CAB seeks slew of supports in “transition” to for-profit Canadian programming

The CRTC will play a crucial role in ensuring a viable broadcasting system – at least during a transition period, according to a vision of the future of Canadian broadcasting put forward by Canada’s private broadcasters. Many of the recommendations promoted by the Canadian Association of Broadcasters (CAB) during a recent appearance before the Canadian Heritage Parliamentary committee studying the relevance of the Broadcasting Act involved the broadcast regulator. Regulatory support along with government financing and tax incentives are needed in a "transition period" toward what the CAB sees as a more deregulated, open-market broadcasting system whose cornerstone will be the production of commercially viable Canadian programming, the Standing Committee on Canadian Heritage was told on March 21. "The current economic realities are such that, commercially speaking, outside of television news and television sports, other program categories do not always make money," CAB president and CEO Glenn O’Farrell told reporters following the association’s presentation. "They make money very irregularly, and by that I’m referring primarily to high-end expensive dramatic programming. You do not make money by airing that programming when you consider all the sources of revenue that go against the cost of buying it, and we want to change that." Echoing comments made last year by former CAB leader Michael McCabe, O’Farrell pointed out that when the Hollywood studios can use technology to deliver programming directly to Canadians, broadcasters here will have to distinguish themselves with homegrown productions. "We believe that there’s enough ingenuity in the private broadcasting sector in partnership with the public broadcaster to make (a system based on Canadian programming) profitable over time," O’Farrell said. Until that time, the CAB has recommended that the CRTC implement carriage requirements on distributors in both the analog and digital environment, and that it create a policy framework ensuring broadcasters new revenue sources in a digital environment. It also wants existing policies, such as simultaneous substitution rules, extended to the digital market. Although the CAB believes that no changes are needed to the Broadcasting Act, its recommendations fall within five broad policy initiatives that were laid out in its written submission to the committee (CCR, March 1/02). Other recommendations include a request that the CRTC consider creating a priority programming special credit for non-news local programming to recognize capital expenditures on the transition to digital as tangible benefit initiatives in the transfer of ownership applications, and to include interactive programming expenditures as part of minimum Canadian content expenditure limits. The CAB also wants help from Canadian Heritage and Industry Canada. It wants the Industry minister to ensure the development of industry standards in the move to digital, and Canadian Heritage to review the overall copyright burden and to streamline the administration of tariffs and royalties. The association is also calling on the two departments to establish a joint working group on the future of television programming financing in Canada, and is pushing for the government to commit to long-term stable funding of the Canadian Television Fund (CTF) at current levels. During its March 21 appearance before the committee, the CAB reiterated a number of initiatives aimed at saving or making money. For example, it again called for an end to overpayment of CRTC part II licence fees (CCR, Nov. 9/01), the removal of advertising restrictions on direct-to-consumer drug advertising that would bring an estimated additional $240 million into the system (CCR, Jan. 31/02), and granting conventional broadcasters the right to access subscription revenue. O’Farrell told the committee that, if adopted, these measures would lead to more money being available to produce Canadian programming. But when committee member Wendy Lill asked if the CAB would support monies such as the overpayment from part II fees and drug advertising dollars going directly to the CTF, O’Farrell balked. "The CTF has limitations on funds for program types, and producers not broadcasters can tap into that," O’Farrell said. He added that broadcasters should be free to decide on their own how to spend that money on Canadian programming. Fee for carriage a non-starter for CCTA Some groups view the CAB recommendations as simply an attempt by private broadcasters to grab a bigger slice of the broadcast pie. "They’ve asked several times to get a fee for carriage (for conventional networks)," notes Janet Yale, president and CEO of the Canadian Cable Television Association (CCTA). "Every few years they make the same request, and they may dress it up under another name, but at the end of the day it’s just a grab for more money out of cable subscriptions when they already have the most privileged status of any of the players that we carry. We have a tradition in Canada that the (conventional) broadcasters have priority access in their market, which gives them a privileged place on the dial, and that’s the special treatment that they get that protects their revenue streams...That’s really it – you don’t get both. Even in the U.S., you can get fee for carriage or a must-carry priority access, but not both." Yale adds that a look at the financials of private broadcasters shows that there is "no pressing need" to give conventional broadcasters access to subscription revenue. "I don’t see any evidence of a crisis," she says. Adds Tim Woods, spokesperson for the pro-CBC group Friends of Canadian Broadcasting: "From right across the political spectrum, committee members were looking for the delivery of Canadian content, especially during prime time. They were curious or suspicious about the claims that the broadcasters were making. There’s clearly a lot of work that the (private) broadcasters are going to need to do to convince Parliament that they are in such dire circumstances."

CAB seeks slew of supports in “transition” to for-profit Canadian programming

Broadcast | March 28, 2002

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