Astral granted flexibility to shift Cancon spending across English, French TV services

Astral Media Inc. has been granted licensing flexibility to shift Cancon spending across all of its English and French television services. In a licensing renewal for the Astral broadcasting group issued Thursday, the CRTC said it would monitor Astral’s allocation of Canadian programming expenditures between French and English-language services over its licence term to measure any impacts the increased flexibility may have on Canadian broadcasting. During hearings last year, critics said giving Astral such a “bilingual designation” would allow the broadcaster to transfer mandatory Cancon spending from its English-language services to channels on the French side, where demand for French-language content pushes the company's spending above the requirements. “he Commission considers it appropriate to designate Astral as a group in recognition of its unique operating reality, namely the fact that its services must meet comparable requirements in both linguistic markets in Canada and that the revenues it derives from the two markets are almost equal,” the commission said in its licensing decision, adding that the new Astral licence is good for five years until Aug. 31, 2017. The CRTC said it also imposed Cancon exhibition requirements, or requirements to air Canadian programming, on each Astral channel, “enabling each service to contribute significantly and in its own way to the creation and presentation of Canadian programming that is appropriate to its nature of service.” Astral, which said March 16 that it has reached an agreement to be acquired by BCE Inc. for $3.38 billion, owns 22 specialty channels (of which 13 are French-language), 84 radio stations and more than 100 websites and digital media properties. Its specialty channels include The Movie Network/HBO Canada, Super Écran, Family, Disney Junior, Disney XD, Canal Vie, Canal D, Vrak.TV and Teletoon. Astral's group licence decision last week was part of a series of CRTC television broadcasting licence renewals for the large, French-language television broadcasting groups owned by Astral, Groupe TVA Inc. (a subsidiary of Quebecor Media Inc.), Canal Évasion Inc. and V Interactions Inc. (owned by Remstar Broadcasting Inc.) Jay Thomson, vice-president of broadcasting policy and regulatory affairs at the Canadian Media Production Association (CMPA), said most of the French-language broadcasters will have five-year licence terms, during which the additional flexibilities could impact the Canadian broadcasting system. “That’s five years away and that might be too late if there’s been a dramatic shift over time,” Thomson said in reaction to the CRTC decision during a panel discussion Friday at the New Developments in Communications Law and Policy national conference in Ottawa, hosted by the Law Society of Upper Canada and the Canadian Bar Association. “But at least it’s a recognition that the commission has to monitor this, and it has to make information available so the rest of us can monitor its impact,” he said. Thomson said the CRTC should monitor the impacts of the group-based licensing model on Astral’s channels and all broadcasting services subject to the process. He said indicators other than just expenditures should be looked at. “We have to assess where the revenues are going too,” he said. “Because while we support an expenditure obligation tied to revenues, that makes sense, you have to admit that it’s going to affect behaviour to some extent.” Thomson said broadcasters that operate traditional, regulated services as well as unregulated new media services “will be inclined to try to move their revenues, to the extent that they can, outside the regulated system and allocate them to the unregulated system.” During a CRTC hearing in December 2011, Astral requested a bilingual group designation, saying the increased flexibility would allow it to transfer Cancon spending requirements from English-language to French-language services. In its decision to renew Astral’s licence, the CRTC said the company must devote a minimum of 30 per cent of its gross annual revenues to the production of Canadian content, which includes a 16 per cent spending requirement for programs of national interest, covering dramas, comedies, long-form documentaries and Canadian awards shows. Astral’s required spending on programs of national interest is four per cent higher than what it proposed, the CRTC said. The CRTC said that, according to revenue forecasts for 2012, Astral’s Cancon spending requirements will mean “an injection of more than $150 million into the Canadian broadcasting system within the next year.” Large, English-language broadcasting groups took part in the CRTC's group-based licensing model last year, giving English broadcasters more flexibility to move around their Canadian content spending. In a separate decision Thursday, the commission said TVA must devote 80 per cent of its spending to Cancon, five per cent higher than what the company had proposed, translating into about $110 million annually. TVA owns nine specialty services under the titles LCN, Argent, Casa, Prise2, Yoopa (a children’s channel), Mlle (a women’s channel), TVA Sports and Sun News Network. The CRTC said last Wednesday that it approved Shaw Communications Inc.'s purchase of two TVA specialty channels, Mystery and The Cave. TVA also owns and operates six conventional television stations across Quebec, including CFTM-DT in Montreal and CFCM-DT in Quebec City. During the licensing hearings last year, TVA said devoting 75 per cent of its program spending to Canadian content “was more than enough to meet the expectations of viewers in the French-language market.” In a concession to the company, the commission gave Quebecor more flexibility by approving its request to remove a licence requirement for the types of Canadian programs TVA broadcasts. “With respect to priority programs, the Commission considers that the popularity of such programs on TVA will ensure that they will continue to be broadcast,” the CRTC said. “For this reason, the Commission does not consider it necessary to impose a condition of licence with respect to either the broadcast of priority programs or to PNI expenditures.” The CRTC said that, over the last three years, TVA has devoted an average of 89 per cent of its budget to Canadian programs and that it expects the broadcaster to continue airing long-form documentaries, dramas, music and variety programs in peak viewing periods “to the same extent as they have been broadcast during the current licensing term.” Of the 18 hours per week of local programming TVA’s stations must broadcast, some will be required to devote nine hours to Quebec regional content. Of the nine hours, 5.5 hours on TVA station CFCM-DT Quebec must be devoted to local news, the CRTC said. “We are convinced that TVA and Astral will continue to make significant investments in order to offer their viewers varied and high-quality Canadian programming. For that reason, we have decided to give them more regulatory flexibility,” Tom Pentefountas, vice-chairman of broadcasting at the CRTC, said in a statement Thursday. In another decision issued Thursday, the commission renewed the licence of Canal Évasion for a five-year term from Sept. 1, 2012 to Aug. 31, 2017. The CRTC said it approved the broadcaster’s request to devote a maximum of 10 per cent of its broadcasting per month to “ball and stick” programming. The commission ordered Canal Évasion to spend a maximum of 45 per cent of its annual budget on the production or acquisition of Canadian programming. In a renewal for V Interactions’ licence, the commission said it approved the broadcaster’s request to air 30 additional minutes of local news programming on television stations CFJP-DT Montreal, CFAP-DT Quebec, CFRS-DT Saguenay, CFKS-DT Sherbrooke and CFKM-DT Trois-Rivières. The CRTC said it would maintain the current conditions of licence for V until its next licence renewal hearing in 2015. dgrenier@thewirereport.ca

Astral granted flexibility to shift Cancon spending across English, French TV services

Broadcast | April 30, 2012

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