CBC says it’s ‘back to the drawing board’ following LPIF decision

CBC/Radio-Canada will re-evaluate whether its small-market, local stations can continue to cover regional sports and elections following a CRTC decision to phase out a $100 million fund for conventional TV stations, Steven Guiton, vice-president and chief regulatory officer at CBC, said in an interview. The CRTC said Wednesday it will phase out, over three years, the Local Programming Improvement Fund (LPIF) it implemented in 2008. The fund was intended to help small and medium-market TV stations cope with losses in advertising revenues during a global recession. The LPIF, which is funded through the CRTC’s collection of 1.5 per cent of broadcast distributors’ revenues, will be cut by one third effective Sept. 1, 2012, cut in half again a year later, and phased out completely in 2014, the commission said. In each of the two years for which data is available, CBC was the single largest recipient of funding from the LPIF. The public broadcaster collected more than $40 million from the funding during the 2010-2011 broadcast year to support 20 of its local stations across the country. In an interview with The Wire Report Thursday, Guiton said the public broadcaster will “go back to the drawing board” to determine how it will continue to support those 20 stations without the funding. “In terms of the bottom line, it’s too early to say what we’re going to do exactly, but we do know that the LPIF gave us the ability to put more journalists on the ground in these small areas to be able to cover a greater number of stories, more in-depth local programming, such as election coverage, sports activities in the region, et cetera,” he said. “We know that those things we now have to re-evaluate, to try to figure out can we continue to do them the same way if so how can we do them the same way. That’s the challenge for us right now.” In a follow-up email, Angus McKinnon, a CBC spokesman, said Guiton was referring to local coverage of federal, provincial and municipal elections. Guiton said CBC would consider new ways to deliver local content in small markets, such as expanding its Internet delivery capabilities. He pointed to the CRTC decision to phase out the LPIF, which said “the broadcast industry as a whole will need to evolve and innovate” to continue offering local programming “whether through the traditional types of programming offered by local stations or by other means.” “If you look at the decision, the commission seems to be, in effect, requiring us to look at other means of providing local broadcasting services in these markets, and that would include … both regulated and unregulated platforms,” Guiton said. He said “everything’s on the table” as the broadcaster attempts to compensate for the loss of funding. The Conservative government's 2012 budget Last Thursday's federal budget reduces CBC's budget by $27.8 million in 2012-2013, $69.6 million the next year, and $115 million annually by 2014-2015. The broadcaster said as a result of the reduction it plans to cut programs and eliminate more than 650 positions over three years. Guiton said CBC was prepared to see the LPIF reduced by one third this year to reflect the commission’s original decision to collect one per cent of distributors’ revenues to support the fund. In the year following the creation of the fund, the commission increased the revenue contribution to 1.5 per cent. “I think there was a lot of understanding that the extra 0.5 per cent was at risk and could go away starting Sept. 1, 2012,” he said. “But we did not anticipate that the fund would be eliminated, that’s for sure.” The CRTC had said in 2008 it would conduct a comprehensive review of the LPIF. The commission said in its decision this week that the phase out of the fund over two broadcast years "will provide conventional stations with sufficient time to adapt to the evolving broadcasting environment." Guiton challenged the CRTC's conclusion that local stations’ advertising revenues have rebounded since 2008, and said ad revenues took another hit this year after rebounding slightly during 2011. “This is the danger in looking at it on a year-to-year basis. It does bounce around,” Guiton said. “We know that when you look at the general trend over the past 10, 12 years, it’s been going down considerably, and conventional broadcasting, in any market, even in the large markets, is not doing well. But in the smaller markets it’s really a problem.” The CRTC decision said the current trend in advertising revenues is positive but that it "remains sensitive in particular to the issues facing small-market and independent stations and will continue to monitor their situation." nkyonka@thewirereport.ca

CBC says it’s ‘back to the drawing board’ following LPIF decision

Broadcast | July 19, 2012

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