CBC says Bold channel rebrand facing $3-million hike in production costs

The CBC says Canadian programming costs for specialty services have been increasing annually by 7.1 per cent, and estimates that a rebrand of its Bold channel, which will require the production of more Canadian content, will cost an additional $3 million per year. The CRTC opened a consultation in November on a CBC application to amend the broadcasting licence for its Category 1 specialty channel Bold. The CBC has been looking for a new direction for the channel, but is searching to rebrand it in a way that does not directly compete with other Canadian specialty services. The public broadcaster had originally sought to rebrand Bold—whose licence is now defined as within the country genre—as a high-end drama and performing arts service. But in April of this year, the CRTC denied that request. The CBC then returned to the CRTC with an application to rebrand the service as one geared towards “rural Canadians”—defined as those who live outside of the large urban centres—with a focus on adults aged 25 to 54. In an Oct. 15 letter to the CRTC, the CBC said Bold’s existing budget of $2.3 million is not enough to create new rural programming. “e do not believe it is possible for bold to create and refresh a sufficient volume of new rural/regional programming within its current programming budget of $2.3 million in order to deliver a predominantly rural schedule,” the CBC said. The broadcaster said it will have to generate new Canadian programming to meet the requirements of the proposed licence, and estimates it would need a $3-million per year increase in production costs, which would increase over time, to create a “predominantly rural schedule.” “ver the last 5 years (2005-2009), Canadian production costs for the Category 1 specialty services increased at an average annual compound rate of 7.1 per cent,” the CBC said. “We believe that bold would be subject to the same dynamics.” The CBC declined to comment on the application Tuesday. But Ian Morrison, a spokesman for watchdog group the Friends of Canadian Broadcasting, pointed out in an interview that the 7.1 per cent figure may be derived from CRTC statistics showing that, between 2005 and 2009, Canadian content filler programming and program production costs increased 7.1 per cent for all digital specialty channels. That does not necessarily mean the production of Canadian content is becoming more expensive, Morrison said. He speculated that, between 2005 and 2009, the number of specialty services increased, which ramped up spending on Canadian content. “It could well be … that it’s not a factor of per hour service costs, but an increasing number of services being counted during the period,” he said. “You and I know that Category 1 digital services increased in quantity over that period.” The CBC told the CRTC that “to control production costs as much as possible,” the channel would focus on less-expensive, studio-based talk programming. The broadcaster said it has increased Bold’s subscription revenues from $3.3 million in 2007 to $4 million in 2009, a level that “has held for the 2010 broadcast year.” The CBC expects to maintain about a $4-million revenue base for the channel, it said. It added that in 2010 there was “very little advertising revenue on the channel,” generating about $100,000. But if the CRTC application is approved, the CBC said it expects to maintain Bold’s advertising revenue and over the next three years “hopefully grow it to $200,000.” Morrison said the channel’s expected $3-million jump in costs is significant. “That’s a huge increase,” he said. “They’re really hiking it up. Their total Canadian programming expenses in ’09 were only $1.26 million.” In a set of questions to the CBC, the CRTC said it had reviewed Bold’s fall prime time schedule, and many programs—such as The Tudors, Intelligence, Kenny & Spenny, From Abbey Road, The Pineapple Dance Studio, John from Cincinnati, In Treatment, and Psychoville—are not consistent with the channel’s new proposed licence definition. The CBC replied that such programming drives viewer interest in the channel and that “the vast majority of thematic specialty services have schedules offering a mix of programming.” The CBC intends to maximize Bold’s programming to reflect Canada’s rural and non-urban regions, the broadcaster said, adding: “it is a necessity that we include other programs on the channel that may not be as reflective, but nonetheless appeal to the living realities of rural/regional Canadians.” Marth Fusca, president and CEO of independent broadcasting company Stornoway Communications, said in an interview that producing Canadian content is expensive. Fusca said costs overall are increasing. “The cost of living is going up,” she said, adding that taxes in provinces like Ontario, where people pay the HST, add up. “I don’t have any difficulty that the CBC is running into increased programming costs. At the end of the day, producers have to earn a living.” But Fusca added the CBC is a “huge company” where costs are less of an issue than for small, independent companies. The CBC can manage the money and resources it has, she said. “The CBC building in Toronto has an enormous atrium, which is just an empty space. Somebody has to pay for that,” Fusca said. “It’s a large company with numerous properties, and they’ve got some very good people in the sales department.” The deadline for comments on the Bold proceeding is Dec. 22. Major Canadian specialty channel operators CTVglobemedia Inc. and Shaw Communications Inc. did not submit comments for the proceeding. A number of production companies, such as Moving Headshot Productions, Pyramid Productions Inc., and the 291 Film Company Inc., wrote in support of the licence change. sdoyle@thewirereport.ca

CBC says Bold channel rebrand facing $3-million hike in production costs

Broadcast | December 21, 2010

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