The Canadian Association of Broadcasters says the impact of national DTH distribution on local TV stations, first in small markets and now increasing in major urban centers, is reaching crisis levels due to the loss of audience share and millions of dollars in advertising revenues.

Canada’s private broadcasters have asked the CRTC to place the issue of generalized decay of exclusive local TV program rights at the top of the agenda at licence renewal hearings for direct-to-home services Bell ExpressVu and Star Choice.

Hearings for both services, as well as for multipoint distribution systems operated by Look Communications and Craig Wireless International, began Oct. 20.

Broadcasters want the CRTC to ensure more regulatory parity (on carriage and linkage requirements, etc.) between DTH and major cable operators and to enshrine program rights and a compensation formula for broadcasters in all markets across the country.

‘Program rights are an essential component of a healthy system and if we [fail] to pay proper respect to the protection of program rights we will have a larger problem on our hands down the line,’ says Glenn O’Farrell, CAB president and CEO.

According to the broadcasters, TV stations throughout the entire system are faced with unprecedented levels of audience fragmentation as a result of DTH, which now makes up approximately 23% of all distribution. Unlike cable, which provides for local station program delivery, DTH signals are distributed nationally and broadcasters say the impact is no longer limited to small markets.

O’Farrell says the DTH policy has been a genuine success story adding both viewers and program revenues to the Canadian broadcasting system. But, he says, local station viewing has been lost to DTH households due to the importation of out-of-market signals and time-shifting.

A submission to the CRTC by Global Television states the commission ‘itself noted in Public Notice CRTC 2003-37 that… total local advertising revenues for all television stations have decreased by 1.3% in the last five years.’

Global says nine of its 15 TV stations are currently unprofitable, a development it mainly attributes to audience fragmentation caused by DTH. A case in point, Global says its Quebec station CKMI is not carried by either Star Choice or ExpressVu and the service’s reach has been reduced to approximately 45% of the target audience.

At the hearings, CAB presented a report prepared by Strategic Inc. called ‘The Relationship between ‘Hours Tuned’ and Growth in Satellite Conventional Television – Impact of DTH.’

The purpose of the study, says O’Farrell, is to explain the impact of non-carriage by DTH on a local broadcast signal and to create a coefficient to determine the impact of future growth in DTH on the revenues of conventional stations.

O’Farrell says audience fragmentation due to DTH cost local broadcasters $18 million in 2002.

CBC told the commission that ExpressVu, as a minimum, ‘should be obliged to provide CBC carriage parity on an [owned and operated] basis with the major private television networks.’

CBC says it does not want to relinquish to DTH any decisions on which CBC stations are to be carried by DTH. Secondly, CBC wants the current level of DTH carriage of CBC Newsworld and Reseau de l’Information to be extended through the next licence period.

According to the most recent Mediastats information (June 2003), close to 9.4 million households in Canada receive licensed BDU services. Newsworld is available on the basic service in just under 8.9 million households, while RDI is available in 8.5 million.

CBC says ExpressVu’s ‘unwillingness to commit to the inclusion of these two services on its English- and French-language basic services over the course of its next licence term jeopardizes CBC’s ability to deliver the services.’

CRTC chair Charles Dalfen says the commission ‘intends to study the issue of regional CBC signals provided by [both DTH services], in both official languages.’

Both Star Choice and ExpressVu have asked the CRTC to drop or amend conditions of licence covered in the Broadcasting Distribution Regulations, while maintaining conditions related to simultaneous substitution, distribution of its programming guide and dedicated marketing channels, and service to multiple-unit dwellings.

Star Choice is asking the CRTC for permission to delay the distribution of local TV signals in small markets (as set out in Broadcasting Decision CRTC 2003-258), to a new deadline 30 days after the launch of the Anik F2 satellite, already delayed and not expected to happen before late 2004.

Star Choice has also asked the CRTC to reduce its contribution to private production funds by 40%, a proposal strongly opposed by the CFTPA.

Bell ExpressVu is seeking permission to engage in bulk billing in multiple-unit dwellings, on the same basis as cable. In addition, ExpressVu is requesting authorization to distribute a new condition of licence (similar to Section 23 of the regulations), which authorizes Class 1 and 2 cable operators to distribute a wide range of audio (radio) services, a proposal that includes U.S. radio services.

-www.crtc.gc.ca