Channel Zero gambles on local news and popular movies to pull CHCH-TV out of the red

A month after Channel Zero took ownership of CHCH-TV in Hamilton, the company says it’s on track to reduce losses at the 55-year-old money-losing station by maximizing local news, shedding U.S. shows, shoring up advertiser confidence and winning back audience loyalty. “What we saw was that the local news programming was—if not break even— very close to being break even ,” said Cal Millar, president and COO of Channel Zero, which owns Movieola and Silver Screen Classics. Last month, CHCH-TV took some bold steps to shake up its format, including swapping its roster of U.S. entertainment gossip shows for a package of constantly updated local news during the day and popular movies in the evening. Millar says CHCH-TV’s audience, in Hamilton, Halton, Mississauga and west Toronto, is responding well to the changes. While he can’t comment on how much this has translated into advertising dollars, he says it’s not looking bad and “we are experiencing relatively robust advertising” as a result of a positive response from advertisers. “All of a sudden we are not selling them a network price advertisement. We are selling them a locally based advertisement because we do not have to carry the cost of that foreign programming,” says Millar, who has compared the new CHCH-TV to American superstations such as TBS and KTLA which focus on local programming during the day and national news in the evening, along with movies and sports. The Toronto-based specialty channel’s foray into conventional television signaled some significant changes to how CHCH’s former owner—Canwest Global Communications—managed the station. “When you look at the quality of professionalism, and the local programming, that part works perfectly well. What doesn’t seem to be working was the acquired programming on a cost basis and returns,” he says. Although projections on cutting losses are right on track, he says the future is a mixed bag of good news and challenges. “We project that we will lose money this year—and we will—but we also projected that we will get sustainability towards the end of the year and we are on track to that. Our focus right now is to get the station that was purportedly losing $30 million a year, to a sustainable level,” he says. How well CHCH-TV’s new format resonates with audiences will be known in January when the next Bureau of Broadcast Measurement survey results are released. In February, Hamilton’s CHCH-TV, together with four other stations in Kelowna, Victoria, Montreal and Red Deer, became poster symbols of the financial woes facing Canada’s television industry, after owner Canwest announced that it could no longer sustain losses at the stations. The media giant, at the time facing borrowing restrictions from its bankers because of defaults on loan payments, said it would sell the stations or shut them down if it couldn’t find buyers. In July, Channel Zero offered to buy CHCH-TV, together with CJNT-TV, one of the money-losing Canwest stations in Montreal for an undisclosed sum. The CRTC approved the deal in late August. Channel Zero has retained CHCH-TV’s 140 staff and recently hired another 15, including some former employees laid off during Canwest’s downsizing. Because the city of Hamilton’s population is less than a million, CHCH-TV is eligible to receive money from the Local Programming Improvement Fund, which began operating in September. Millar says LPIF money is crucial to plans to keep CHCH-TV in operation in the long-run.

Channel Zero gambles on local news and popular movies to pull CHCH-TV out of the red

Broadcast | October 20, 2009

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