IN THE FIRST PART OF Cartt.ca’s exclusive, wide-ranging interview with the Canadian Broadcasting Corporation CEO, Robert Rabinovitch talked about stable funding, the TV Policy Review, The One, CBC radio and SRC, among other topics.
Click here to read Part I of the story from last week.
In the second part of our chat, Rabinovitch goes over on demand strategies, HD, CBC Sports (the interview was prior to Nancy Lee’s departure), local news and the residual effects of the 2005 lockout. What follows is an edited transcript.
Greg O’Brien: Let’s switch back to English TV – but actually this question involves French CBC television as well – and talk about high definition. Replacing every single tower you have with a digital transmitter, from the CBC’s point of view, is just not really possible, correct?
Robert Rabinovitch: Unless the government wants to pay for it. But if I was a policy person as I once was in government, I don’t think I would, given today’s technology, advise government to replace all the towers.
The first thing we have to recognize is the studios. That’s expensive and that’s upfront costs one has to pay. On the French side, we’re very advanced and the board just approved (upgrading) six out of eight of our studios in Quebec. We’re the single-largest producer in North America of French programming and six out of eight (studios) will be HD.
GOB: When will those be done?
RR: During this year. We’ve already done 2 or 3, including our biggest, Studio 42, which does about three programs a week is in HD. So, we’re an HD presence because we produce so much stuff on the French side right now… we’re moving quite rapidly in HD on the French side. In terms of production on the English side – less quickly.
We’re also putting more money into working with our independent producers.
Then the next question becomes the delivery of HD. There, we’re into the towers game with over 600 towers in Canada. And a lot of (that construction) was paid for by the government in the ’70s when they had what was called the Accelerated Coverage Program.
They paid us to put towers into communities of 500 or more. Well, you have to ask yourself, the cost of production on that, the cost of replacement, is going to be outrageous, especially when in some of these areas, 90 to 95% of the public is getting it through a BDU.
GOB: If you’re out in the hinterlands, you’re not picking up over-the-air TV unless you only enjoy having one channel or two channels.
RR: One of the phenomena that’s happened since satellite’s been introduced into Canada is we always used to talk about the underserved areas in terms of channel selection as compared to the (urban) areas. If you look at the numbers – and it’s in our (TV Policy Review) presentation – the larger number of people who don’t have satellite or cable delivery are in urban areas.
They’ve chosen not to get it. If you go into the hinterlands, it’s almost all now satellite or cable.
GOB: Up north, every little shed along the side of the road has a satellite dish installed.
RR: I do work for the Nunavut Trust, so I go up north from time to time, and it’s astounding to see the satellite dishes everywhere in the north now.
GOB: And it’s neat to see how they’re pointed, too. I mean just barely over the horizon.
RR: Right on the horizon line, you’re absolutely right, this is not the Mediterranean or the equator. Anyway, one of the things we put forward to the CRTC in our submission is that what we need is a hybrid model where, with 44 towers over the air, we can reach about 80% of the population.
The rest should be reached through BDUs in one form or another.
(The CRTC would) have to change their carriage rules to protect us all, but that to us is an economically efficient model (for HD transition), and consistent with the 1991 Act that says that we should all be using the best technology as it becomes available… There are different ways to deliver it and the only concern we have is we think there should be a firm cut off date between analog and digital.
And if that’s what do you do, how do you help people migrate from one to the other? You don’t want people all of a sudden to wake up one morning and not have any service.
GOB: That’s where some people are talking about giving away digital set tops.
RR: I think there are two approaches. There’s the approach that the Americans, as I understand it, are using, where they’re giving $20 per television for a set top to convert the digital signals back down for analog TV sets. The other is to say basically, maybe there should be a Canadian tier, which the BDUs give for free.
The beauty of it, quite frankly, from a BDUs point of view, is you’re now in the house with the set top box. And once you’re in a person’s house, you can up-sell them.
GOB: And from the U.S. government point of view, they can spend that money per TV because they’re getting it from the sale of the analog spectrum to wireless companies.
RR: Precisely.
GOB: Let’s talk a little bit about sports as well. What’s your view on CBC Sports going forward and on retaining the NHL Saturday night hockey rights?
RR: We are committed to stay in professional sports – for a couple of reasons. Number one: It connects the country together. We feel that’s one of our responsibilities.
Number two: It helps finance our amateur sports programming. If it wasn’t for that, I don’t know if we could afford to continue to do amateur sports, because amateur sports are not cheap. We’ve always said our philosophy is when you see an athlete at the Olympics, it won’t be the first time you saw them because we’ll have shown them already. And you know, that is quite different from what you see on the specialty sports channels.
So, we are committed to pursuing professional sports. But we’re also committed to not overpaying.
We think it’s absolutely wrong for us to compete with the private sector to win professional sports by writing a big cheque. I’d like to win these things the way we did with FIFA, where our number was, I won’t say much less, but it was less than I know the private nets bid for it.
But (FIFA) liked our combination. They liked the fact that we were going to show the sport in the off-years and help build the soccer audience.
The answer is we want to be there. We think it’s critically important and it’s also the source for us of a significant amount of programming. It would not be easy for us to replace all that programming.
GOB: And the revenue from it as well.
RR: The bottom line is it’s got to pay its way and hopefully contribute to doing other things in the sports field.
GOB: That was always CBC’s m.o. with professional sports – that there isn’t really tax money going into funding professional sports, it pays for itself by the advertising sold around the CFL or around hockey.
RR: As you know, the games are structured in such a way as to allow for advertising and therefore, the advertising should be the way in which one finances the games. And that’s our philosophy. We don’t want to use public money for professional sports. But, we want to be in professional sports.
GOB: But what happens then, if CBC does get outbid for the NHL or CFL?
