|
Monday Apr.
7, 2008 BACK | NEXT
Crtc on the move
by Angelo
Persichilli
THE HILL
TIMES
Not many people talk about it,
but the Canadian Radio-television and Telecommunications Commission
(CRTC) is on the move. And when CRTC is on the move, we, the
consumers, have to be prepared to watch not new programs, but our
wallets.
For this reason in the last couple of weeks I went
through many press releases, applications, clarifications,
complaints, and answers from many of the players in this important
sector. It was not pleasant reading. With all of their acronyms it
looks like they talk another language. They talk about PBIT, OTA, DT
(not to be confused with DTH providers), BDU, EDIBTA, and don't
forget "Bell submission at para. 15 and 16." I've also learned that
the Sex TV channel is "Category 2."
After translating all
their coded releases, with some professional help, of course, I
learned what I suspected all along: Canadian broadcasters want more
money from you and me.
You say, "What's new?" You are right,
but this time there is something new. In the past, they were at
least trying to camouflage their request, putting forward the public
interest.
Basically they were saying, "You pay 50 cents more
but you get one more channel." This time it's different. They want
more money because their investors don't make enough profit. I
repeat: they are not losing money; they are not making enough money.
I'll be more specific. I'm talking about the request from
CTVglobemedia and Canwest Media Inc. to have money from cable
companies for carrying their OTA (over-the-air) channels, CTV and
Global TV). The reason? In one of their submissions, CTV and Canwest
presented "compelling evidence of the decline in profitability of
the private conventional sector. As we demonstrated, audience
fragmentation, declining advertising revenues and rising expenses
are taking their toll on the bottom lines of OTA broadcasters,
despite the economic boom of the last several years."
That's
right. It's about the bottom line. But wait, there's more. They
complain because specialty services have prospered more than the
conventional channels. Their solution? The cable companies should
give money to the broadcasters' OTA channels just as they give money
to the specialty channels.
Three observations: First, the
owners of the specialty channels are most of the time also the
owners of the OTA channels. This means that they are upset because
they make more money with one of their channels than another. A
solution is to remove the fee (from consumers) that cable companies
give to specialty channels, which was imposed by the CRTC to help
the new channels compete with OTA channels. If CTV and Global
believe that the help is not needed any longer, why not eliminate
that fee and reduce the cost to consumers?
Second, CTV and
Global are telling the CRTC that, because fewer viewers are watching
the OTA channels, let's make them pay more to compensate investors.
Does it make sense? Why not invest more and improve their programs,
instead of parroting American networks?
Third, don't be
fooled by the fact that they are asking for money from the cable
companies and not from consumers. If the fee is forced onto the
cable companies by new regulations, they will automatically download
them onto consumers. Perhaps the broadcasters believe that cable
companies make too much money and they want part of the profit. If
that's the case, I've another suggestion: If CTV and Global believe
that cable operators make too much money, why shouldn't that surplus
go to the cable investors or back to consumers?
The Canadian
broadcasting system is important for the cultural, social, and
economic development of our country, and, for that reason, we need
clear policies. I don't like the one adopted by the United States,
where everything is governed by the private sector and consumer
demand. Nor do I like the socialist idea of the government
controlling everything.
And I don't like what's going on in
Canada with private broadcasters invoking the freedom of American
broadcasters, but asking the government to pickpocket consumers.
In a March 4 release, the CRTC gives statistical and
financial summaries for private conventional television, "which
provides information on the sector's revenues, expenditures and
profitability from 2003 to 2007." First of all, the CRTC says that
"although revenues and expenses were stable from 2006 to 2007,
private conventional television stations improved on their profits
before interest and taxes (PBIT, do you remember that?).
So,
how did they manage to make more money? They reduced their manpower
(from 8,197 employees in 2006 to 7,873 in 2007), offsetting the cost
of salary increases. Also, says the CRTC, from 2006 to 2007,
"Canadian programming expenditures decreased by 1.2 per cent, going
from $623.7-million to $616-million. Of this amount, $143.5-million
was paid to independent producers to acquire Canadian programming."
Private broadcasters "also spent $721.9-million on foreign
programming, which represented an increase of 4.9 per cent over the
$688.3-million spent in 2006."
Now they're asking for more
money. Okay, we'll make their investors happier, but what about the
programs? Will they improve? If viewers were not interested in their
programs last year, what makes them believe that they will be back
next year?
Some are saying that they need the money because
they have to convert the equipment to digital. Isn't it the other
way around? Don't you go to the shareholders first to invest money
and, once you improve the product with their money, go to the
consumers?
I have another concern. Once they have a
beautiful, new digital highway, what are they going to give Canadian
viewers? More American programs? If that's the case I believe that
CRTC should open completely the gate to the U.S. broadcasters and
eliminate the Canadian intermediaries, who seem to be there only to
pocket a cut from American productions that Canadians watch.
In fact, this week, the CRTC will also hear a debate over
the controversial "genre protection" rule introduced in the early
'80s, giving Canadian specialty channels exclusivity over similar
American channels (like HBO and ESPN), to prevent competition.
The CRTC has already said that it wants the TV industry
guided by market forces. It's a good idea, meaning that the growth
of the industry is guided by the quality of its programs. That's why
I believe that allowing Global and CTV to get more money from
viewers for unpopular programs is a slap in the face to consumers
and to the policies of the CRTC.
Broadcasting is not
different from other businesses. Good products, or programs, bring
more consumers, or viewers, and more viewers bring more money.
Unfortunately, some Canadian broadcasters seem to have the Napoleon
syndrome. The French general used to say, "Give me medals and I'll
win all the battles you want." He got the medals but died defeated
and alone on St. Helen's Island.
|
