TORONTO – Freshly minted Canadian citizen Kevin Crull said Wednesday that without some regulatory change, he fears for the future of the Canadian television system.
Perhaps newly emboldened after becoming a Canadian citizen just last week, the Bell Media president used his luncheon keynote at the Canadian Telecom Summit on Wednesday to heap criticism on the way the regulations governing the Canadian TV industry have mutated over the past couple of years, and to wonder why our knee-jerk reaction as Canadians always seems to fear the big company and how badly it could act, even in the face of the excellent investments such organizations can make and do make in the wealth and health of the nation.
“We absolutely think that this scale should be celebrated, not demonized,” he said when first touching on the size of his company and the response by many to it, “and I find it disheartening many times that there’s a Canadian culture to demonizing scale… You are totally wrong if you think I sit in a room with (Bell Mobility and Residential wireline chief) Wade Oosterman and (Bell Canada CEO) George Cope… and scheme ways to get a competitive advantage by doing things that are unfair… we can’t do that and we don’t.”
Bell Media’s scale has allowed it to invest heavily in technological and programming upgrades since its purchase of CTVglobemedia in 2010, he outlined. Back then, CTV had just three of its conventional TV stations broadcasting in high definition. “We now have 16 broadcasting (in HD) and just three more to go (to convert),” Crull said. As well, new channels, many more hours of local news, radio stations, iPad apps and new wireless capabilities have been swiftly added to the mix, so that customers can get more Bell Media content, and in many more places than ever before.
“None of these investments occurred when CTV was independent… and independent is sometimes used as a god-like status symbol,” Crull intoned. “Did the Thomson family (CTVgm’s former majority owner) not have the money to invest in CTV? I kind of doubt that.
“Maybe vertical integration actually does motivate investment and innovation. Obviously, I think that is the case.”
Despite the strength of the big media company and the pride he says he feels in an industry that is “serving all constituents quite well today,” Crull took advantage of the myriad government and CRTC officials in his audience to press for regulatory change and decry what he sees as “flip-flopping” by the Commission over the past 30 months as Shaw purchased Canwest Global and Bell, CTVgm, in that time. For example, he pointed to the current prohibition on exclusive content on broadband and mobile platforms as compared to 2008-09 when the Commission said then it would not regulate mobile or online content.
“I have never felt, ever, that there was more fundamental risk to a business model because of regulatory than I feel now,” he said in an interview with Cartt.ca after his speech. “There’s haphazard decisions and, as the result of what are just commercial disputes, rewriting the rules of how an industry has operated for decades.”
Crull (right) went on to explain to the delegates the precarious state of the conventional TV networks, too. For example, while over half of what Canadians watch is found on CTV, Global, Citytv and CBC, those main networks bring in under 30% of the total revenue “and zero percent of the profit,” he said. What is needed is another line of revenue because advertising is no longer good enough. (“After a good year last year, we’re in a very bad year right now,” he noted). That new source of revenue is subscriber fees, which is a battle the Supreme Court has heard and will weigh in on later this year.
What would also help, would be a regulatory switch to enforce non-simultaneous substitution, as well as simultaneous, of foreign programming. For years, distributors have, as part of their regulatory requirements, substituted the Canadian feed of a show airing on one of the U.S. conventional networks at the same time. When Amazing Race is on CBS and CTV Sunday nights at 8 p.m. for example, all of Canada sees the advertising CTV has sold around the show it purchased from the U.S. owner.
However, if the Canadian broadcaster wants to set its schedule how it sees fit – and not air all of its shows on the same day and date as the American broadcasters which are also on the channel lineups of Canadian carriers, it loses the substitution rights and will then pull in fewer viewers seeing the Canadian advertising and therefore less revenue.
This must change, says Crull. Non-simultaneous substitution has to become a regulatory must. Let’s say 500,000 watch Missing when CTV airs it on Tuesday and 500,000 more watch when ABC has it on Thursday, “I bought the rights to that program. I should be able to monetize a million people. Today I’m only monetizing 500,000,” Crull told Cartt.ca. “This is a solution that won’t hurt anybody.”
Crull also asked the CRTC not to authorize any more American cable channels for carriage in Canada. “They don’t contribute to the system… they come into our country, they can change their genres and compete with us in ways where I couldn’t launch a channel in the genre they’re allowed to change to.”
Finally, Crull also took a last shot at arguing the company’s case against the Canadian Independent Distributors Group. We won’t re-hash the carriage battle or what Crull had to say because we’ve covered it extensively and the issues haven’t changed, but we will note that the final, best, contracts from both sides are due into the CRTC this week, then there’s a week for either side to see them and reply. After that, a single Commissioner will attempt one last shot at mediation. If that fails, any progress made during that last ditch mediation is thrown out and a small panel of Commissioners, (which won’t include that prior mediator), will pick one contract over the other after the final public appearance on June 29th. Then a decision will be rendered likely within 10 days following that, Cartt.ca was told.
Just after Crull’s first Canada Day as a Canadian.
