CTVglobemedia president insists carriage fees would support local programming

The next few weeks could represent the broadcast industry’s best chance yet for convincing regulators and legislators that fee-for-carriage is the only salvation for Canada’s ailing broadcast industry. The president and CEO of CTVglobemedia, Ivan Fecan, even went so far yesterday as to assure CRTC commissioners that the tens of millions of dollars it would generate from carriage fees would go to local programming – despite concerns to the contrary. The much-awaited CRTC licence renewal hearings kicked off yesterday to a passionate plea from Fecan for the regulator to do everything in its power to save local programming, which he suggested should include both national and local characteristics in its definition. “We believe programming that maintains and enhances local and national identity is the true definition of priority programming,” he said. Without local roots, Fecan said it would be difficult to maintain successful programs—like Corner Gas, Degrassi, and the Junos. The licence renewal hearings are being held under what CRTC chair Konrad von Finckenstein described as “exceptional” circumstances because of the dire economic situation facing conventional broadcasters. The first phase of the hearing will tackle policy issues affecting the broadcast industry, while the second phase will deal with specific issues on individual licence renewal applications. Fecan, who was the first to testify, described local programming as the number one priority for conventional television, stressing that it is the “glue” that keeps conventional television together. The current global recession coupled with dwindling ad revenues has thrust conventional television in Canada into financial difficulties that have forced broadcasters to slash jobs and reduce local programming. CTVglobemedia plans to shut down two Ontario stations in Windsor and Wingham in August. Earlier in March, the broadcaster announced it would lay off 118 people in stations in four cities across Canada, in addition to cancelling morning and weekend shows in Victoria, London, Barrie, and Ottawa. Fecan also reminded the commission that conventional broadcasting is also worth saving because it is the main vehicle for distributing local programming. “In fact, conventional is still the best mass audience vehicle ever invented,” he said. “It is difficult to pinpoint exactly why conventional television still works this well in attracting audiences, serving local communities and nation building, the fact of the matter is, it does and therefore, is worth fighting for.” To save local programming and conventional television, Fecan said the broadcast system needs a “rethink,” in order to thwart steps that have undermined it. Pointing out a few examples, he said deregulation of cable rates, and distant signals need to be renegotiated. The proposed Local Programming Fund (LPIF) is a solution but Fecan suggested BDUs must up their contributions to the fund—from one per cent to three percent. With profit margins for BDUs hitting $10 billion for last year, according to the CRTC, Fecan said new revenue streams are needed for conventional broadcasting. “Look, I’m not saying we are against profit. What I am saying is that things are seriously out of balance when, for five years running, the system produces continuous growth for one sector and continuous decline for another, with an ever widening delta.” Fee-for-carriage, compelling satellite TV to carry local stations in their home markets, a reworked LPIF, and not allowing a spending ratio that would affect broadcasters’ purchasing of U.S. programming, are some of the steps to save conventional television, Fecan contended. The CRTC chair seized on Fecan’s request for a fee-for-carriage, by asking him what CTVglobemedia would do with remittances from BDUs. Fecan replied that the money would be ear-marked for local programming. In March, von Finckenstein told MPs on the Heritage Committee that he received a “resounding no” from CTVglobemedia and Canwest when he asked them whether they would direct fee-for-carriage towards local programming. Last week, Fecan told the committee that in discussions with the CRTC, CTVglobemedia indicated that cash from fee-for-carriage would be used for local programming, but the CRTC would not listen. MPs will have another chance to question von Finckenstein on the disparities in both statements when he appears before the committee for a second time on May 25. Yesterday, the CRTC released an analysis showing fee-for-carriage would generate a total of $352-million for conventional broadcasters. About $260-million of this money would be for private conventional broadcasters, while $92-million is for the CBC. Canwest will get $72 million, CTV, $56-million; and Rogers Broadcasting, $57-million. But Fecan said the analysis contains assumptions that CTVglobemedia might not accept and would need more time to study the report.

CTVglobemedia president insists carriage fees would support local programming

Broadcast | April 28, 2009

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