IN THE SPACE OF a few days last week, I had the chance to listen to a pair of conventional broadcasters expound on the future of their industry and what they must do to adapt.
From what I heard, the points of view of the two men were pretty dissimilar and boiled down to two questions: 1. Do we try some new things? Or, 2. Do we keep plugging away at more of the same?
The first was outgoing Rogers Broadcasting president Rael Merson, the subject of this week’s Tuesday Interview.
The future of broadcasting, he said, is more risk. Conventional broadcasters face pressure from everywhere. There are multiple media robbing consumers of their time to devote an hour to a scripted series, for example. There are many places on the web robbing producers and broadcasters of value by freely distributing copyrighted programs.
Specialty services and video on demand and the plethora of places on the web to find video means conventional broadcasters, once the very top dogs of consumer entertainment, are under attack from others who want the alpha dog throne. And fleas like copyright thieves are weakening it, too.
Merson suggested broadcasters have to accept more of the risk in producing the programming they air. They can’t just be content buyers anymore and sell ads around what they hope is a hit show. They have to own a piece of it, they have to back making it, so they can monetize it in as many ways as possible from VOD and PPV through TV and online and wireless and DVD sales.
That’s the future he said Rogers Broadcasting is staring at (albeit without him…).
This is not a road upon which CanWest Global CEO Leonard Asper is prepared to drive his company, however. During the BMO Capital Markets Media and Telecom investors conference last week, he was loathe to accept the idea of taking on more risk and wants to cut out original content (i.e. news).
Asper recognized that conventional TV “is a flawed business model and it’s got to change,” he said, adding that placing shows in the top 10 in the ratings isn’t good enough anymore and that “we have to look at our program costs,” while finding “more monetization opportunities for that content.”
Canwest wants to be able to own “every window” for the content it purchases, from TV to the web to DVD rights, he said.
So, Asper was asked, does that mean Canwest will be willing to make equity investments directly into content production, either made in Canada or the U.S.? No. Too risky. “I prefer not to go that way,” he said.
Asper said he would Canwest just buy the rights, but also added that there needs to be regulatory change, such as allowing ad insertion in video on demand or where the CRTC can relax the broadcasters’ local content obligations
He pointed to CHCH Hamilton’s obligation to show 35 hours of news and eight hours of drama per week, saying “these are things that have to change,” because they are too expensive. As a resident of Hamilton, I have to say that the 35 hours a week of local news is the only thing that distinguishes CH from everything else on the dial and the lone reason I tune into the channel.
A push to be able to show fewer hours of local, original content Hamiltonians can’t find elsewhere seems like an illogical move to me.
And, of course, Asper still wants fee-for-carriage, acknowledging that if there is such a new fee, there may be some new regulatory obligations saying the money can’t be spent on buying more foreign programming. Whatever the decision on the new BDU regs, now apparently due at the end of October, “I think we will come out of it a net winner,” said Asper at the BMO conference.
“The CRTC recognizes the gravity of the situation and I think they are grappling with ‘how do we solve it?’”
Beyond the differences in directly investing more in content versus not, the other striking difference in talking with Merson and hearing Asper is that Merson didn’t once say the regulator had to step in to solve conventional television’s challenges.
So. Here are the edited thoughts of two respected broadcasters. Who’s right? What’s your take? I think my own leanings may have seeped into this piece, but have your two cents at editorial@cartt.ca. We’ll publish what you have to say, and even keep your name confidential, if you wish.
