Big Issues, Small Explanations

Melissa’s report is a very superficial review of of both sides of the current controversy. It “looks” credible, as do a lot of the CBC news reports, but is woefully insufficient in helping people arrive at an informed opinion.
You need to sit through a couple of hours of the CRTC hearings to really begin to grasp the issues.

Some things to consider:
– Over-The-Air broadcast channels are seeing ad revenues diminish, due to the many diverse outlets that advertisers must choose from to get their message out.
Cablevision was originally a way to pay for receiving a clear signal of U.S. channels. Pay TV was originally just an option to buy movies from Super Channel.
Over time, cable became largely Specialty Channels – which carry advertising. So we now have a huge number of cable channels that carry ads AND get paid a subscription fee as well. Most are profitable because of these TWO REVENUE STREAMS. Over-The-Air broadcasters are dependent almost entirely on ad revenue alone, which is becoming less every year.
(all broadcasters also benefit to some extent from foreign sales of their original, in-house productions)

– when businesses start to see lower revenues they naturally look at which programs are cost-effective and which are not. So while Wheel of Fortune turns a profit, local newscasts do not (especially those of the CBC!), so which would make sense to remove from the schedule? Yeah – local TV.

– the CRTC is free to insist that broadcasters include local programs, which has always been the case, because once upon a time getting a radio or TV license was considered “a license to print money”. City TV was probably the last such enterprise to get licensed while that was still the case, but circumstances have changed, hence the term “broken business model”.

– so, the proliferation of multiple Specialty channels which have 2 revenue streams are bleeding dry the conventional broadcasters which only have 1 revenue stream.

– the government (CRTC) cannot mandate that a business (CTV, Global, CBC) must live up to its original license agreements and continue broadcasting if that business is losing money.

– Rogers and Shaw are not thrilled to be put in the position of sharing their substantial, and virtually guaranteed profits, with anyone. Their modus operandi has always been to let the customer pay for the whole thing. The public paid for the cable network as it was being built as well as providing a profit for those who built it.

– anyone remember iCraveTV? They took “free” OTA signals and sold them over the internet. Broadcasters said “hey, that’s our work you’re selling!” and sued. No more iCraveTV.

What the CBC and Hubert are asking for is perfectly legitimate.
It’s easy to be distracted by the clownish bravado of Stursberg, and so forget that the people who comprise the Executive team of the CBC are stewards of a public utility, OUR utility, and are in fact acting as sensibly and responsibly as possible on OUR behalf. The fact is, we’d be unfair to apply cynicism to everything they do.
Here, they have a legitimate case.
The growth of the cable industry, and the channels they provide, is killing standard, traditional broadcasters, while using the product from those broadcasters for free.
It’s not the internet, and it’s not the economy.
It’s an existing arrangement that was put in place forty years ago when regulators could not have envisioned what was to come.

The CBC has no clout when going to Phil Lind and asking for a share of his profits, so they’re asking the CRTC, the referee, to make a call in the interest of fair play.
And for the sake of the survival of programs that cannot compete based on ad revenue alone. Specifically, local programs and the local stations that produce them.

Go Hubert!

11 comments:

  1. Signal Operator
    Posted December 1, 2009 at 1:12 pm | # | Reply to this masterpiece

    I see this morning that the CRTC is soliciting public comment on the proceedings:
    http://crtc.gc.ca/eng/archive/2009/2009-732.htm . One sentence that jumped off the page: “The Commission recognizes that in the digital environment, consumers expect greater flexibility in being able to choose services to which they wish to subscribe, while distributors are under pressure to offer the most attractive and competitive basic service possible. ” Yes, consumers DO expect greater flexibility…such as the right to choose the channels to which they wish to view, and to NOT subsidize the vast, barren wasteland of specialty channels polluting my television. Vision, APTN, and yes, the main network of the CBC among others…none worth my pennies.

    I know that isn’t the topic under discussion at the hearings, but isn’t consumer choice at the root of the issue? Local programming will survive, or not, on it’s own merits.

