By Ahmad Hathout
A television network that focuses on Canadian 2SLGBTQIA+ communities wants the CRTC to broaden its distribution on basic television, or at least set a base wholesale fee for negotiations with distributors.
When the CRTC came to renew the licence for OUTtv in 2022, it granted the service in the English-language market must-offer status – requiring broadcasting distribution undertakings (BDUs) to carry the channel but leaving it to the subscriber to pay for the service – instead of must-carry status with a guaranteed wholesale fee that is available to all subscribers of the BDU. That status will remain until the next licence renewal period in August 2026.
But despite the CRTC ordering that BDUs to offer the service in pre-assembled or thematic packages with the “highest penetration rates,” it did not address packages or wholesale fees. OUTtv said in a Part 1 application published Friday it’s not getting anywhere near its expected subscriber haul and not drawing an adequate revenue source to continue investing in content.
“At this time, OUTtv’s subscriber penetration across the English-language BDU environment is unjustifiably – scandalously – low at just 6%,” said the application, which asks to amend the terms of its licence. “We have achieved this level only due to the one agreement reached with a single BDU. By our best estimate, penetration on Bell’s systems is 5.05%, on Rogers (including former Shaw systems) 5.8% and on Telus 4.9%. How could this possibly reflect carriage of OUTtv’s programming service in the highest penetration package offered by these BDUs?”
To illustrate, the service said it reported one million subscribers and generated $4.2 million in subscription revenue in 2019. In 2023, it said it reported just over 400,000 subscribers and generated $3.3 million in said revenue. Despite this, the network said its advertising revenue has soared by 786 per cent from 2019 to 2023, illustrating that there is value in its programming.
OUTtv claims that it hasn’t been able to negotiate a fair wholesale fee, except in that one BDU instance, which it said has boosted its number of subscribers between 2023 and 2024.
“OUTtv still experiences extreme marginalization in the broadcasting system,” it said, adding it has made “good faith” efforts on negotiations. “This has resulted in very low penetration among BDU subscribers and declining subscription revenue. OUTtv’s programming service has not been profitable for many years – it is only through continued investment and our international reach that we have remained viable. This is not sustainable – or appropriate.”
Despite the CRTC rejecting its request in 2022, the network is renewing its call for the CRTC to establish a wholesale rate – of 12 cents per subscriber per month – to assist in negotiations on discretionary carriage or, if that fails, as a fallback rate for the service to be carried on basic television. It’s also asking for the commission to broaden its distribution to exempt BDUs – that is, those that do not require a licence to operate.
“The proposed amendment would ensure distribution of OUTtv either as a basic service or, if BDUs provide distribution in the highest penetration suitable package and provide a fair and reasonable wholesale fee, as a discretionary service with OUTtv’s express consent,” the applications said.
The service, which touted itself as the exclusive home of the multi-Emmy award winning RuPaul’s Drag Race, said in exchange for that wholesale rate, it will up its obligations to Canadian content to more than double its current financial commitment – at $5.5 million per year.
As such, it is also asking the CRTC to simultaneously raise those to a minimum of 55 per cent its Canadian programming obligations, with the same minimum in the evening broadcast period; a minimum of 55 per cent of prior year revenue to Canadian programming expenditures (CPE); a minimum of 10 per cent of said revenue to Canadian programs of national interest (PNI); and a minimum of 75 per cent of expenditures on Canadian programs, other than on news and information programs, be made to an independent production company.
“This will translate into some higher cost productions; but, more importantly, to more original programming that is able to ensure wider reflection of 2SLGBTQIA+ creators, talent and stories,” it said in its application, adding that will translate to more drama and documentaries films and series.
Photo via OUTtv
