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Over the next year, Canada’s broadcasting regulator will reshape the Canadian television industry, with a series of new rules flowing out of its lengthy Let’s Talk TV hearing last summer. It looks like the first changes to be announced will affect the country’s local television stations - and their shaky financial foundations.
Jean-Pierre Blais is set to make an announcement in London, Ontario on Thursday. Blais is chairman of the Canadian Radio-Television and Telecommunications Commission (CRTC).
Owners of local stations have long argued the economic model for this service is badly broken. Advertising dollars alone, they say, are no longer sufficient to keep these stations profitable. The answer, they argue, is to allow owners of local channels to charge carriage fees to distributors – the companies that bring television signals into customers’ homes via cable, satellite and optical fibre. Carriage fees are a huge source of revenue for specialty channels , and the owners of local stations say the specialty-fee model would rescue local television and allow it to continue delivering important services like local news.
The station owners’ argument is treated with scorn by the cable, satellite and fibre-delivery companies (known as “broadcast distribution undertakings,” or BDUs, within the industry). It would be nothing but another cash grab by wealthy media companies, they say, and make the cost of television service more expensive for customers.
Blais has made it clear he wants the CRTC under his leadership to take on a more consumer-friendly tone, and that may make the notion of carriage fees for local channels a no-go. The CRTC has instead proposed allowing local television channels to shut down over-the-air transmitters - something it says would dramatically cut their costs. BDUs would still be required to carry local stations in their basic packages. The big question surrounding Blais’ announcement in London is whether the CRTC has been persuaded to move off that position.
Will shutting down transmitters be enough for the owners of local channels? Not likely. It will re-ignite predictions that have loomed over that sector of Canada’s television industry for years – that station closings are inevitable.
Disclosure: BNN is a specialty channel owned by Bell Media, which owns the CTV television network, and CTV’s 28 local stations across Canada. At the Let’s Talk TV hearing, Bell Media called local television’s current financial model “unsustainable.” Bell is a “vertically integrated” player in the industry, which means it both owns and distributes content.