By Ahmad Hathout
Corus is urging the CRTC to hurry up and make a decision on a proposal to grant the media company temporarily relief on its financial obligations to Canadian content and pandemic back pay.
Next Friday will mark exactly six months since the CRTC proposed granting the pure-play media company “exceptional” relief by reducing its spending to programs of national interest from 8.5 to 5 per cent of previous year’s revenues and by extending the time to pay back what it already owes the regulator from the pandemic relief period.
In the days after the decision, Corus CEO Doug Murphy called the proposal the “most substantive” approach to regulation in years. That’s in part because the regulator, according to Corus, recognized the financial predicament that traditional Canadian media companies have been in: a cocktail of a bad advertising market, increasing competition from foreign streamers, and the traditional broadcasters having to bear the load of supporting Canadian content.
But by Friday, the company said there has been radio silence from the regulator on the matter.
“We’re still waiting on a bunch of items: we’ve got two applications before the commission on the final decision on our relief application of which the notice was issued last October, but that’s still in the queue somewhere,” Murphy said on the company’s fiscal second-quarter 2024 earning conference call with analysts.
“As regards Bill C-11, we’re preparing for the second phase of the proceedings, and we do expect at some point something coming out of the CRTC to address their findings on the first phase and the discussion and determination as to how the foreign-owned internet media broadcasters will contribute to the system in an initial way — those are two switches that need to be closed,” he added.
“I would not hold my breath, but they are in the pipeline,” he added with a giggle. “We’re encouraging the CRTC, who typically listens somehow on our calls, to get on with it because the industry needs changes and needs it fast,” he concluded.
Bell CEO Mirko Bibic appeared Thursday to defend the company’s decision to layoff employees, including journalists, as the company navigates what it describes as a difficult advertising climate and regulatory hurdles.
While Murphy said he could only speak for Corus, he noted that the regulatory system has not adapted to the realities of the modern world.
“News really, in my opinion, should be the only regulatory obligation that Canadian broadcasters have,” Murphy said Friday. “We shouldn’t have to be required to spend money on dramas or anything else. Unfortunately, our system is rooted in the 1991 Broadcasting Act, which was designed at a time when the production industry in Canada was nascent and so the oligopoly profitability of broadcasters in those days was taxed to fund the launch of the industry and it worked.
“Now what we have is obligations that are increasingly punitive on broadcasters given the competitive pressures in the market, and some broadcasters are making decisions on what to do to cut costs and that’s in their right…in our world, we continue to make investments in Global News…that’s a growing business for us, but we also have to work differently and continue to find ways to be innovative.”
News, broadcasters have said ad nauseam, is among the most expensive content to make.
In the meantime, Corus said it has been refocusing its pitch to advertisers by focusing on overall video impressions instead of delineating traditional television and digital video. Part of the logic comes from the fact that the company has been pushing its digital products with premium video – such as its Stack TV product – that is attracting an increasing number of eyeballs as it broadens its distribution to more platforms.
“Remind the agencies that it was only a couple of short years ago where they were saying, ‘you guys need to give us more video impressions because those on linear are fallow,’” Murphy said of the job on Friday’s call. “So here we are: we got a lot [of impressions], and so the expectation and the outcome we’re hoping for — and we’re working very hard to effect — is that we’re going to redistribute the digital media mix and now we’re going to redefine TV away from TV to video and we’re going to reallocate share of that advertising spend.
“Our lifestyle channels have a lot of appointment live viewing, so that’s why we need to remind advertisers and marketers about,” Murphy added. “When you think about the specialty networks, 50 per cent of Canadians don’t watch sports every week. If you are heavying up on sports and sports alone, not only are you paying a lot – it’s a highly cluttered environment and you’re missing a lot of the audience you’re probably wanting to reach, so that’s another one of Corus’s unique selling features: we do provide a differentiated ad buy, with much better efficiency given [cost per thousand] and very effective reach and targeting.
“That’s the job, right there.”
For the three months that ended on February 29, the media company’s revenues declined 13 per cent compared to the same quarter last year, with less gross money coming in from both the television and radio segments. The television segment saw 14 per cent less money this quarter, at $278 million, versus the comparable period, while radio saw a 4 per cent decline to $21.5 million over the same period.
Profit was $52.7 million in the quarter, a decrease of 11 per cent compared to the same period last year. That was driven down by television advertising and subscriber declines. That was offset by a 145 per cent jump to $857,000 in radio profit, which was in part attributed to lower expenses.
Screenshot of Corus CEO Doug Murphy
