OTTAWA – Fee-for-carriage is back and it’s not just on broadcasters’ wish lists in panel discussion here at the CAB Convention: the CRTC has announced it will re-consider the issue in its forthcoming review of policies for BDUs and specialty services, which has been pushed back from Feb. 4 to Apr. 7.
Just an hour before CRTC chair Konrad von Finckenstein reopened the matter, broadcasters raised it in a panel discussion on the future of television in Canada.
While the chairman did not specify what factors encouraged the Commission to reconsider FFC, given the regulator’s refusal to allow over-the-air broadcasters to negotiate such a fee under the new OTA policy, issued this year. But the morning panel did offer a few hints.
“Layoffs have been everywhere. We had some last week and there may be more to come,” says panelist René Guimond, president and CEO of TQS, which just let some 40 people go.
“PBIT levels were more than 20%” a few years ago, “now they’re four percent,” added Charlotte Bell, vice-president of regulatory affairs, for TV and radio at CanWest MediaWorks. Businesses have to adapt, and so does the regulator, she adds, noting that there’s “not a huge pot of money suddenly available” just because the Commission deregulated advertising in the new policy.
“We are in the business of engaging local and national audiences….This is not an exponential growth business as it was 20 years ago,” said David Goldstein, senior VP of regulatory affairs at CTVglobemedia.
But Rael Merson, president and CEO of Rogers Broadcasting, said he has nightmares when he considers how to explain to consumers that FFC would mean they’d have to pay a new fee for services they think they already pay for. He believes it’s smart to provide certain content for free, noting the New York Times is now free online, and figure out which products, such as VOD content, consumers are willing to buy.
“We’re not asking Big Brother to solve all our problems,” said Guimond, “just to be fair. Everyone’s working on VOD. We’re trying to generate more on VOD… but it’s hard to move forward until rights issues” are settled with independent producers. “I cannot contemplate a second ‘no’ from the commission on fee-for-carriage,” he adds.
Panelists spoke repeatedly about the difference between how much it costs for conventional broadcasters to serve their markets – providing local news, sports, weather and being involved in the community – and what it costs to operate a specialty channel, which has few, if any, “local” market obligations (and are prohibited from seeking local ads by condition of license).
Panelists also pointed to HD conversion as a problem or “tropical storm” in the 2007 TV policy, which requires an “analog shut-off” by Aug. 31, 2011. Guimond also noted that conventional TV services face more HD expenses than specialties.
“Do we really require over-the-air HD transmitters?” wondered Rick Arnish, president of the Jim Pattison Broadcast Group. Maybe, he says, they’re required in Toronto, but in Quebec and in his neighbourhood of B.C., there are numerous transmitters and only 5%-8% of the audience who receive their programming via antenna. It’s hard to justify the expense of converting transmitters.
Goldstein added that when he was with CHUM, it had done early conversions and found it very inefficient and a poor return-on-investment. While HD “is a driver for audiences,” he says, it’s not clear it must be delivered over-the-air.
