A New View on Canadian TV?

CRTC hearings that started this week have the potential to radically alter both the structure and content of Canadian television.

At the heart of this review of the “regulatory frameworks for broadcast distribution hearings,” as the Commission calls them, is a struggle between cable, telephone and satellite television program distributors, such as Rogers Shaw, Telus and Bell, and the country’s private “conventional” television networks, such as CTV and Global. Distributors are asking to have regulations rolled back, giving them more freedom in how they package the signals they sell to consumers. The networks are asking the CRTC to order the distributors to levy subscription fees for their signals.

Caught in the cross fire are small independent specialty channels and the whole edifice upon which television regulation is built.

The private networks argue that in the face of their audiences being fragmented by the seemingly ever increasing “choice” of television fare offered by distributors they need the fees to maintain the production of Canadian programming. Consequently, they are calling for distributors to pay them a small monthly fee of $.50 - $.70 for each of the distributors’ subscribers to their signals.

Distributors, on the other hand, argue that any increase in fees will drive their subscribers away into satellite and Internet based grey and black markets. At the same time, distributors also want more flexibility in how they package the channels they deliver. Consequently, they are calling for an end to “genre protection,” a system that ensures that Canadian specialty channels are protected from foreign, mainly American channels that offer fare similar to their own. The distributors also want more flexibility in the percentage of Canadian vs. foreign signals they carry and the right to insert commercials into pay-per-view programming.

While both private broadcasters and distributors say they need these changes to compete in the shifting broadcast environment, recent figures released by the CRTC reveal that they are quite profitable.

Of course, the real struggle here is over the production and distribution of Canadian programming. When asked for their opinion, Canadians continually state they want access to Canadian programming. But because the Canadian rights to U.S. programming can be bought at a fraction of the cost of production, it’s always a fight to get profit-oriented Canadian broadcasters to satisfy that demand. These hearings are an ideal opportunity to put Canadian programming front and centre in the system.

Spending on Canadian programming by the private conventional networks is in a downward spiral, while their spending on U.S. shows is rising. On the distribution side, any relaxation in the rules is bound to impact the availability of Canadian programming. Not only is it more profitable for distributors to carry foreign specialty channels, but increasing the availability U.S. specialty channels would both fragment the markets of their Canadian counterparts and threaten the complex system of cross-subsidization of programming that keeps them financially viable. Canadian specialty channels use the profits from the U.S. programming they carry to pay for the production of Canadian programming. Giving U.S. channels unbridled access to the Canadian market would undermine that revenue and could well put many of them out of business.

Any new subscription revenue should be directly tied to the production of Canadian programming. Otherwise it might well be siphoned off to buy more U.S. programs. Similarly any concessions to distributors should hinge on their foregrounding Canadian signals. The basic service should include all public broadcasters, including CBC and Radio-Canada stations nearest the subscriber. Newsworld, RDI, the closest provincial broadcasters, public service broadcasters such as APTN and, for terrestrial distributors, local community broadcasters should also be included. The production and distribution of more local news and information programs should be a particular priority for all players, as this type of programming has suffered the most in cutbacks that have accompanied recent consolidations.

In the interest of diversity, independent Canadian specialty channels should also be given preferential positions in the distribution structure. In order to maximize their return on the U.S. programs they purchase, the big companies schedule the same programming across their different broadcast properties, leading to many opportunities to watch programs like CSI and Family Guy but little in the way of Canadian shows. Independent channels offer some relief in this mediascape.

Perhaps the best way to expand the choice of Canadian programs would be to use subscription fees to increase the range of not-for profit public service channels. Channels with a public service mandate necessarily put Canadian programming before profits and are the one sure way to maximize investment in Canadian programs.

The CRTC should look beyond the private interest of both the private conventional networks and the distributors and foreground the production and distribution of Canadian programming. That way Canadians would have a real choice within the system.

For more information see:

http://www.crtc.gc.ca/eng/NEWS/SPEECHES/2008/s080408.htm
www.thestar.com/article/413096
www.theglobeandmail.com/servlet/story/LAC.20080410.RCRTC10/TPStory/TPBus...
www.crtc.gc.ca/eng/NEWS/RELEASES/2008/r080304.htm