TORONTO – Independent producers who attended a special Banff Media Festival preview event and reception in Toronto on Wednesday were likely very encouraged to hear top Canadian media executives speak about the value they place on high-quality original programming.
During a special media leader panel discussion, David Purdy, senior vice-president of content for Rogers Communications, cited several examples of successful TV channels – all of which feature a high percentage of original TV series content in their daily broadcast schedules. “If you look at A&E, they used to carry Murder She Wrote and CSI,” Purdy said. “A&E is now going to 95% original programming – now, it’s red-neck reality programming, but it’s original. So, Dog the Bounty Hunter and Billy the Exterminator.”
Giving another example, Purdy said the real value of a channel like AMC is in its original series, such as Mad Men, Breaking Bad and The Walking Dead, and not as a broadcaster of classic movies, which make up the rest of its daily rotation. “The money I pay to AMC every year is for the original series content,” Purdy said. “The aggregated library of movies – that’s not why I’m writing that cheque to them every year.”
Purdy mused whether or not the consumer might see more value in a channel that ran higher-quality original series content at a more frequent rotation. “That way you could take some of your library costs down and put more into original programming, and still be in a better place as a network. And ultimately the consumer would be in a better place,” Purdy said.
The one media buyer on the panel, Mediacom Canada’s CEO, Jamie Edwards, said what most assume to be true: the digitalization of TV content has put the consumer in control. “For people who are in the content business, other than water, I think you hold one of the most precious commodities in the world, because we’re in an on-demand economy,” Edwards said. “Consumers are demanding content when and wherever they want it.”
Paul Robertson, president of Shaw Media, said the most exciting change in the broadcast industry in recent years has been “the shift from the linear broadcast to the multiple platforms that we now exploit our content on.”
Apart from being more focused on the on-demand part of the business, with content delivered on a myriad of devices, Robertson said Shaw is “extremely interested” in the impact social media is having on TV consumption. “In our business now, it’s not a matter of just tuning into that original broadcast, although it’s still the star of the show, but it’s really about understanding how all of those different platforms contribute to the overall audience enjoyment,” he said.
Rick Brace, president of specialty channels and TV production for Bell Media, said digital is actually driving TV viewership upward. “It used to be that we used broadcast TV to drive to digital,” Brace said. “What’s really changed for us now is that digital is really being used to drive viewers back to television.”
The main challenge of meeting consumer demand for multiplatform delivery of TV content is the associated costs involved, he added. “Certainly, there are incremental costs that are quite burdensome, quite frankly, all in an environment where we don’t really have a proper measurement system to be able to monetize it. For us, that is a huge business issue that we’re going to have to contend with.”
Having new competitors enter the market, such as Netflix, is also affecting the cost structure of traditional broadcasters, Brace continued. “The biggest impact we’re seeing is the cost of programming. You have Netflix paying exorbitant rates for programs, and you’re going to have the other over-the-top providers doing the same,” Brace said. “So our cost structure is increasing exponentially as a result of that.”
Brace said it may be challenging to compete against these new players using the Netflix business model. “It’s difficult if you’re doing it individually, because you’re never going to have as robust a library of content as what they’re going to be able to provide,” Brace said. “So, do you partner with the folks at the podium here and try to do it collectively? Is that an answer to the problem? Maybe.”
The discussion turned to the role of the CRTC and whether or not the broadcast industry regulator is still relevant in today’s digital media environment.
Brace said the CRTC is a fact of life. “We’ve lived in the shadow of the giant and will continue to do so for our entire existence. I think we need a CRTC that is functional, that is offering the proper protections, and that is offering the certainty that we need in this country to survive if we’re going to stay in the broadcasting space.”
From his point of view, Rogers’s Purdy said the CRTC is not nimble enough in its decision making. “If the CRTC is going to remain relevant, it can’t keep looking at the current trend lines or the recent trend lines. They actually have to get ahead of the curve and start looking at what things are going to affect the business shortly.” (Ed note: It’s worth saying here that the CRTC must try to apply laws, the Broadcasting Act and Telecom Act, which were last updated in 1991.)
Purdy added that broadcasters shouldn’t be looking for regulatory protection on a go-forward basis. “If your business is solely dependent upon regulatory oversight, then you’re in the wrong business,” he cautioned.
Shaw Media’s Robertson said as the broadcast business gets more and more complex, the role of the CRTC really calls for simplicity. “The last thing we need is micro-regulation to deal with the complexity that we’re coping with,” Robertson said, adding that the CRTC’s group licensing framework is an example of a simple solution to a complex issue.
“We did like the group licensing decision, because it was a simple concept,” Robertson said. “It was: take all the money, put it in one pool and spend it on whatever you want. That’s a great, great idea. So we would support the CRTC moving forward with regulation that is broad-minded and staying out of the niggly disputes that tend to happen between the players in the industry.”
