News fund ‘distant second-best solution’ to local TV problem: Rogers

GATINEAU — Rogers Communications Inc. said on the fourth day of the CRTC’s hearing into local and community TV that it doesn’t think the creation of a fund for local news is the best way to address the problems facing local television, though if the CRTC does establish a fund, it should be half the size suggested by BCE Inc. Rogers suggested cable and IPTV distributors continue to contribute five per cent of their revenues to Canadian programming, 0.5 per cent of which would go into a local news and information fund. David Watt, senior vice-president of regulatory, told commissioners that proposal was “a distant second-best solution,” and that the company doesn’t think such a fund is “the appropriate way to go.” He said that was the company’s response to the CRTC’s proposal that it create such a fund earlier this month. In its written submission before the CRTC made that proposal, Rogers’ suggestions included allowing broadcasters that operate both local and community stations in one of the three largest markets to significantly reduce or close the community channel in that market and instead direct funding to over-the-air stations and channels outside that market. Watt said he agrees with Cogeco’s statement a day earlier that creating a news fund would be “robbing Peter to pay Paul.” CRTC Chairman Jean-Pierre Blais retorted that is “not an expression I particularly like, because in the end it’s only the subscriber that’s paying. Nobody’s entitled to any of this money.” Watt said having a news fund would be “a great deal of running to not move very far forward.” He said that under Bell’s suggestion of a $66 million fund that would be double the size of what Rogers suggested, Bell would pay about $14 million into the fund and take out $10 million and Rogers would pay about $16 million and get back $4 million. “Where I’m going here is that a $66 million fund looks like ‘gee, there’s going to be a lot more money here to devote to local news and information programming.’ But that’s not really true. It’s shuffling, to a large extent, money from the right pocket to the left pocket,” he said. Under such a system the “unambiguous winners, and they certainly are the most deserving, would be the independents,” while “the unambiguous losers” would be broadcast distributors without broadcast holdings, such as Cogeco Inc., Eastlink and Telus Corp. Watt said directing only 0.5 per cent toward such a fund, as Rogers is suggesting, would “put pressure” on community channels, while increasing that to one per cent, as under Bell’s proposal, would “absolutely gut” them. Blais asked Rogers whether the company agrees with statements made by others at the hearing that the root problem facing local TV isn’t falling audiences. “Others have suggested that local news continues to be very watched. That it’s desired by the viewership, but what we’re facing is the difficulty in monetizing that viewership through the behavior of advertisers,” Blais said. Rick Brace, president of Rogers’ media business unit, said that he agrees. “If we look at the viewership, particularly the local news aggregated, it actually eclipses local news. So it’s popular, it is relevant… it’s just that the money is not flowing,” Brace said. “And that’s not just a news issue, that’s an industry issue. Money is just leaving the broadcast industry, leaving the over-the-air market and specialty market, quite frankly.” He added: “that would be a better problem to have, quite frankly, because improved production quality, investment in what you’re doing, would hopefully correct that.” Blais asked Brace why Rogers, as a vertically integrated company, doesn’t invest money from more profitable arms of the business into local news. “What do you answer to folks that say, you’re Rogers, a billion-dollar company … frankly, you should just be able to cross-subsidize what might look like a loss on the TV news over-the-air business, but globally is a good place to be, in light of all your other assets?” he asked. “I know, Mr. Chair, you hear all the time that we operate businesses individually and that they have to make a profit and stand on their own, so I won’t go there,” Brace said, adding that the media division does cross subsidize. He noted that it was the Blue Jays baseball team’s successful year that “made our year” at Rogers’ media division this year. “And so, the cross subsidization, we’ll be there, but in a declining environment, you can cross-subsidize all you want, but it does become the law of diminishing returns, and at some point you have to address what isn’t working,” he said. Blais also asked Brace if the CRTC is “going to start potentially subsidizing activities, commercial activities that are at the heart of your licence, why shouldn’t we also be concerned about executive salaries and putting caps on those?” Brace said that if strings were to be attached that funding, they should be around issues measurable stats like hours of programming. Rogers also briefly addressed cuts it made at its OMNI stations last year, which led to a grilling at the House of Commons heritage committee in June, though the CRTC declined to hold a public hearing on the issue earlier this month. “Let me speak to the elephant in the room,” said Colette Watson, vice-president of TV and broadcast operations. “The issue with OMNI was content and format. And so we replaced the traditional newscasts in Ontario and Vancouver with current affairs programs that, using my expertise on the local level, I felt would enhance local engagement with those communities.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

News fund ‘distant second-best solution’ to local TV problem: Rogers

Broadcast | January 28, 2016

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News fund ‘distant second-best solution’ to local TV problem: Rogers

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