GATINEAU – Day two of the hearing into the applications for a mandatory carriage licence for a national, multilingual and multi-ethnic television service saw the panel of commissioners pick at the shortcomings of the applications brought forward by the final four applicants for the TV license currently held by Rogers Media’s OMNI.
Here are the highlights we saw:
BELL MEDIA WAS FIRST UP with it’s pitch for OurTV, which promised, among a number of other things, the hiring of 53 new journalists spread across the country and some international sites producing 40 hours a week of news and current affairs content for a channel serving 20 language groups. The primary content would be six daily newscasts, each an hour long, in Arabic, Tagalog, Spanish, Mandarin, Cantonese and Punjabi produced in Toronto, Vancouver and Montreal.
While most observers agreed the resources of CTV News would well-power an ethnic, third language news channel and give it a leg up over the applicants who would be starting from scratch, vice-chair telecom Christianne Laizner pressed Bell’s representatives on how they will make sure OTV doesn’t become another cog in the big Bell wheel – and why their proposed wholesale fee of 25-cents/subscriber/month was higher than incumbent Rogers (19-21 cents), CanadaWorldTV (12-cents) Corrcan Media Group (20-cents) and Ethnic Channels Group (23-cents).
While each of the applicants have detailed plans for advisory boards, which will meet regularly to help guide programming and be the channels’ grassroots links to the various language communities they plan to serve, Laizner wanted to hear more detail from Bell on its day-to-day governance.
“If you’re providing a 9(1)(h) service as a vertically integrated company and there is no check on the independence on that service, I’m not feeling a lot of confidence about the advisory council concept as an alternative to a diverse governance structure. You’re not giving me much in the way of a thought out plan for how you can get some independent views and implement those,” she said.
“I don’t think the issue is really whether it’s vertical integration or not,” said Alain Strati, assistant general counsel for regulatory affairs at Bell Media. “I think it’s a question of the ability and the focus on community feedback. I understand the will for formalized processes but the reality is it’s going to be a day-to-day process” which won’t and can’t wait for a monthly or quarterly council meeting.
“But what makes it exceptional and not just another form of CTV News geared towards local ethnic communities?” – Christianne Laizner, CRTC
“But what makes it exceptional and not just another form of CTV News geared towards local ethnic communities?” Laizner persisted. “You’re saying that you want to draw on community producers and talk to community leaders, but you’re not giving me any sense of how you draw them into the tent, how often you draw them into the tent, how much you will listen to their views, and how that’s reflected in the programming.”
Strati pointed to the numbers of hours of news and other programming promised in the application, different than what it already does (the group also noted that OTV would not air any repeats of CTV programming) as how it will super-serve the many language communities and ensure ethnic third language producers will have ample time to air their programming – and the company’s ideas were supported by Mariane Araleh, executive director of The Canadian Conversation, who was on the Bell Media panel.
Turning the conversation to the wholesale rate, Laizner wanted to know why Bell’s was so high in comparison to the other vertically integrated company directly in the mix (Rogers) especially since Bell is forecasting higher ad revenues for their channel as compared to OMNI.
Strati simply said OTV programming will be “bigger and better” than OMNI, with additional perks like 5% of revenues dedicated to community producers, and that it costs serious money to hire 53 new journalists. Its reps also pointed out Rogers has committed to have a service which is break-even, where Bell has accounted for a 4% profit margin.
However, continued Laizner, what if ad revenues don’t come in as expected? “Then we would have to go back and take a look at our cost base,” said director of finance John Poutanen, but “the very last thing” it would do is cut Cancon.
WHEN NON-PROFIT applicant ICTV began its pitch for Tele1 and Tele2, it brought along a surprise: revised financials. Since the documents were brand new and just added to the record at the beginning of their appearance, commissioners were not able to dive deeply into them for questioning, but after having a look at them, some of their assumptions seem overly optimistic, to say the least.
It was already asking for the highest fee of any applicant (40 cents), meaning it would bring in over $46 million in year one, but the estimates on ad sales is what’s truly shocking as the proposal envisions $8 million in ad sales in year one, rising to $16 million in year two and staying there or close to there each year of its licence term.
Rogers, which has been running OMNI for a while, only earns about $9 million/year now in ad sales, and predicts that will fall to $6.9 million by 2025. Laith Marouf, CEO and policy consultant for ICTV said he was “surprised how little advertising OMNI is making in comparison to APTN when the supposed market OMNI serves is five times that of APTN” and chalked up their low ad sales to “carelessness” with the third language communities, adding there is money there if the TV channel was better.
For what it’s worth, APTN reported ad sales in 2016 (the latest figures available) of $2.58 million.
CANADAWORLDTV, WHICH IS an application submitted by a partnership of Asian Television Network and Telelatino (which is 50.1% owned by Corus Entertainment), also talked advertising and noted – because they have decades of experience selling ads in the ethnic, third language market – that it can be a very tough go and they predict ad sales of $2.1 million each year of a potential license.
Executives believe they can succeed at it where Rogers has not because OMNI is sold as just one of many Rogers outlets for ad agencies and because an ethnic buy is not as straightforward as buying time on Sportsnet, for example, sales reps might default away from harder OMNI sales, said CanadaWorldTV counsel Ken Engelhart. “It is the hardest sell, but we know how to sell it,” he said. (Telelatino, for example, earned $5.2 million in total ad sales in 2016.)
CanadaWorldTV looks like a good third language, ethnic service featuring lots of news and original content with individual newscasts planned in 20(!) different languages – and at a very low price, but it had to answer questions about whether or not its fee was too low – and they conceded that 13-cents would definitely make more sense, given the decline in TV subscriptions which have happened since the application was submitted over a year ago.
“When you think about it, a linear channel is kind of dumb for third language programming.” – Ken Engelhart, CanadaWorldTV
As well, the company had to explain how its proposed VOD service (it wants carriers to offer up to 1,000 titles on VOD so third language Canadians who speak over 40 languages can access content all the time) could be included in a 9(1)(h) order since it has not applied for a VOD license, which usually go to carriers, not broadcasters.
The applicants told the Commission however, that making available a roster of titles for carrier VOD is common practice now, but it would need the CRTC to use its powers under 9(1)(h) to force BDUs to carry all of that CanadaWorldTV content on their VOD platforms. “What we’re doing is a benefit to the BDUs” anyway, said Telelatino president Aldo Di Felice.
CanadaWorldTV would pay for the encoding of the content and pass it through to the carriers, they said, and it is a key plank for its TV channel. However, if the Commission decided not to force the VOD aspect onto the BDUs, would they still carry forward with the service,” asked chairman Ian Scott?
“We would obviously still offer it and possibly have lower costs,” said Engelhart, “but we think it’s a good part of the service because it gives third language people customization.
“When you think about it, a linear channel is kind of dumb for third language programming because you’ve got 20 different languages on there but you only speak one of them, so you turn your TV on and you’ve got a one-in-twenty chance of watching something you like, where if it’s on VOD, there it is, 24/7, everything you want… it only makes sense.”
The hearing continues Wednesday morning were each of the applicants will comment on each other’s applications, followed by interveners both for, and against, the proposed services.
Ed note: We had to depart before the Corrcan Media Group presentation finished at the end of the day. We’ll add some coverage from them later this week.
