OTTAWA-GATINEAU – There just isn’t enough cash in the system for conventional broadcasters to convert to digital television, representatives from CBC and TQS told the CRTC today.
And the only way free up some resources to rectify that is a fee for carriage model.
CBC/Radio-Canada’s president and CEO Robert Rabinovitch, EVP of CBC Television, Richard Stursberg; EVP of French Services Sylvain Lafrance; VP and CTO Ray Carnovale; and VP strategy and business development Michel Tremblay, were part of a the Corp.’s panel in front of the Commission this morning.
All of the CBC’s funds are tied up in producing and promoting its shows and satisfying the cultural requirements placed upon it by government, said Rabinovitch, meaning there is no cash left over to replace the hundreds of transmitters stationed across the country and upgrading them to digital.
"Access to additional funding, particularly subscriber revenue, is absolutely crucial," said Rabinovitch. "It’s crucial, critical, for the Commission to act now."
CBC/Radio-Canada’s position is based on the premise that Canadians will be better-served if their broadcast system is equipped to respond to the opportunities and challenges posed by new communications technologies and shifting consumer habits, and is shaped around two central recommendations to the Commission, says a CBC press release issued just after their executives’ appearance.
However, added Stursberg, during this morning’s questioning by CRTC Commissioner Rita Cugini, while the CBC is pushing for these changes, it wants the rest to stay the same. The limit of 12 minutes of advertising per hour should remain ("We believe it should remain at 12 minutes for everybody. There is a pie that is not growing, it is shrinking," he said), as should mandated simultaneous substitution. "All of the current regulatory requirements should be maintained," said Stursberg.
1) As reported by Cartt.ca a number of times this year, CBC/Radio-Canada is advocating a hybrid proposal that would ensure, within the limits of what is economically reasonable, that 98% of Canadians would receive the CBC/Radio-Canada digital signal (delivered either over the air or via satellite and cable).
CBC/Radio-Canada is also recommending the Commission and Industry Canada establish a target conversion date for the transition from analog to high definition television service, as has been done elsewhere.
(TQS told the Commission this afternoon that it may only erect a single HD transmitter, in Montreal, and rely on BDU distribution to hit the rest of its viewers.)
2) CBC wants the CRTC to establish conventional broadcasters’ eligibility for subscription revenues. In television, the advertising-based business model on which conventional broadcasting has relied is at risk due to the number of channels vying for the same revenue; commercial skipping; and the migration of marketing spending to the Internet and other platforms, the Ceeb outlined.
"In order to continue to be able to achieve its policy objectives, the Commission’s next TV Policy will need to create a framework that supports the ongoing health of conventional television by recognizing the current challenges facing this sector," added Rabinovitch. "A broadening of conventional broadcasters’ business model is necessary, if they are to continue to serve as the cornerstone of the Canadian broadcasting system."
But what about selling that subscriber fee to Canadians, who surely won’t want to pay more, asked Cugini.
Citing recent cable and satellite rate increases, Stursberg added "I would contest the contention that the fee must be passed through… "I don’t think the Commission need to be concerned about the affordability of this, given what has happened (with rates). Despite the rising costs of cable and satellite, the level of penetration has increased very substantially."
Canadian BDUs will address the contention of their former association president (Stursberg was Canadian Cable Television Association president from 1996-2000) and present their thoughts that a conversion to digital is purely a cost of doing business later this week when they face the panel.
Stay tuned to Cartt.ca for more updates.
