IF YOU JUDGED BY the various ad campaigns, Facebook pages and Twitter streams, you’d be thinking that the hearing beginning today in Gatineau is only about whether or not conventional broadcasters should get a fee for their signal.
Well, granting the broadcasters the right to negotiate a fee for carriage of their local TV signals is a foregone conclusion. I’m convinced this will happen. The term “negotiation for value” – which has begun to replace “fee-for-carriage” in the industry lexicon – was coined by CRTC chairman Konrad von Finckenstein himself earlier this year and while I’m not necessarily opposed to the broadcasters gaining that right, I am opposed to how that new right may be deployed.
The construction of the compromises around this new policy, however, is what’s really at stake (among MANY other things) over the next two weeks.
So, assuming the ’casters are going to get their wish and be able to go to the cable, satellite and telco TV companies and demand payment for the likes of Global Toronto, CKCO, V, NTV and the rest, just what are they going to have to give up in return?
Mandatory carriage will certainly disappear, it seems. The broadcasters themselves have said they’d be happy to give that up in exchange for new money – as long as their local copyright protections are respected.
What that last bit means of course is if Global and Rogers can’t come to a carriage agreement – and using Toronto and Monday night’s schedule as an example – Global would not only pull its own signal, but Rogers would also have to block Buffalo’s Fox affiliate WUTV from 8-10 (when House and Lie to Me are simulcasted on Global), and also NBC affiliate WGRZ between 8 and 9 (Heroes) since Global owns the rights to that show in Canada, too, even though the Canadian ’caster airs it at 10 on Mondays.
That would be a lot of blue screens for Rogers subscribers, if that scenario were to happen. Nobody wants that to happen, of course, but given the free-flowing vitriol of the past few months, it’s certainly possible.
Despite all their bluster, the carriers know they need to be distributing the most popular programming and right now, that is still owned by the major broadcasters. And the denial of signal scenario would be untenable for Global for very long because most Toronto households, who their major advertising clients want to hit, are Rogers Cable customers.
(If negotiations get truly nasty – and with this hearing about group-based licensing, too – one wonders would Global’s parent Canwest then be able to yank its specialties like Showcase, HGTV and History from Rogers during such a dispute?)
ANOTHER ISSUE SURE to arise in this hearing (as well as the consumer hearing set to begin December 7th which has apparently logged over 160,000 submissions) is whether Canadian consumers will get more choice? As a Hamiltonian, and with CHCH doing a ton of local news now, I wouldn’t object to paying a subscriber fee to the station. But do I want to pay for Citytv or CFTO or Global Toronto? Sorry, but I’d rather pick.
And what about the Bell ExpressVu or Shaw Direct subscriber in Moosomin, Saskatchewan, for example. They don’t have a local TV station at all and if this fight is about saving local TV, as I’ve been repeatedly told it is, should he pay a subscriber fee? How about the Cable Cable customers in and around Fenelon Falls and Bobcaygeon, Ontario? The only TV there that reflects those tiny communities is that cable operator’s community channel. Should they be able to choose to pay for broadcasters which aren’t their local station?
Going further down the choice road, my neighbour Steve, a firefighter whose son plays on the same volleyball team as my son’s, is a cyclist who says the lone channel with even a bit of pro cycling on it is OLN. He wants to know why he can’t just buy CHCH and OLN from Cogeco Cable. I told him why. And it didn’t make him happy. He said he’ll keep finding what he needs online and will be keeping his rabbit ears for as long as they work for him (yes, he’s an urban dweller who gets his TV off-air).
So while I’m not really opposed to the broadcasters gaining the right to negotiate a fee, I am opposed to seeing more of my money being tossed at channels I don’t watch and into a business model everyone under the sun says is broken. Adding more money can’t be the only solution to what ails the industry. Changes in what’s on the air must come, too.
Continuing paying grillions of dollars for U.S. hits which are available everywhere, while cutting back local news and insisting Canadian shows never make money when they have rarely been programmed in popular time slots is no way to fix “a broken model.”
That means more original content, not just re-purposed U.S. fare. With more original content, maybe I’d be more willing to pay up. I buy specialties because they have content I can’t get elsewhere. And besides, if I were a big Canadian cable operator with substantial VOD capability, I’d be thinking about heading to L.A. to buy some of those popular U.S. shows for my VOD platform.
