GATINEAU – Group licensing has the potential to throw the Canadian broadcasting system on end, while benefiting consolidated broadcasters and hurting small independents, according to Score Media CEO John Levy.
The company, which operates the sports specialty service The Score, contends group licensing is “not in the best interests of the Canadian broadcasting system.”
“This is not coming from my love of existing rules (which include genre exclusivity, and specific expenditure requirements for each specialty channel),” he said during questioning. Group licensing with group-wide Canadian content expenditures would allow large broadcasters with many channels to engage in “genre arbitrage,” said Levy.
He explained that all-news stations like CTV Newsnet or Cable Pulse 24 have very different Canadian content and exhibition requirement than drama-oriented channels like Bravo and Showcase. Thus, allowing large station groups to shift some of their Canadian content requirements from one service to another would result in some genres losing out and others gaining.
The CRTC has proposed some flexibility in broadcasters calculating Canadian content expenditures across all the stations under their umbrellas.
Levy pointed out that TSN or Sportsnet, for example, could use their monthly subscriber fees to acquire Canadian professional sports rights or the Canadian rights to the Olympics. Doing this alone, he explained, would then fulfill most of the Canadian programming expenditures for the entire broadcast family.
“CTVglobemedia already books more Canadian programming expenditures to its four sports services than it does to the combined total for its 25 non-sports discretionary services,” he said in his opening remarks.
Fundamentally, Levy said group-based licensing just doesn’t get to the root of the problems. The Score operates only one station (although it did at one time run PrideVision as well), so it wouldn’t benefit from group licensing. Levy doesn’t seem to have plans either to launch any more sports TV channels.
“You will not see The Score 2,” he said. “Our new channels are our new platforms (including online and the Internet). We have to connect with the audiences where they are.”
Levy also called on broadcasters to find new ways of tapping into advertising dollars and to brand the programming they acquire so that consumers will tune into their channels. For example, he noted Proctor & Gamble were looking for new ways to connect with audiences, so The Score initiated a cross-Canada contest under P&G’s Gillette sponsorship, where it searched for the next great sportscaster.
Previously, P&G would have used the money on 30-second spots, but they were looking for something different, something closer to the audience, explained Levy.
The Score also includes an always-on sports ticker with ads above it on its channel. “We say to the advertisers: ‘Do you want 70% of a screen people will watch, or 100% of a screen (not many will tune into)?” noted Levy.
Branding and integrating the acquired program with a particular TV channel is also important. “You can’t rent programming. You have to create it,” he said. “You have to be associated with something. You’ve got to stand for something. The fact you can watch a football game on three different networks doesn’t help your network at all unless you’re doing something special with the programming.”
Under the group-based model, the large groups could shift their expenditure obligations to genres like sports, and shift their exhibition obligations to genres like news, and “end up with a very free hand on the rest of their services,” continued Levy.
If the CRTC decides to move ahead with group-based licensing, Levy pressed for the maintenance of some licence-specific expenditure and exhibition requirements and the exclusion of sports and news channels under the group licensing framework.
CRTC chair Konrad von Finckenstein concurred, saying during the hearing that it “makes sense” to exclude sports and news. The chair also asked The Score to submit in writing further safeguards they feel would be of benefit.
Would allowing 15% of a group’s overall Canadian content expenditures to be used anywhere across a group’s stations (as proposed by CTVgm) be a good number? asked the chair.
“Fifteen per cent is a big number,” responded Levy. “It seems counter intuitive.”
Other independent broadcasters appearing at the CRTC hearing on Thursday – Pelmorex Media Inc., Stornoway Communications and the S-VOX Group of Companies – expressed their concerns, too.
While explaining the Commission must be cognisant about what effect new changes could have on the independent specialty sector, Stornoway president and CEO Martha Fusca told the CRTC that fee for carriage could have a devastating impact on the independents, unless there were other regulatory measures taken to protect them. (We have corrected this paragraph to reflect the fact Ms Stornoway said a new cost in the system could be harmful to independent specialties and not group licensing, as the first story read. Cartt.ca regrets the error.)
Pelmorex senior vice-president of regulatory and strategic affairs Paul Temple’s thoughts on group-based licensing: “Our concern related to the possibility that the creation of a regulatory framework that could provide the larger corporate groups in Canada with increased flexibility and significant competitive advantage over smaller, independent broadcasters.”
The hearing wraps up tomorrow with E1 Entertainment, the Canadian Association of Film Distributors and Exporters, Mtroop Creative Services, ELAN and 15 individual Canadian presenters.
It’ll probably be a pretty short last day.
