CRTC addresses financial viability of news in local and community TV decision
GATINEAU – The CRTC is redrawing the local news and community TV landscape, however, it stopped short of creating a new funding mechanism for all local news operations.
Rather, the Commission is giving vertically integrated entities added flexibility in how they allocate money, while independent broadcasters will get access to a new fund and some immediate financial help (however, the full, new funding mechanisms don’t start until September 2017).
The Commission argued in Broadcasting Regulatory Policy 2016-224 that the VI companies (Rogers, Bell, Quebecor, Corus) have the wherewithal to produce high-quality local news because of the synergies gained through the consolidation of media and distribution assets. It acknowledged that news needs additional support so it gave the VI companies the ability to redistribute some money currently allocated to community TV to local news.
Specifically, terrestrial BDUs serving large metropolitan markets (Montréal, Toronto, Edmonton, Calgary, Vancouver) will be allowed to shift local expression contributions to community programming in other markets or to local stations for the production of local news.
“Licensed terrestrial BDUs serving non-metropolitan markets will be required to devote at least 50% of their local expression contribution to community programming in their own markets and may allocate the other half to community programming in other markets and/or to designated local television stations for the production of local news,” stated the decision.
There’s a caveat to this flexibility gift from the Commission.
“Ownership groups operating both BDUs and local television stations will be required to maintain the operation of all of their local stations over the new licence period to benefit from this flexibility,” added BRP 2016-224.
Small independent stations, on the other hand, don’t have that financial flexibility, and as such they will get access to additional resources. A new fund, dubbed the Independent Local News Fund (ILNF), will go into effect September 1, 2017. However, because some of these stations face imminent closure, the Commission has adopted an interim measure to help in the short term.
“Effective 1 September 2016, the Commission will make all stations belonging to VI ownership groups ineligible to receive funding from the SMLPF and require the fund to redistribute the funding currently received by those stations among the remaining recipients, according to the SMLPF’s current allocation method,” stated the decision.
The ILNF will be funded by 0.3% of terrestrial and DTH BDUs contributions. “This should ensure that the fund will be in a position to distribute approximately $20 million per year to support the creation of locally reflective news and information by independent stations,” says the CRTC.
In addition, new independent stations will be able to secure funding from the ILNF. They include: the Channel Zero station CHCH Hamilton; the RNC stations CHOT and CFGS Gatineau; and the Groupe V stations CFJP Montréal, CFAP Québec, CFRS Saguenay, CFKS Sherbrooke and CFKM Trois-Rivières.
“The Commission considers that the community channel does not require the same level of funding as it did in the past to achieve the objectives of community access and reflection.” – BRP 2016-224
The ILNF will be administered by the Canadian Association of Broadcasters.
Not only is the Commission adding new financial support for independent stations’ news production and giving VI companies flexibility to allocate more of their existing resources to news, but it has also come up with its own definition for local news. In a nutshell, it has to be locally reflective. But there’s more:
• the subject matter relates specifically to the market a station is licensed to serve;
• it portrays an onscreen image of the market by, for example, including its residents or officials or featuring coverage of its municipal or provincial government; and
• it is produced by the station’s staff or by independent producers specifically for the station.
BRP 2016-224 also creates a new funding model for local programming that puts less emphasis on community TV. The decision states that because the tools to create video programming are much more accessible than ever before and that more groups are offering training on video program production, the need for community channels has lessened.
“The Commission considers that the community channel does not require the same level of funding as it did in the past to achieve the objectives of community access and reflection,” states the decision.
Under the new local TV funding approach, terrestrial and DTH BDUs will have to contribute 5% of revenue to local programming and 0.3% to the ILNF. Terrestrial BDUs will have a maximum contribution to local expression of 1.5% of revenue with 80% of the contribution going to the Canada Media Fund (CMF) and the rest to one or more of the Canadian Independent Production Funds (CIPFs). DTH providers will have a maximum allowable contribution of 0.6% of revenue to local news. Up to 0.5% of their Canadian programming contribution goes to one or more of the CIPFs with the remaining to the CMF.
These changes “to the BDU contribution model is the result of the Commission’s determinations in this policy regarding the diminishing need for funding for the community channel and the increasing need for funding for news programming,” says the CRTC.
During the hearing CACTUS had called for the redirection of BDU contributions to local expression into a Community-Access Media Fund (CAMF). The Commission dismisses this notion in the decision, noting it’s similar to a proposal made during the community TV review in 2010.
The CRTC did make some adjustments to the community TV policy though. Funding for direct costs for community TV will be increased gradually from current levels of about 60% to 75%. This latter number will come into force in 2021 and will remain in place for all subsequent broadcast years.
We’ll have more to come on this decision as everyone digests it.
