hunts

Fox

Montreal: Broadcasters say the present zero-growth rate in revenues for private television in Canada will be further eroded if the crtc authorizes a national cable roll-out of the Fox Network. The Canadian Association of Broadcasters says the lower revenues for private broadcasters will also have a negative effect on Canadian programming expenditures and that the crtc should first hold policy hearings, as early as this fall, if Fox or any other new u.s. general-interest tv network is entrenched in the Canadian broadcasting system.

The private broadcasters say a rolled-out Fox Network could capture up to 5% of national viewing, putting an even colder damper on zero-growth advertising revenues and declining Canadian program spending.

‘The commission should not take steps to Americanize the system,’ says cab president Michael McCabe. ‘Its job is to provide viewers with strong Canadian choices, not more American choices.’

Forty-eight cable companies including Canada’s major cable operators, Maclean Hunter Cable TV, Shaw Cablesystems, Rogers Cable TV and Videotron Communications, have applied to the crtc to extend carriage of Fox to markets in Ottawa, London, Saskatoon, Calgary, Edmonton, Red Deer, Winnipeg and along the West Coast. Fox is already available in Toronto, Kitchener, Kingston, Vancouver and Victoria.

No room for Canadians

‘One of the things that really concerns me is that the cable companies want to add new u.s. channels but have no room for more Canadian specialty services,’ says McCabe.

He says crtc approval would render the commission’s 15-year-old ‘3+1’ policy ‘meaningless’.

‘It would represent a major shift in public policy. The 3+1 rule is vital to us. If they want to change it we should talk about compensation,’ he says.

Historically, the crtc’s 3+1 rule permits cable systems to carry all u.s. signals generally available over-the-air to the population in the franchise area. The rule forbids duplication of u.s. network signals, and if the microwaving of u.s. long-distance signals is involved, a total of not more than three u.s. commercial (abc, cbs, nbc) and one non-commercial (pbs) signals is permitted.

Harris Boyd, vice-president, communications at the Canadian Cable Television Association, which represents most of the country’s cable operators, says extending Fox’s signal ‘is simply a matter of equity.’

Fox has emerged as the defacto fourth u.s. network, and as for the 3+1 rule, Boyd says, ‘it certainly applied when we had only three (u.s.) networks.’

‘Priority’

Boyd says the new specialty channels ‘will be given priority’ and that cable ‘is on the front lines’ in dealing with subscribers.

‘Permission to extend Fox would make it a little easier to market lesser known services (the new specialty channels) with better known services (Fox). Awareness is always the big challenge,’ he says.

The ccta sees Fox as a ‘popular packaging partner’ available on extended basic, and marketed in time for the launch of the new English-language specialty services.

McCabe says ccta concerns over cable rate increases are unjustified and that ‘past hikes have never resulted in a decline in penetration.’

According to the cab’s submission to the crtc, there is no proof of wide-scale demand for Fox from subscribers because ‘virtually every top Fox program (The Simpsons, Beverly Hills 90210, Melrose Place, Models Inc.) is already made available by a Canadian broadcaster.’

This includes the rights to popular nfl football games which have been acquired by CanWest Global. The CanWest signal is broadcast on u.tv in Vancouver, WIC Western International Communications stations in Alberta, stv and cknd in Saskatchewan and Manitoba, Global Television in Ontario and mitv in the Atlantic region.

Boyd replies that CanWest’s signal is uneven across the country and not available in Quebec or Newfoundland.

McCabe says increased penetration by Fox in Canada will adversely affect the revenues of Canadian broadcasters and their investment in Canadian programming.

3%-10% share

Where Fox affiliates are distributed on cable they have already captured market shares in the 3% to 10% range, including a 4% share of adults 18-plus viewing in Vancouver and a 5% share in the Toronto extended market.

McCabe says cable’s application to extend Fox’s carriage comes at a time when total tv advertising revenues are flat.

Ad revenues declined 1.6% between 1992 and 1993, according to figures recently released by Statistics Canada, and the cab says this translates into a real decline of 3.3% across the board and a 2.6% drop in real terms for private conventional broadcasters.

The ccta’s Boyd says broadcasters can use simultaneous substitution where feasible, otherwise, he says, ‘there is not much (revenue) loss, really.’

‘If the consumer wants it and it doesn’t undermine the system, then why shouldn’t the consumer get it?’ Boyd asks.

A number of Fox affiliates already find a majority of their audience in Canada, says the cab.

A striking example is wutv in Buffalo, n.y.

Regionals

Increased penetration by wutv in Southern Ontario would put Fox in direct competition with Canadian broadcasters selling regionally, including Baton Broadcasting, Global Television, chch-tv, cfmt-tv, City-tv and the cbc, says the cab.

McCabe says wutv sees Toronto and Southern Ontario as its primary market, not Buffalo. The station is represented in Canada by Airtime Sales of Toronto.

Lower advertising rates from Fox affiliates and the regular rescheduling of programs in order to undermine simulcast frequency, add to the problem, he says.

The cab estimates wutv pulls in $8 million to $10 million in advertising revenues in Canada annually or about 3% of the $300 million in local and national tv ad revenues currently available in the extended Toronto market.

This added downward pressure on advertising revenues for private broadcasters is likely to have a negative impact on expenditures on Canadian programming if only because expenditures on Canadian programming and revenues for private broadcasters are directly linked by virtue of the crtc’s revenue formula.

According to Statistics Canada figures on Canadian program expenditures by private television between 1991 and 1993, spending on entertainment programs declined from $155.8 million in 1991 to $130.8 million in 1993. Overall Canadian program spending dropped from $459 million to $433.5 million during the same three-year period.

The cab says 3.3 million Canadian cable subscribers presently receive the Fox Network. The ccta says the figure is closer to four million and includes over-the-air reception.

Boyd says the ccta is hoping the crtc won’t hold public hearings on the issue and will make its decision known in about a month, in time for the Jan. 1, 1995 specialty channel launch and the new nfl fall season.

If cable’s application is allowed, Fox’s Canadian reach via cable would be expanded to approximately five million of the country’s eight million wired homes.