Bell, Channel Zero tell CRTC local TV needs help

GATINEAU — The first day of the CRTC’s hearing on local and community television painted a picture of traditional TV in flux, as operators of conventional stations said declining ad revenue is making local TV unsustainable, while Vice Media LLC said it’s moving into traditional TV in order to capture a wider range of advertisers. Channel Zero Inc., which recently restructured operations at its Hamilton local TV station and cut local news programming from 80 hours a week to 17.5, told the CRTC Monday that the commission should rebalance funding for local TV programming, and doing so should be an “urgent priority.” CEO Romen Podzyhun said that the CRTC should take action quickly. “Channel Zero’s recent experience at CHCH is a case in point,” he said. “Financial data show that revenues for local television are declining. The situation in small and medium-sized markets is especially concerning.” He said Channel Zero supports proposals by companies like BCE Inc. and Groupe V Media Inc. to establish a fund to support local news. Earlier this month, the CRTC also proposed a new fund to support local TV news programming, which would be funded by existing financial resources within the broadcasting system. Chris Fuoco, vice-president of sales and marketing for Channel Zero, said the elimination of the Local Programming Improvement Fund (LPIF), as well as the accelerating “erosion of margins” in the acquired programming CHCH airs, lead to the restructuring of news operations the company announced in December. “As an independent broadcaster, not part of a network group, limited in scale, especially when it comes to our ability to secure network television buys, that acceleration ultimately is what got us in the situation we found ourselves in,” he said. Fewer people are buying advertising on a regional basis and more are buying nationally, he added. “And because we are not part of a national network, we have found ourselves on fewer of those national buys. And that’s driven by a number of market forces that are at play,” he said. Channel Zero president Cal Millar said original, local journalism is important. “Professional news is expensive to do, and that’s not being created online,” he said. Millar pointed to an appearance by Vice earlier in the day, whose representatives explained that the company aims to have a global audience for its local stories. “There are local stories that our local community wants to hear about that just simply don’t have national or international relevance,” Channel Zero’s Millar said. Earlier in the day, Vice’s chief international growth officer David Purdy had said that the company’s view is that the content Vice produces in Canada is also relevant outside the country. At Vice, content made for Calgary or Toronto can be exported to the 30-plus other countries in which Vice operates, Purdy noted. “We’re always thinking about that when we’re telling a story. Is this a story that would make sense or be interesting around the globe?” CRTC Chairman Jean-Pierre Blais said at the beginning of the hearing that the commission was kicking off the eight-day proceeding with an appearance by Vice because it wants to learn from Vice’s model. Purdy said millennials, which make up Vice’s target audience, consume content on all platforms, including traditional TV. “Millennials do watch television on a traditional TV set, and there’s an opportunity for us to expand our reach by being there. However, they consume content across all platforms, and more than half our usage now occurs on a smartphone,” he said. “So when we produce content … we make sure the content we’re producing is going to make sense on a TV, a PC and most specifically on a smartphone.” The main reason Vice is moving into traditional TV is to reach advertisers it wouldn’t be able to otherwise, Purdy explained. Its traditional TV channel, Viceland, is set to premiere on Feb. 29 in Canada. “Certain advertisers hadn’t made that transition to digital, and … we were missing on a large part of the advertising community, who just weren’t as aware or in tune with Vice,” he said. By putting Vice on a traditional platform, “we feel that we’ll absolutely expand the number of people who are advertising on Vice, and also we’ll broaden the audience. So linear was really important to us.” He added: “it sounds a bit crass, but absolutely we did it for the money. We felt that with traditional advertisers, we weren’t getting our fair share of auto, of banks, of telcos. There’s a bunch of advertising categories that we think we can do more business with if we’re on a traditional TV platform as well.” Purdy said that Vice will differ in how it approaches questions like the amount of advertising and sponsorship on its channels. “We’re going to try to experiment with lower ad loads, different formats, not breaking up the content as much, because we believe our audience are used to binge-viewing and watching content not uninterrupted by ads, but a little more respectful of their time,” Purdy noted. During Bell’s appearance, company representatives repeated Bell’s proposal that the CRTC reduce community-TV funding from cable and IPTV service providers and redirect 0.8 per cent of all other contributions from cable or IPTV service providers to a proposed news fund and 0.2 per cent to the Small Market Local Programming Fund (SMLPF). Bell also said local TV is facing a serious problem. Robert Malcolmson, senior vice-president of regulatory affairs at Bell, told the CRTC panel Monday that proposal isn’t a “permanent fix to the structural decline of local television.” Bell Media president Mary Ann Turcke said local TV isn’t sustainable. “A couple of years ago, a handful of our stations were losing money. Now 25 out of 30 are,” she noted. She added: “it is unsustainable right now for even large players to redirect sums of money from other places… to fund what has fundamentally become unsustainable. And I would say in my early days here it feels like it’s accelerating. That’s what’s frightening to me.” Turcke said that the issue is advertisers, not ratings. “The advertisers are not valuing that audience the way they once were, for all kinds of reasons,” she said. “What you have is a situation in regions across this country where advertisers just aren’t there to buy the property… it’s just not as valuable to certain individuals as it once was.” CTV News president Wendy Freeman added: “our six o’clock newscast across the country has still really high ratings. In fact, in some markets the ratings have actually gone up. But what’s happened is that the advertisers have gone away. Because of cord-cutting or it’s because other people are going to the web.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

Bell, Channel Zero tell CRTC local TV needs help

Broadcast | January 26, 2016

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

Bell, Channel Zero tell CRTC local TV needs help

Broadcast | January 26, 2016

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

FREE TRIAL

SUBSCRIBE

Related Stories

NDP critic calls for Rogers to reverse price hikes or be blocked from federal contracts

Rogers, Cogeco, Quebecor challenge ILECs at CRTC hearings

Cogeco defends infrastructure upgrade amid TekSavvy dispute

Cogeco MVNO operations still a ways away

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us