I am having a head-scratching bit of déjà vu here. Wasn’t it just over a year ago that the conventional networks were hitting up the CRTC for fee-for-carriage? And here we are again; every hotel suite in Ottawa-Gatineau filled, early morning and early evening, with the tapping of laptops, the buzzing of BlackBerrys, and the swish of dress-shirts coming on and off amid hangovers current and anticipated.
OK, that was OTA and this is BDU, but what’s changed?
CTVglobemedia and Canwest have since banded together and re-compiled their case. For one, the terminology is being massaged. Instead of ‘fee-for-carriage,’ the casters are now calling it ‘compensation-for-carriage.’ Better optics. Instead of introducing a new fee, CTV and Global want compensation, since, to date, there’s nothing in it for them, apparently, for the distribution of their signals into most every living room and a good many bedrooms coast to coast.
This comes up after the regulator said ‘N-O’ last May to their initial request. Then, six months later – while pursuing an increase to its own fees – the CRTC put the issue back on the table, pointing out that in the broadcasters’ comments after it nixed the proposal, ‘They contend that such a fee is essential for OTA television stations to remain financially viable and/or to continue to fulfill their regulatory obligations.’
Dang! If only they had thought to make that point the first time around, they might have had better luck.
The CRTC’s decision to reopen this particular worm can has emboldened CTV and Global, which have upped their monthly stipend request from $0.10 and $0.50 per subscriber per channel, respectively, to $0.50 to $0.70.
Give an inch, they ask a mile. Bad parenting, I say.
But here’s another thing that’s changed. At the same time that the CRTC said no to fee-for-carriage the first time, it eased advertising time restrictions. That framework, intended as an incentive to get Canadian drama into primetime and keep it there, after the CRTC’s 1999 removal of expenditure requirements, didn’t work. Fair enough.
So here’s an idea. How about, if the CRTC gives the networks their fee-for-carriage, like the specialties get, in return, the networks are required to spend on Canadian programming as a proportion of revenue, like the specialties do?
You know the unions and other squeaky wheels like Friends of Canadian Broadcasting would love it. The casters themselves – not so much. I recently floated this idea to a couple of broadcast executives, and they quickly pointed out that current financial obligations particular to the conventionals – the digital upgrade and local news programming, for instance – are as fiscally rigorous, if not more so, than those of the specialties.
Hmm, that sounds logical. Except, in the words of one veteran industryite who asked not to be named, ‘The stations are full of shit. They make money on local news. It’s the only category of Canadian programming that does make money for them. In the meantime, they’ve been spending a fortune on U.S. programs. They shouldn’t have to – it hasn’t been doing as well.’
He adds that the move to digital – targeted for 2011 – is going to save the conventionals ‘a bundle,’ because they will no longer need to maintain the hundreds of analog transmitters that dot the interior of B.C. and Northern Ontario. ‘You don’t hear them talking about that,’ he notes.
Broadcast consultant Michael McEwen says, ‘They’re both right and they’re both wrong.’
The jump to HD will cost money, he says, but it’s been in the works for nearly a decade now, and if the stations planned prudently through a ‘rigorous course of obsolescence replacement,’ he says, the incremental cost should be a modest 5% to 10% per year capital allocation.
In addition, he notes that local news does okay in the larger markets like Vancouver, Toronto and the Edmonton-Calgary corridor, in addition to providing important localized branding, but it’s more of a challenge in smaller markets like Regina and Fredericton. But then there are synergies, such as CTV’s Atlantic regional network and Canwest’s move to centralize its local news operations – over the loud objections of the CEP – to four urban areas.
‘Put it this way,’ he says. ‘Nobody should be lining up to give to their favorite broadcast charity for local programming.’
One more point. Is it just me, or in this consolidated environment, isn’t asking for fee-for-carriage ‘like the specialties get’ akin to asking mom and dad for a swimming pool because your little sister has one?
I’m just saying.