TORONTO – After saying he believes it’s "good business" to help produce and then show Canadian content, Astral Media CEO Ian Greenberg today sent a message to Gatineau, cautioning the CRTC against letting conventional broadcasters into the wholesale fee game.
"Our pay and specialty television services have invested over $1 billion in the development and purchase of original Canadian-content production, and in support of home-grown talent, since we began in this industry. We believe it is good business to do this," he said in a speech to shareholders at the company’s annual general meeting in Toronto.
"But even more important, we believe – and our viewers agree – that we ought to give Canadians stories that reflect their sensibilities, to provide them with information and documentaries on subjects of Canadian interest. There cannot be a sustainable, distinct Canadian identity unless we have a strong independent, creative and representative Canadian production industry."
However, Greenberg voiced concerns on fee for carriage for conventional broadcasters, which has been discussed to death for days at the CRTC’s TV Policy Review hearing, as well as the potential for foreign ownership of broadcast distribution undertakings (satellite and cable companies).
Pointing to the Telecom Policy Review Report, which contemplates more liberal foreign ownership rules for telecom companies, "the issue is more complex than it may appear," he said.
"BDUs in Canada are not just neutral, common carriers. They have a major impact on the profitability of producers and programming services. Ultimately they decide which services are to be marketed, offered and promoted to consumers. They create program packages and set retail prices, and they negotiate the crucial wholesale prices paid to programming services," Greenberg added.
"Unchecked liberalization of BDU foreign ownership has the potential of hampering the capacity of Canadians to inform and entertain their fellow Canadians… Therefore foreign ownership rules for BDUs should be liberalized only if additional rules of conduct are formulated to offset any potential impact on cultural content.
"As well, structural separation should prevent foreign investors from doing indirectly what they can’t do head-on. A foreign company that controls a Canadian BDU should be barred from owning any interest in a Canadian programming company. Canada must not allow foreign ownership of BDUs to be the Trojan horse that will destroy the wealth of our culturally distinct broadcasting system that has taken decades to build."
Finally, when it came to the fee-for-carriage issue, Greenberg argued against, saying that if such a fee is approved, the additional funds could injure specialty services and their content.
"(Conventional broadcasters) argue that increased profitability… would allow OTAs to contribute to the production, acquisition and broadcast of high-quality Canadian programming. But that will happen only if the amounts paid to the OTA broadcasters are additions to the present subscriber fees paid to BDUs," he explained.
"It could very well be that subscriber fees paid to OTA broadcasters would merely be deducted from fees currently paid to specialty broadcasters. Yet those specialty broadcasters dedicated 37% of their revenues to Canadian programming in 2005, compared to 27% for Canadian OTA broadcasters. So for every $100 in revenue transferred from specialty to OTA broadcasters, the system as a whole would see a loss of $10 in spending devoted to Canadian programs.
"So it is important that regulators take into account the potential impact of any changes to the subscription fee structure on all broadcasters, including Canadian pay and specialty television services and radio operators," Greenberg continued. "Robbing Peter to pay Paul is not going benefit the Canadian broadcasting system as a whole. And in the end, it is not a recipe that will benefit the Canadian viewer."
– Greg O’Brien
