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Speaking to Parliament's Heritage Committee on Monday, April 20, executives from Rogers Communications called the television industry a cyclical one that will be highly profitable once the economy rebounds. There is thus no need for fee-for-carriage.
Phil Lind, vice chairman of Rogers, points out that " 'fee-for-carriage would set up the worst of all public policy solutions, a two tier taxation system.' " He explains that " 'those who subscribe to cable or satellite would pay more, a lot more, while those who receive television via rabbit ears or a roof-top antenna, would pay no consumer tax, and continue to receive free over-the-air local television. Such a system would be patently unfair.' "
Quebecor Media, meanwhile, feels that a fee-for-carriage is needed because the over-the-air (OTA) television industry is dying. Karl Peladeau, company president and CEO, says that the industry has been hurt by fragmented audiences, new technology, and ad revenues that are divided up between more TV channels. The CRTC has been slow to react to these conditions, which OTA broadcasters can't control.
Canwest and Global are asking for a monthly fee of 50 cents per OTA signal distributed by cable and satellite, which Rogers said would translate to an increase in monthly cable bills of $6.50 in Toronto and Montreal.
Lind explains, " 'we are not asking consumers or other companies" shareholders to underwrite our problems. The economic situation will hopefully improve shortly. When it does, history tells us that over-the-air television will be back in the black.' "
Peladeau says that financial help is needed if TVA was going to be able to retain the 90% overall homegrown programming it airs. The average budget for domestic drama has already fallen to $600,000 per hour from $800,000, and it could soon drop to $400,000.
According to Peladeau, " 'TV is headed toward a dead end, particularly conventional TV. It could be the end of major dramatic series.' " He points out, " 'it costs too much and generates too little in ad revenue.' "
Group TVA president and CEO Pierre Dion added TVA " 'was doing pretty well, although it was feeling the effects of the tsunami of decreasing ad revenues.' "
Quebecor Media"s other solutions include deregulation, including of mandated wholesale rates, and the ability to acquire cross-platform rights from producers. Peladeau pointed out that lost ad revenue on the linear OTA station could be recouped on other platforms.
Rogers officials said one solution is the CRTC-mandated Local Programming Improvement Fund (LPIF), which would see $60 million in distributor contributions subsidizing local programming in small and medium-sized markets.
In addition, Rogers senior vice-president of regulatory Ken Englehart suggested the CRTC could make some Canadian content concessions to help the OTA stations, and that perhaps some local programming and drama could be shifted to specialty TV.
Sources: Cartt, 04/20/2009, Cartt, 04/21/2009
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