made in 1999. Meanwhile, the pay and specialty services were wildly successful in 2005, collectively producing a profit margin of 31%, up from 14% in 1999.

In its submission to the CRTC, CBC points out that, in 2003-4, English-language private conventional stations together got as much as $364 million in “public preferences”– essentially grants, tax breaks and regulatory help, such as the right to sell their own ad space for the American shows they simulcast. For their part, specialty stations benefited to the tune of about $735 million from protections from competition provided by the CRTC licensing regime.

The situation for conventional broadcasters is suitably dire, according to CanWest Global, to require not only cash grab from cable and satellite subscribers. The company also wants to get rid of rules that limit advertising. And it wants carrots, not sticks, to prod broadcasters into providing Canadian programs.

According to CanWest, “broadcasters should not be forced to take on additional layers of regulatory obligations in instances where incentives could just as well produce desired outputs, especially in programming areas that are not economically feasible such as Canadian drama, and more and more, local news.”

Not surprisingly, the privates paper over the fact that it is actually public broadcasters that have suffered the most financially during the emergence of the 500-channel universe, even though they have the most potential when it comes to delivering Canadian programming when Canadians are watching.

In terms of “public preferences,” CBC-TV got $261 million in 2003-4 via the public broadcaster’s parliamentary appropriation, which is about one-third lower than it was in 1990. Remember, that’s the same year the private conventional and cable guys got more than $1 billion in public help. And TVOntario’s $45-million annual provincial grant was frozen for a decade and money for programming has actually been reduced over the last two years.

At the end of the day, the question is how to make sure the Canadian broadcasting system delivers on its obligation to serve the public interest.

The Canadian Media Guild argued in its submission to the CRTC that public television and tight Canadian programming requirements, including requirements for local news, are fundamental. We also proposed using a nominal increase in cable and satellite subscription fees of $1 to $2 per month to finance a Canadian Broadcaster Program Fund that would help public broadcasters increase news/current affairs, documentaries and kids and youth programming that runs without commercials. Some 40% of the Fund would also be available to private broadcasters– both conventional and specialty– who were prepared to make or commission and broadcast an amount of Canadian prime-time programming that is higher than their licence requirement. Click here to view the Guild’s full submission.

Karen Wirsig is the Guild’s Communications Co-ordinator.

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