GATINEAU – Quebecor Inc. president and CEO Pierre-Karl Péladeau challenged the CRTC today to re-write its “little red book” of more than 400 broadcasting rules and regulations or risk seeing the Canadian broadcast industry bypassed by the global digital environment.
In a presentation before the CRTC’s hearings on broadcast distribution and specialty services, the head of the powerful Quebec media conglomerate which owns, among other assets, #3 cable company Videotron and top Quebec broadcaster TVA, said that it would be a mistake to go through these “crucial” hearings and make only minor adjustments.
“An accumulation of regulations won’t solve anything; they will push consumers to seek ways to circumvent the system. One thing seems evident to me. If we don’t change the structure, Canada will have chosen for all intents and purposes to exclude itself from the global television industry.”
In a wide-ranging exchange with CRTC commissioners, conducted in French, Péladeau said the industry cannot survive in its current state, and that without significant change, Canadian programming would suffer the consequences.
“Technological evolution has shattered this rigid and comfortable structure. There is no more distribution monopoly. Consumers can choose between cable and satellite and increasingly, the Internet, and soon, wireless broadcasting,” he said. “Within a few years, the Internet may be the principal distributor of television programs around the world and without any regulation.”
In this context, he said, if regulations continue to restrict broadcasters, thus limiting consumer choice, consumers will simply go elsewhere to find the programming they want.
Most of the existing regulations, he said, were created decades ago “in a universe that no longer exists. I hope we can count on you to update and diminish the bureaucratic burden.”
Most Canadians, he said, seem to agree, citing a survey commissioned by Quebecor that says that 86% of respondents favour policies to promote the production of Canadian programming and that 65% believe the regulatory framework must be altered.
Péladeau also described a changing industry landscape that now sees specialty channels dominating the market and the generalist networks watching their part of the market “melt like the snow under the sun”.
“The regulatory status that gives them access to advertising revenues as well as mandatory carriage fees places them in a formidable position in the advertising marketplace.”
On the other hand, the private conventional networks, such as Quebecor’s TVA, are “cornered”, he said, because ad revenues alone cannot ensure profitability. At the same time, they are burdened with greater broadcast obligations than specialty services, having to provide news programming and original dramas.
“So we have to square the circle and survive without carriage fees, with ad revenues declining, and the regulatory burden unchanging,” he said.
In discussing the issue of carriage fees for conventional broadcasters, Péladeau said conventional broadcasters as well as specialty services should be entitled to collect them. However, Quebecor’s position is different from other broadcasters in that in exchange for carriage fees, it would give up must carry status and negotiate with other carriers.
However, he slammed CBC/Radio-Canada for wanting the same right. The public network, he said, receives public funds, a significant proportion of money from the Canadian Television Fund, advertising revenues, as well as carriage fees for its specialty channels.
“How can one not be shocked to learn the public broadcaster is looking to collect fees for its two principal channels, on top of all the advantages it gets.”
Questioned by CRTC Chair Konrad von Finckenstein about allowing advertising on video-on-demand (VOD) services, Péladeau said such a move would help because consumers have embraced VOD, with screenings rising from 4 million to 35 million.
Robert Dépatie, president of Videotron, noted that 14 to 18-year olds are spending more time streaming programs online than watching TV. The challenge now, he said, is to invest the money needed in to keep people in front of the TV and away from the other downloading or streaming options.
Péladeau also reiterated Quebecor’s commitment to Canadian content, pointing out that 92% of TVA’s programming spending goes to homegrown production.
“I don’t see that less regulation would mean less Canadian content,” he said in reply to a question from Leonard Katz, CRTC’s vice-chair of telecommunications. “We firmly believe in Canadian programming and there is no question that this would change…and yes, I believe there is a return on Canadian programming.
“Perhaps it’s different on the English side. But for TVA and the French market [in Quebec], investing in Canadian programming brings in audiences.”
On the question of genre protection, Péladeau suggested it may have to be watered down, simply because “technology is driving everything”.
But on this and other issues of de-regulation, he urged the CRTC to undertake a “migration”, or slow transition, towards de-regulation between now and 2011 when the transition to digital is made among conventional television stations and the market is more open.
Quebecor also announced Monday it has created a new website (www.ocanada.tv) to inform Canadians about its vision for the future of Canadian TV.
Glenn Wanamaker is Cartt.ca’s Quebec Editor.
