AFTER SPENDING A LOT OF time thinking about and writing about the idea of charging a new fee for something people can get for free – over-the-air, broadcast television, that is – there’s always one inescapable conclusion: It’s going to make them mad.
It was a front-page issue in the conventional TV policy hearing in late 2006 (and was ultimately denied due to lack of evidence) and it’s now part of the 2008 broadcast distribution undertaking and specialty service policy hearings coming in April: So should conventional broadcasters get a subscriber fee or not?
On the one hand, broadcasters – whose signals are still available at no charge over-the-air to the Luddites with a coat hanger jammed into their Sylvania black and white or the high definition nerds who must have uncompressed OTA HD – have found no consistently good way to effectively deal with the type of audience fragmentation an ever-growing slate of specialty services and web portals and other places that consumers can access for video entertainment. Even truly kick-ass new programming hasn’t been enough to stem the tide of viewers and dollars* – although great original programming is still the best option available to them to earn viewers and revenue.
And despite the panic, we really don’t yet know what the overall long term toll places like Facebook and YouTube and Joost are going to take on broadcasters. We can see at this particular moment it doesn’t look too positive, especially with PC to TV bridge devices like AppleTV coming on, but let’s remember that these massively popular media outlets – and the gizmos like AppleTV, Archos and Slingbox – are still very young. What we do know is that the millions of people visiting and posting on these sites and using these new CE devices are huge consumers of what is developed, disbursed and debuted on the likes of CTV, Global, NBC, CBS, and other conventional electronic media outlets.
They love Lost, American Idol, Hockey Night In Canada, Corner Gas and The Simpsons. But they want to see them at different times of day, take them along for a trip – and even to play with video clips a bit to create their own content mashup. But 99% of them, I would guess, want to continue to be able to be entertained by big-budget blockbuster television shows and movies. They don’t really want to saw the legs off the table holding up that business model – even as they do so with their PCs, PVRs and cell phones.
And while all this is going on, Canadian broadcasters are on the hook for millions in new spending on digital upgrades across the country so that they can make the move to high definition and abandon the 700MHz band so that the government can sell that off to wireless companies. The upgrades have to happen, but there’s no immediate payback for the ‘casters, unlike how a telco or cable company can capitalize on their network upgrades by charging more for faster Internet service, for example.
Added to this mix, late last week a poll commissioned by CTV and Canwest in preparation for the BDU and specialty service policy hearing said that Canadians really love their local news. Local news is expensive and sometimes tedious to produce. It ain’t easy and I’m glad someone does it. Of course, people will tell pollsters they want to stay informed and love their local news (which isn’t as local or as newsy as it once was, btw) but will they pay extra to keep it?
Now, on the other hand, if people will pay $4 at Starbucks for something that can be had for a buck in many other places or $2 a bottle at the 7-Eleven for something that flows freely from any tap, I suppose we’ll pay for anything. But the problem with that attempted parallel is that I can choose the $6 Caramel Coretto at the high-end java joint or the dollar cup at the local coffee house. A new, imposed broadcast fee offers me no such choice, unless I want to erect an lightning rod, er, antenna, or go black market.
I understand the arguments Canadian broadcasters have put forward to support a new fee-for-carriage regime which, as we reported in depth earlier this week, would see an additional 50-cents per month per signal added to the cable and satellite bills of Joe and Jane Bagadonuts, regular Canadian. I understand CTV’s and Global’s points. I know the reasons why they want the new money – and I’m even a little sympathetic.
But that doesn’t mean I believe Canadians will stand for them.
Should the CRTC approve such fees (and they just might, given the market conditions I’ve already cited plus the obligations Broadcasters are responsible to fill under the Broadcasting Act), it will quickly become a political issue. And it’ll be one of those slam-dunk easy ones for politicians and Canadians to understand: “Do we give fat-cat mega-rich Canadian broadcasters hundreds of millions more of your dollars, or not?” is how it will be spun. Sympathizers will be few.
And if our economy goes the way of the recession-bound U.S. economy in 2008, guess how a government-body-mandated cable rate increase will be received in the Bagadonuts households around the country – and then in their MPs’ in-boxes.
Yup, it won’t be pretty.
There’s got to be a way for broadcasters to adapt to the new market conditions and grow their profit margins without these new fees, we just haven’t thought of it or tried it yet.
What are your ideas? Do you think we’re off our rockers over here? Let us know by dropping us a line at editorial@cartt.ca.
* Yes, we know broadcaster revenue is still growing, but compared to other sectors of the Cartt industry, the margins on OTA ‘casters are scary-thin.
