Industry groups oppose drop in Cancon exhibition requirement

Decreasing Canadian content exhibition requirements by a mere five per cent will have a negative long-term impact on the broadcasting industry, Stornoway Communications president and CEO Martha Fusca says. “It's a lot more significant than people realize ... This is really only the first step. We've been reducing it incrementally and slowly over the years. You're at 55 per cent, in several years from now what's to preclude us from saying 50 per cent is okay, and then 25 per cent?” Fusca said in an interview. “Something seemingly small actually has a very dramatic ripple effect. Eventually it will if we do not develop a very strong economic strategy in Canada that at the core has Canadian content in it.” In March, the CRTC released a group-based licensing policy that supported reducing broadcasters' exhibition requirement from 60 to 55 per cent, while maintaining an evening requirement. “With respect to conventional television, the Commission recognizes the importance of providing maximum regulatory flexibility while ensuring the availability of Canadian programming during times when most Canadians are watching television,” the commission wrote. “Accordingly … it would be appropriate … that a licensee is required to devote not less than 55% of the broadcast year while maintaining the current requirement of devoting not less than 50% of the evening broadcast period (6:00 p.m. to midnight) to the broadcast of Canadian programs.” On Dec. 3, the CRTC sought to formalize its proposal by opening a call for comments on an amendment to its Television Broadcasting Regulations set out in 1987. The amended regulations will come into force on Sept. 1, which coincides with the new licence terms for Canada’s largest broadcasters. The commission also ruled that large broadcasting groups must contribute 30 per cent of their gross revenues to Canadian programming expenditures. Fusca said that by dropping its exhibition requirement by five per cent, the commission is attempting to help conventional broadcasters overcome difficult financial situations. “Obviously it's very useful to have fewer commitments that you have to live with,” she said. “ is expensive, and there isn't enough of it to acquire so you have to commission it, which is very expensive.” But Fusca said that although it may bring relief to the over-the-air industry, the reduction is a move in the wrong direction. “I don't believe that we should reduce it because there's so little Canadian content on the airwaves as it is. If you eliminate the CBC and the provincial government broadcasters, and some of the discretionary digital Category 1 channels ... then we have virtually no Canadian content, particularly ... drama,” she said. “We're not enabling consumers to access Canadian choices, because we're simply not producing it.” Fusca said the broadcasting sector would benefit more from developing a policy to support the export of Canadian content abroad than by reducing the exhibition requirement. In its comment filed with the CRTC on the amendment, the Communications, Energy and Paperworkers Union of Canada (CEP) also said the five per cent reduction would have a large impact on Canadian content. The union estimated the decrease will result in 31,777 fewer hours of Canadian programming per year. The CEP said the commission’s proposed amendment lacks important details, including the reasoning behind the decision to reduce the requirement. “The CRTC has not provided evidence justifying this reduction, has not reconsidered its proposal in light of the impact of substantial changes in ownership and resources between 2009 and early 2010, has not explained how reducing Canadian content levels will strengthen Canada’s broadcasting system, and has not set out the conditions under which it will either return to the 60 per cent (or preferably, higher) level in the future,” the CEP wrote. The CEP said the CRTC’s decision to lower the requirement was made at a time when Canwest and CTVglobemedia Inc. showed negative operating incomes, but argued that the reduction is no longer justified now that Canwest has been purchased by Shaw Communications Inc. and BCE Inc. is in the process of acquiring CTV. “CEP therefore questions the CRTC’s proposed amendment, on the grounds that it is not within the CRTC’s jurisdiction to reduce private TV stations’ Canadian content presentation levels without regard to the total resources available to them,” the CEP wrote. The Canadian Association of Community Television Users and Stations (CACTUS) also filed a comment with the commission, saying the reduction in exhibition requirements isn’t justified by the broadcasting sector’s current economic climate. “Most of Canada’s largest private networks are now owned by BDUs , whose business model has thrived through two large market adjustments in this decade,” the group wrote. “With the additional financial power and leverage that these players can wield (including leveraging new media platforms to support their broadcasting undertakings), why should they be expected to contribute less to Canadian content? Surely, if any change is to be made, they should contribute more.” CTV declined to comment on the amendment. In November, Bell told the House heritage committee that although it may soon acquire CTV, the broadcaster must still “stand on its own.” In June, CTV told the CRTC its A Channel stations had lost $98 million since 2007. Shaw is the only broadcaster that wrote the commission in approval of the reduced requirement. “We applaud the policy change,” Shaw wrote. Shaw was not available for comment Tuesday. Rogers Communications Inc. spokeswoman Jan Innes said by email the company supports the amendment, and considers it was agreed upon when the CRTC announced its March policy. The Quebec ministry of culture, communications and the feminine condition also wrote to the commission on the amendment, saying it is concerned the lowered requirement may have a negative impact on the French-language broadcasting system. “The believes a reduction in Canadian content requirements poses the risk of encouraging certain conventional television stations or ownership groups to offer more foreign content, in particular from the United States, especially if its acquisition price is relatively low,” the ministry wrote. “In no way will this reduction incite them to augment their use of local artists and artisans.” The ministry said it recommends maintaining the original requirement for French-language stations. The CRTC is currently reviewing the comments it received on the amendment and will announce its decision in the months to come. kfournier@thewirereport.ca

Industry groups oppose drop in Cancon exhibition requirement

Broadcast | January 11, 2011

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