GATINEAU – Using a rear-view mirror approach when it comes to spending requirements will only hobble Canadian broadcasters in an environment of global competition, the three major English-language broadcasters told the CRTC on Thursday.
When facing viewership competition from global players who have no mandated Cancon spend, compared to the various, expensive regulatory commitments met by licenced domestic broadcasters, the industry needs far more flexibility to create compelling programming. Bell Media strongly argued this on the final day of the TV broadcast license renewal hearing for the big three Canadian broadcasters, which of course also includes Corus Entertainment and Rogers Media.
(Ed note. There are some regulatory advantages Canadian broadcasters hold over outsiders, such as simultaneous substitution and must-carry status for conventional TV stations, although those advantages are losing value amid a changing global media marketplace.)
Robert Malcolmson, senior VP regulatory affairs at Bell, noted that the creative groups want the Commission to move backwards to an era where there were more privileges and obligations on all parties.
“The days of a geo-gated ecosystem in which content could be controlled and protected within our borders are gone,” he said, adding there aren’t any guarantees in today’s broadcast world. “Instead we must acquire and create content that can compete on all platforms alongside unregulated players that have no allegiance to our domestic broadcasting ecosystem.”
Both Rogers Media and Corus Entertainment agreed broadcasting competition is no longer limited to just domestic players and that the Commission needs to consider the impact of foreign companies when renewing the broadcast licences.
In its reply Corus highlighted the fallacy associated with the 30% Canadian Programming Expenditure (CPE) requirement – a level, according to some interveners should be the benchmark.
“There is not and never was a legacy 30% CPE.” – Doug Spence, Corus
Doug Spence, VP of financing, planning and analysis at Corus, noted that in 2011 CPE for Corus’ Category A channels was 31%, 16% for Category B channels and 28% for Corus’ conventional TV stations. Each licence had its own individual CPE and “there is not and never was a legacy 30% CPE,” he said. It was a target based on historical spending from the previous licence period.
“Should historical spending for the broadcast years 2007-2009 really be the benchmark for a licence term of 2018-2022? We don’t believe such benchmarks would recognize today’s and tomorrow’s market realities,” argued Spence.
OMNI
Rogers Media noted in its reply that multicultural broadcaster OMNI merits special attention because its well-worn business model no longer works. In fact, revenue has declined 74% since 2010 and without a 9(1)(h) order granting mandatory carriage and a subscriber fee, newscasts and other programming promises won't happen.
(Ed note: While no one will confirm this, it is assumed Rogers will shutter or sell OMNI if its 9(1)(h) wish isn’t granted.)
The company argued against suggestions that dealing with OMNI’s 9(1)(h) application is somehow procedurally unfair and holding a separate hearing on the OMNI request isn’t the answer.
Susan Wheeler, VP of regulatory, media at Rogers, noted this is more a policy-related question rather than one of the CRTC having the legal authority to rule on the application. She said holding a separate hearing would delay the benefits that OMNI Regional can bring.
“When you have a very solid proposal in front of you that will result in the immediate reinstatement, or at the least the short term reinstatement, of news and information programming to third language Canadians I think is something that would outweigh any benefit associated with a longer competitive process,” argued Wheeler.
New Conditions of License?
Under questioning, CRTC chair Jean-Pierre Blais asked all three broadcasters their views on a condition of licence requiring them to hold public consultations in the event decisions were made to shutter local stations. Corus noted that it’s worthwhile considering such an approach. Rogers wasn’t sure what value that would add, but said it would take it upon itself to explain a decision to close a station to affected viewers without a regulatory obligation to do so.
For Bell, it wanted no part of committing to such a condition of licence. Malcolmson said after a brief exchange with Blais that if a station is losing money year over year, the company needs to be in a position to make business decisions.
Blais pressed Bell, saying it’s odd that the large broadcasters want the flexibility from a group-based licensing approach, but consider losses on a licence by licence basis.
“These are emblematic of the rapid changes in audience behaviour.” Gary Maavara, Corus
Kevin Goldstein, VP of regulatory affairs for content and distribution at BCE, responded that times have changed and the traditionally strong specialty channel side of the business isn’t as sound as it once was to support conventional TV operations.
“I think what’s underpinning our argument on flexibility is it’s no longer a situation where you don’t have it here, but you have it over on the other side so you can make up for it. We’ve got a situation where the place where we didn’t have it before is worse and the place where we had it before is declining,” he explained.
There is little doubt that the broadcasting system is coming under extreme pressure from international services able to offer Canadians compelling content without having to comply with myriad regulations surrounding Cancon spending and others. To underscore the challenges that lie ahead for Canadian broadcasters, Gary Maavara, executive VP and general counsel at Corus, pointed to an Ipsos Reid survey of children up to 12 on how they consume entertainment content.
“The survey found that kids have embraced mobile on-demand viewing, and that tablets are their preferred screen for consuming content. In the households surveyed, 72% of children's daily viewing is from streaming services such as YouTube, Netflix and others. These are emblematic of the rapid changes in audience behaviour,” he said.
A decision from this hearing and the French-language one which preceded it is expected in the first quarter of 2017.