RR: It’s going to be very difficult, As I said at the Committee, it’s something that we will have to very seriously evaluate our options at that time. It’s not going to be a bidding contest in that sense, where we’re going to use our public monies for that, because as I said before, over 50% of the money in English television is from the sale of advertising.
So, (losing hockey) would change our model quite dramatically. And there’s no question about it – it’s a significant possibility.
I can’t say the same about football. Football – you know, whether we get it or not – I’m not so certain is that important anymore. We’ll have to have the Grey Cup, but when you look at the whole schedule and alternatives, maybe it should go only on specialty channels.
We’ll see what happens.
GOB: When you look at the reported package CTV was said to be offering (reported by the Globe and Mail as a $1.4 billion offer), it involves a whole parcel of things beyond just TV. It’s mobile and Internet coverage and on demand and all the rest of it.
RR: We’re all doing the same things though, Greg.
GOB: That’s what I wanted to talk to you about as well, CBC’s mobile plans. What do you have in mind?
RR: Well, more and more, because – that’s why I told you the story about the iPods (from Part I).
IPods and radio is a clear example of that. We’re into a dramatically different era in terms of how people are going to watch television. We’ve broken down the linear presentation of TV so we now give you all types of options and I think what you’re going to find is the world is going to bifurcate. There are going to be people who are going to use their mobiles, their small screen, to get up to date information.
And on that, Newsworld is already there. That’s how we delivered the Olympics. We did fabulously well, and had good audiences, with mobile delivery of Olympic results.
GOB: I watched (Canadian bobsledder) Pierre Lueders live on a Bell Mobility phone I tested while I was going up a ski lift during the Winter Olympics. The people beside me were impressed.
RR: So, some people are going to want that, because they want that instantaneous information – it’s a Blackberry world.
Others are going to say "no, I want that 42-inch HD screen presentation." Some will say ‘I want both."
The point is, we will be in both, and we will do that on TV with hockey, we will do that with the sports that we have – when our FIFA contract allows us to do it we have all rights to do all things. That’s just the reality of where the world is now going. Multiple delivery systems, liberating people to watch programming when and where and how they want to see it.
GOB: The other consideration that’s still being tested is when and how do you loosen up popular linear TV shows where you’ve got a great program which you need people to tune into on a certain day. How do you decide when to make it available to Rogers Cable on demand or you know, Bell ExpressVu pay-per-view or Telus Wireless?
RR: The answer to that is that it’s going to be "soon." It’s going to be like (ABC has shown) Desperate Housewives, literally the next morning.
In fact, the big discussion right now, or a big discussion right now with Nielsen’s – is in counting audiences and counting eyeballs. The people who watch it the next morning or two days later or three days later, should they be counted, from an advertising point of view?
The consensus right now is to say yes for the first three days. And BBC’s way of doing it is to say "the first week you’ll have the programming for free, after that you’re going to have to pay a price for it."
So, all these models have to be worked out, the pricing model, the cut-off date, but there’s no question that we’re breaking down the linearity of presentation. And you know, I think that’s to the better. We’re already doing it with PVRs.
I like to watch Formula 1 Racing, but I’ll be doggone if I’m going to watch it at one in the morning. So I watch it at seven when I get up on my PVR, I just make sure not to know what the result is, so philosophically for me, it’s real time.
GOB: I did the same thing with the Japanese Grand Prix on the weekend.
RR: That’s the 1 a.m. one I was thinking about.
GOB: I started to watch it but was falling asleep, so I hit record and then just went ahead and fell asleep.
What does all of these changes, all what we’ve been talking about, do to local news?
RR: That’s a very good question. And from our point of view, we are re-evaluating all of our news services. In particular, we are looking very seriously at our role in local news. As I said at the Committee, our numbers in local news are abysmal.
I can’t say it in a nicer way. So the question is should we be in local news, or should we abandon it? Right now, my operating assumption, in my working with the board is that we want to be in local news. But if we want to be in local news, we’ve got to do it well. I think that’s something the public broadcaster can do, as more and more you’re finding private broadcasters are beginning to withdraw from local news because it’s not the profit centre it once was.
GOB: Being from Timmins and having lived in Sault Ste. Marie as I have, when I go back there or talk to my family and friends – they know what industry I work in – and they still complain about how there’s no MCTV broadcast station in those two towns, that it’s all consolidated in Sudbury.
RR: The point is that if local news is not the profit centre it once was, perhaps there’s an opportunity for the public broadcaster to be more into local news.
GOB: But how would you do it? Would it be the traditional studio format, or would it be, your radio reporter and a webcam?
RR: I think it’s going to be a combination, seriously. We’ve done a lot on news integration at CBC, and we’re going to do a lot more. On the French side, as you may know, I’ve done away with the VP radio, the VP TV, so there’s a VP French Services.
One of the reasons was to stress integration so that our people are trained to go out and be able to do radio reports and TV reports. And we’re doing more and more of that. If we just use our resources in the field in a more intelligent way and break down the barriers between services, and hire accordingly and train accordingly, I think we can turn out a product both for TV and for radio that we can be proud of. But it’s going to take work. It’s going to take an awful lot of work.
GOB: Have the effects of the lockup been mitigated now?
RR: I think in most cases it has been. I still think there are people who are living in the past, very few. But when I talk to staff, the lockout is not an issue. In fact, some of them joke and say "lockout or strike, you call it what you want, which they wouldn’t have done a few months ago."
It’s not something one wants to do very regularly, but… the fact of the matter is at the end of the day, we are very satisfied with the contract that we negotiated. We think we have the flexibility to move forward, and I think if people read the contract they will see that we did quite well. And I’m not boasting because I think the employees did very well as well.
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