CHUM’s request for split feed advertising runs counter to CRTC policy: Rogers

Rogers Broadcasting Limited is opposing a request by CHUM Limited for a split advertising feed for its NewRO conventional television station in Pembroke and retransmitter in Ottawa on the grounds that it would represent a change in CRTC policy. Rogers argues that such a shift should only be contemplated as part of a broader public consultation process. "The commission has a general principle of local advertising for local programming, and that’s been upheld in many incidents and we don’t feel (CHUM’s situation) warrants an exception to the rule," Alain Strati, director of regulatory affairs at Rogers Broadcasting, tells CCR. "Our only concern is that this is characterized as an exception to the rule, and we don’t think it is." CHUM’s split advertising feed request is contained in its licence renewal application for the NewRO, or CHRO-TV, filed Nov. 27, 2001 and gazetted March 1 – Notice of Public Hearing 2002-2. CHUM is seeking a separate and distinct licence for CHRO-TV Ottawa from CHRO-TV Pembroke for the "sole purpose of permitting each transmitter to originate and telecast separate commercial messages during such periods of time when the respective television stations originate ‘local’ programming". The broadcaster notes that the programming and other commitments for the station in Ottawa and Pembroke would remain identical to those currently in place. In an April 11 intervention to the CRTC opposing the request, Rogers notes the CRTC’s long-standing policy of requiring a TV station to provide local programming in order for that station to access local advertising – a policy re-affirmed in the commission’s 1999 Canadian television policy. But CHUM has not offered to produce specific and separate local programming for Pembroke, so it "should not be afforded the opportunity to separately access advertisers in that market," Rogers writes. While Rogers would stand to benefit from a change in policy, as it has retransmitters in London and Ottawa for its Toronto-based over-the-air ethnic station CFMT-TV, Strati denies any opportunism on the part of Rogers. "We’re not necessarily looking at it in terms of any possibilities for Rogers; for example, if CHUM were approved that we would look at doing the same thing," Strati says. He adds: "If the rule itself were to be changed, then I’m saying it should be open to any broadcaster to look at different local advertising initiatives. At this juncture, I don’t think it’s appropriate to deal with in isolation." Toronto-based CHUM estimates a split advertising feed for CHRO would increase current advertising revenue at the stations by about 10 per cent, or $803,010. The broadcaster proposes carrying different advertising in the Ottawa and Pembroke area markets during its news shows. CHUM says the split feed would allow Pembroke-area merchants to advertise their services and products locally at more affordable prices since the Ottawa market would be excluded. It notes that under its current policy, it has allocated at least 30 spots a week during prime time news for Pembroke and Ottawa Valley advertisers at a significant discount relative to CHRO’s rate card. "This is effectively a cross-subsidy, and given the limited amount of inventory within news programming, this policy has had a negative financial implication for CHRO. Also, the demand in Pembroke for ‘discount’ advertising, exceeds the allocated supply," CHUM notes in its licence application. It adds that a growing demand within Ottawa could displace some Pembroke local advertisers who do not wish to pay for greater reach into Ottawa. But Rogers counters that Pembroke advertisers continue to have access to local radio stations and community newspapers for commercials. "Seen this way, Pembroke advertisers are no different from advertisers in other communities across the country. They have access to different types of media, at different price points, to serve their advertising needs," Rogers states in its intervention. Split feed needed to alleviate shortfall in revenue But CHUM sees the split feed as the answer to getting more advertising inventory on-air and helping alleviate a shortfall in revenue. It notes in its application that CHRO is still well below the multi-year financial projections submitted by CHUM at the time it acquired ownership of the station in 1997 from Baton Broadcasting in an asset swap. CHUM states that it had lost $21.648 million in the almost four years since taking over the station three months into 1997 and the end of the 2000-01 broadcast year. At the time of acquisition, CHUM projected revenues of about $10.043 million in year four, but the station brought in only $7.125 million in 2000-01. CHUM states the operation of fully staffed administrative offices, sales staff, news reporters, and technical/production facilities in both Pembroke and Ottawa makes the operation expensive. It also notes that it has implemented a full schedule of independent programming and has moved CHRO from temporary facilities in a suburb of Ottawa to a state-of-the-art television facility in Ottawa’s Byward Market. Furthermore, CHUM contends that the split feed would have no effect on other broadcasters since Global Television’s regional stations are not authorized to sell "local" advertising in Pembroke, and the CBC and CTV stations in Ottawa are operated by national networks that sell most of their advertising nationally or regionally. The split feed proposal will be considered at a public hearing beginning May 6 in Gatineau QC encompassing the licence renewal of all of CHUM’s conventional television stations.

CHUM’s request for split feed advertising runs counter to CRTC policy: Rogers

Broadcast | April 25, 2002

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