CRTC grants CHUM’s request for split-feed advertising in Pembroke, Ottawa

CHUM Ltd.’s conventional television stations in Pembroke and Ottawa will be able to increase much-needed advertising revenues with the CRTC’s approval to allow split-feed advertising – Broadcasting Decision 2002-328. The CRTC has issued a new licence for CHRO-TV-43 in Ottawa, and deleted it as a retransmitter of the Pembroke station, to allow the split-feed advertising. That’s good news for CHUM, which has fallen just under $3 million short of projected revenues in the Ottawa area market. CHUM will now be able to run advertising from Pembroke and Ottawa Valley businesses on the Pembroke station, and higher-priced advertising to Ottawa companies on CHRO-TV-43. CHUM estimates that split-feed advertising would increase current advertising revenue at the stations by about 10 per cent, or $803,010. Programming costs won’t increase either, as the schedules will remain identical on both channels. "The commission considers that approving this proposal will provide easier access to television advertising for businesses located in Pembroke and the Ottawa Valley," the CRTC states in its October 21 decision. "It also frees CHUM from its current practice of subsidizing the advertising rates paid for ads sold to Pembroke and Ottawa Valley area advertisers that could otherwise be sold to Ottawa-based advertisers at a higher rate. As a result, this proposal could provide CHUM with a modest increase in annual revenues, helping alleviate the annual financial losses experienced by CHRO-TV." Because issuing a separate licence for the Ottawa station has repercussions for broadcast distributors in the Ottawa-Gatineau area, which are now required to carry both signals, the CRTC notes that it will consider expeditiously applications to be exempt from carrying the Pembroke channel. The Ottawa station is considered a local TV station, and CHRO-TV Pembroke an extra-regional station, under the new arrangement. CHUM’s request for split-feed advertising was contained in its licence renewal application for CHRO-TV, branded the NewRO, which was filed Nov. 27, 2001 and gazetted March 1, 2002. In its application, CHUM stated that it had lost about $21.7 million in the almost four years it controlled the Pembroke station and its Ottawa retransmitter between 1997 and the end of the 2000-01 broadcast year. At the time of acquisition, CHUM had projected revenues of about $10 million in year four, but had only brought in $7.1 million in 2000-01. A condition of licence for both CHRO-TV Pembroke and the new licence for the Ottawa station is that the two channels may broadcast distinct advertising only during periods of locally produced programming, which will be identical on both the stations. CHUM’s request for split-feed advertising was opposed by Rogers Broadcasting Ltd. on the grounds that it would represent a change in CRTC policy (CCR, April 25/02). In comments to the CRTC, Rogers made note of the CRTC’s longstanding policy of requiring a TV station to provide specific and separate local programming before it could access local advertising. But the commission says it is satisfied that CHUM’s local programming plans, and its willingness to accept a condition of licence restricting the use of split-feed advertising to locally produced programming, is consistent with CRTC policy. The decision gives Toronto-based CHUM a break in the Ottawa area, as it gears up for tougher market conditions in Toronto, where new entrants will soon join incumbents vying for programming and advertising dollars. During its licence renewal hearing, CHUM executives warned that programming and staff cuts would be likely with increased competition in Toronto from Rogers (CCR, May23/02), which was granted a licence for a second over-the-air ethnic TV station, and from Craig Broadcast Systems Inc., which received a licence for a new conventional station (CCR, June 7/02).

CRTC grants CHUM’s request for split-feed advertising in Pembroke, Ottawa

Broadcast | November 7, 2002

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