SOME HAVE QUESTIONED that if mandatory carriage is going, simultaneous substitution should disappear, too. To the grumpy fans of Super Bowl advertising who have to incessantly prowl YouTube that first weekend in February to see all the cool new vids, simsub is staying.
That little gambit that was actually a cable idea. Back in 1971 the Commission was seriously looking at banning American TV signals outright. But, as a way for Canadian cable companies to continue to keep U.S. stations on the dial while protecting the copyrights purchased by Canadian broadcasters, Ted Jarmain, who was president of what was the largest cableco at the time, Canadian Cable Systems, suggested the idea of simultaneously substituting Canadian ads over the American ones, and the Commission ran with it.
You could make a case this whole hearing and many of the issues the Canadian TV biz faces have stemmed from that early-1970s decision to go around local copyright protection for TV stations in Canada instead of enforcing it. Stateside, cable and satellite companies can not show out of market local broadcasters. Time Warner Cable in Buffalo can not carry the Rochester, N.Y. conventional stations, even though they are an hour apart. However, here in Hamilton, I can see local TV from Halifax, Detroit, Vancouver, Edmonton and Seattle, besides my locals.
As a consumer, I like the choice (in fact, our TV system offers more choice than just about any jurisdiction in the world) but you can find many in the business who view the simsub policy as one of the biggest mistakes the Commission ever made.
THE REAL WILD CARD in the two coming hearings is the concerted lobbying effort to make sure carriers don’t pass on any new fees. My gut tells me that there’s no way cable rates will be newly regulated. Video is a competitive market and rate regulation just won’t stand up to a court challenge.
However, not everyone can afford cable and with no digital transition plan in place, despite the fact we’re 21 months away from the shutoff of analog TV, expect some discussion of a “skinny basic” option where just a handful of Canadian-only channels would have to be offered for just a handful of dollars a month. That’s something that could be regulated, even if very few would take advantage of such a package.
And since we are now moving towards paying broadcasters for their signals, you can bet that the WGRZs and WUTVs of the world will rightly come knocking on the door of Rogers and Cogeco and Bell and others for retransmission fees, too.
As well, if we’re going to talk about a fee being paid without passing it on to the consumer, then other compromises like permitting full-on advertising on cable community channels and allowing the local avail ad time on American cable channels to be sold by carriers have to come on the table, just to cite two examples.
And then what could that do to local radio station revenues?
The other folks worried about these proceedings are the ones in charge of the broadcasters’ specialty channels. They are certain that any new fee headed to CTV Vancouver or Global Calgary, will come also come out of the hides of the wholesale rates paid to the likes of Animal Planet (CTV) and IFC (Canwest) come contract renegotiation time. (Not to mention the independent specialty owners.)
So there may be an additional reason broadcasters have not said what size of a fee they will be looking for when they get the right to negotiate. They have disowned the 50-cents per signal fee they talked about in the last go-around – and maybe for good reason. Half a buck isn’t nearly high enough.
When you consider CTV Toronto is often the highest-viewed channel on the dial because of the hit shows the network airs, and TSN, which earns far fewer viewers most of the time, is paid a minimum of $1.07 per sub per month, its basic rate, how much should CTV be paid?
FINALLY, ONE BIG QUESTION the broadcasters are going to have to face (I bet it’s one of the first few asked of CTV Monday morning) is: What are you going to do with this new money? If “Local TV Matters”, as their ad campaign has assured us it does, will CTV commit to keeping Windsor’s A-Channel open? Will it re-open studios in places like Timmins and Sault Ste. Marie? Will Global re-start something in Red Deer in place of the recently shuttered CHCA?
Will broadcasters re-commit to local news and variety programs or use the cash for a massive push into new technology and platforms (or even making use of existing ones so that I can watch the six o’clock news at 9:45 if I wanted… on my BlackBerry or iPod). Will CTV and Global get together to launch their own version of Hulu.com or establish a big R&D budget to seek out some new things or push forward on interactive or dynamic ad insertion technologies?
Will they keep OTA TV running in markets under 300,000 or experiment with digital OTA multicasting as a number of American stations are doing to help serve their fragmenting markets.
Or is it just to maintain the status quo? Our broken model?
We’ll start to find out this morning.
Don’t be shy about e-mailing us questions about this column, or even during the hearing at editorial@cartt.ca – or follow us on Twitter via @gregobr.