  2. 1weasel
    Posted November 29, 2009 at 1:55 pm | # | Reply to this masterpiece

    One thing to recall is that the specialty channels were licensed with advertising restrictions place upon them. To balance that subscriber fees were mandated by the CRTC. All this was done to appease the conventional broadcasters. Those limitations forced the specialty channels to innovate with interstitials and other ways of filling the time gaps. YTV, for example, made especially good use of this opportunity to actually produce scrpted material, fill gap time and establish its brand. Meanwhile, conventional private television bled viewers and grew increasingly reliant on searching out simucast opportunies.

    In the meantime the telcos and cable saw the limitations of analog and began the costly conversion to digital. The bonus was that they were in fairly good shape when the internet and the digital revolution began to take off. Conventional television owners, for the most part, chose not to spend on upgrading their facilities and went on debt-funded buying sprees.

    I do not see a particularly compelling reason for the CBC to be including itself in this OTA group since it already has two revenue streams, in addition to being able to develop and buy content from subsidized producers (CTF, Telefund, etc.).

  3. Jerrold Maclean-Hunter
    Posted November 23, 2009 at 5:12 pm | # | Reply to this masterpiece

    Cable’s offering has become gradually shittier seems to be the consensus of all who I talk to.

    Let those greedy fucking bastards go bankrupt, I say. I’ll go to digital rabbit ears, torrents and online video and keep that $50+ a month for DVD purchases/rentals.

  4. cbc ottawa
    Posted November 23, 2009 at 7:46 am | # | Reply to this masterpiece

    Cable TV is NOT an necessity! No one will starve in the dark without it and very, very, few will choose to live without it if it goes up ten bucks a month! So let Rogers and Shaw call it a TAX if they want as long as local programming survives!

  5. cbc ottawa
    Posted November 23, 2009 at 7:38 am | # | Reply to this masterpiece

    Good piece!

  6. Jeff
    Posted November 23, 2009 at 7:01 am | # | Reply to this masterpiece

    Never mind all that. Did anyone see Evan collecting river rubbish in that wetsuit on sunday night? Who says CEEB don’t do hip compelling TV ? That bolt they found in the water is probably worth $0.80. Booyah! When do the Geminis start accepting nominations?

  7. Roger
    Posted November 22, 2009 at 11:35 pm | # | Reply to this masterpiece

    Good post, Allan.

    It’s important to remember that Stursberg commands a lot of people in the organization. So as clownish as he may seem, his direct marching orders are and have been playing out for the last number of years. Rarely have I seen such a shift to content aimed at bringing in maximum audiences, at the expense of just about everything – depth, quality, breadth, let alone entire demographics that deserve service from our only national public broadcaster.

    If there is no change in direction, one can only blame Hubert and the board of directors for not correcting this course.

  8. Ray
    Posted November 22, 2009 at 6:11 pm | # | Reply to this masterpiece

    Hey Allan,

    Completely off topic, but you seem to be in the know. Has CBC disclosed their list of Salaries yet? I’m really curious.

    • Allan
      Posted November 22, 2009 at 10:17 pm | # | Reply to this masterpiece

      Not as yet. Sun Media is aggressively pursuing every piece of information they can get …
      http://www.lfpress.com/news/canada/2009/11/13/11730406-sun.html
      You might also post your question at insidethecbc.ca

      All compensation figures, especially at the higher levels, are quite naturally believed to be kinda personal. And there are valid reasons too for keeping them confidential. (just imagine how fast Stursberg would be recruited by Villians Inc. if they learned his services could be purchased for such a meagre sum).
      But is there there anything that significant to be gained by putting these numbers out to the public?
      Frankly doubt that it means much of anything.

      And it’s fine to change subjects, Ray, bring up anything you like. Not expecting much comment about this topic. I think most people are staying out of it, letting the players work it out amongst themselves.
      At least until they see their cable bill.

    • Another Year Another Plan
      Posted November 23, 2009 at 4:12 pm | # | Reply to this masterpiece
  9. Anonymous
    Posted November 22, 2009 at 12:43 pm | # | Reply to this masterpiece

    Thank you. A bit of context and candor is sorely lacking from this debate. Unfortunately, the media illiterate that comprise some 80% of the population remain confused. This information is helpful.


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