Shaw, Rogers, Corus oppose CTV proposal for common Cancon spending requirement

Broadcasting players and industry groups are quarrelling over a CTVglobemedia Inc. proposal to apply common Canadian content spending obligations to all large broadcasters under the CRTC's new licensing policy for television groups. “Rogers strongly disagrees with this position,” Rogers Communications Inc. wrote in a submission to the CRTC. “Rogers submits that a case-by-case determination of each group's CPE obligation is the only fair and equitable way to proceed.” The CRTC is now conducting a proceeding on licence applications from the large, English-language Canadian broadcasting groups—CTV, Rogers, Shaw Media Inc. and Corus Entertainment Inc.—to renew their television service licences under the commission's new, group-based licensing framework. One of the policy's goals is to afford broadcasters more flexibility in their expenditure obligations for Canadian content and programs of national interest. Programs of national interest, as defined by the CRTC, include scripted drama, documentaries and Canadian awards shows. The commission said in its notice of consultation that it takes the view that each broadcasting group should contribute a minimum of 30 per cent of their aggregate revenues to Canadian content and five per cent to programs of national interest, but the numbers, ultimately, are negotiable. There remains disagreement between companies and industry groups over what the precise numbers should be—and a sharp point of contention has arisen between the four large broadcasters over a proposal by CTV. In a brief submitted to the commission as part of its licence application, CTV called for the same obligations for all four major broadcasters. “One of the other important elements of the commission's revised policy framework is that group-based obligations ... are to be applied consistently to CTVgm, Canwest Global (now Shaw Media) and Rogers,” CTV wrote. “In general, group-based obligations, such as overall Canadian programming expenditures or expenditures relating to PNIs , should be the same for all groups. If one group is subject to lower requirements, then all groups should be able to take advantage of the same flexibility.” But Rogers, Shaw and Corus oppose the proposal. Rogers declined to comment for this story, but wrote in its CRTC submission that CTV's proposal is inconsistent with commission policy and does not take into account the historical expenditure levels that different broadcasting companies spend in their own situations. “Groups such as CTV and Shaw with a relatively large number of strong Category A services can ... more easily achieve an overall group CPE of 30% with relatively low levels of spending on Canadian programs by their conventional television services,” Rogers wrote. Rogers said it should not be required to meet the same obligations as CTV because it has more over-the-air stations than specialty channels, which traditionally pump more dollars into Canadian content than conventional TV. In its licence renewal application, Rogers requested a 25 per cent Canadian content spending requirement. Shaw also opposes CTV's proposal, arguing that if the commission intended to apply one expenditure standard for all broadcasters, it would have made the policy clear instead of referring to broadcasters' “historical spend.” Shaw requested a Canadian content spending requirement of 29 per cent. Corus, although it was not mentioned in CTV's proposal, also takes issue with a common obligation policy. The broadcaster said adopting a “one size fits all” approach to expenditures would give CTV a significant competitive advantage. Corus argued that CTV tends to spend more on Canadian content because of its extensive stable of specialty channels, and that the broadcaster wants to benefit from matching the lower requirements of a competitor. “In effect, CTVgm's relative CPE obligation would be reduced, while the relative CPE obligation for all other groups would be increased,” Corus wrote. Corus requested a 27.5 or 29 per cent Canadian spending requirement for its services. CTV declined to comment on its proposal, and Shaw and Corus could not be reached for comment. In a joint intervention to the commission, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Directors Guild of Canada and the Writers Guild of Canada (WGC), said they agree with CTV's proposal for a common obligation—except they say that all broadcasters should meet the highest level approved by the commission, not the lowest. The groups said all large broadcasting groups now benefit from the profits of vertical integration, and that they should be expected to increase their historical spending levels. The groups also told the commission they believe expenditure requirements for programs of national interest should be set closer to 10 per cent than five. Joanne Deer, ACTRA's director of communications and public policy, said by phone that setting a consistent spending level for all broadcasters creates a level playing field. “Part of our fear is that if you give one a lower CPE, the rest are going to argue that they want one too, and that's going to create a race to the bottom,” she said. Deer said a 30 per cent base level is reasonable and in line with how much broadcasters spend now, but that ACTRA would be open to a higher number. Deer said that lowering the levels would ultimately hurt the Canadian content production industry. “We don't want to go backwards,” she said. ACTRA has found that most broadcasters are spending more than five per cent on programs of national interest, she said, adding that the group is concerned that broadcasters will cut their spending to meet a new minimum threshold. Deer said programs of national interest are of vital importance for the industry and require special attention because they are the most expensive to produce. The Canadian Media Production Association (CMPA) also told the commission in a submission that the minimum level for Canadian content spending should be 30 per cent, but that number could be higher. The requirement for programs of national interest should be more than five per cent, the CMPA said. “The commission should resist efforts by the broadcaster groups to reduce any of their Canadian content exhibition levels,” the CMPA wrote. “In the event the commission chooses to adopt CTV's position that all broadcaster groups should be subject to the same group CPE, the CMPA submits that the bar should be set high for all; the lowest common denominator should not prevail.” The CMPA added that adopting too low a requirement, coupled with too much flexibility, could jeopardize the success of Canadian programming. Watchdog group the Friends of Canadian Broadcasting wrote in a submission that setting a new base requirement of 30 per cent for Canadian programming expenditures would result in a reduction of about $90 million a year in spending by the four broadcasting groups. The Friends added that adopting a five per cent base level for programs of national interest would lead to a spending reduction of $70 million per year. The group said it supports a minimum Cancon spending level of 32 per cent and 6.4 per cent for programs of national interest to maintain current spending levels. A public hearing on the licence applications is scheduled for April 4 in Gatineau. kfournier@thewirereport.ca

Shaw, Rogers, Corus oppose CTV proposal for common Cancon spending requirement

Broadcast | February 16, 2011

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us