Tag Archives: Shaw

Carriage battle brewing in Canada

The economic downturn and increasing audience fragmentation is hitting advertising revenue hard at North America’s broadcasters, forcing them to come up with new ways to shore up their bottom lines.

A comparatively quick fix being explored on both sides of the border is collecting retransmission fees for free-to-air channels that run on cable and satellite platforms.

The issue is playing out quite differently depending which side of the border your TV is on.

In the U.S., broadcasters can choose a “must-carry” option, which forces cablers to include such stations in their lineups, but without compensation; or broadcasters can elect to negotiate retransmission consent rights market by market, in which case there’s no guarantee a station will come to terms with the local operator.

The major network affils, however, have clout because of the exclusive program and sports franchises they carry, and in recent years U.S. broadcasters have been pushing cablers to pay far more per household — as much as 50¢ to a $1 — than they have in the past under retrans contracts.

News Corp. CEO Rupert Murdoch told shareholders recently that the conglom will be seeking higher broadcast network retrans fees.

In more heavily regulated Canada, where cable and satellite platforms must carry the Big Three broadcast webs, but pay no fees, the issue has sparked a spat between webs and distributors.

The campaign has gotten down and dirty, with both sides tubthumping their cause on websites, and in political-style man-in-the-street attack ads, media ops and print ads.

Pubcaster the Canadian Broadcasting Corp. and commercial networks CTV (owned by CTVglobemedia) and Global (owned by Canwest) have united behind a campaign dubbed Local TV Matters, and argue their need to secure a revenue stream that will support their money-losing, small-to-medium market stations. Compensation for carriage of the pubcasters’ content, they say, will save such stations from closure.

“We’ve always believed it was unfair the system didn’t allow us to negotiate fees with distributors who get our signals for free, but pay for U.S. channels and other services,” says Global’s senior VP of regulatory affairs Charlotte Bell.

CTV corporate affairs exec VP Paul Sparkes says his company advocates a Canadian version of the U.S. model.

Meanwhile, a coalition of distributors including Rogers Communication and telco giant Bell’s Bell TV launched the Stop the TV Tax Campaign, saying fees will increase customers’ bills.

Broadcasters immediately disputed the use of the word “tax,” since fees would not be collected by the government.

Distributors say they provide the valuable services of expanding a signal’s reach, and keeping it low on the dial, among other benefits.

“From our perspective, we don’t believe the must-carry rule will ever be removed — we’re a different marketplace from the U.S.,” says Rogers’ public affairs VP Jan Innes.

But things may be swinging in the Canuck broadcasters’ favor.

While industry regulator the Canadian Radio-television and Telecommunications Commission has rejected the broadcasters’ pleas for retrans fees for a number of years (turning down the latest demand last October), the federal government ordered the CRTC to revisit the issue last month, considering that cash-strapped companies have been closing local stations.Cable and satellite companies already must contribute a percentage of their gross revenue to the new Local Programming Improvement Fund, a temporary measure introduced by the CRTC that is expected to raise some $100 million during the 2009-10 fiscal year.

Media pundits, local actors’ union ACTRA, producers’ organizations and consumer advocate groups have come out in support of retrans fees, but warn that the spin is distracting Canadians from other issues, such as supporting local programming.

Now the industry and viewers will have a say.

As part of wide-ranging hearings to develop new frameworks for the country’s communications industry, which includes a broadcast rethink, the CRTC will begin a series of public hearings on Dec. 7.

Canuck consumers are being asked to weigh in on fees, as well as the 2011 digital switchover and Canadian content commitment by English-language broadcasters, among other issues.

Source: Variety

Shaw, CTF re – ignite bitter spat

TORONTO (CP) _ Shaw Communications Inc. (TSX:SJR) has re-ignited a bitter dispute with the Canadian Television Fund.

The cable giant is accusing fund executives of trying to tighten their grip on hundreds of millions in consumer and taxpayer dollars that are used to fund domestic TV shows.

Shaw’s CEO vowed to push for "radical change" to the fund in a letter written to CTF chairman Doug Barrett, obtained by the Globe and Mail.

Jim Shaw argued the CTF is misspending the money it gets from the government and industry.

Three months ago, Canada’s broadcast regulator ordered a review of the $265-million fund to quell a revolt by cable and satellite TV carriers who are its major contributors.

Shaw, along with Quebecor Inc.’s cable subsidiary Videotron Ltee allege the fund is using its June 12 annual meeting to rewrite bylaws to ensure cable and satellite carriers have little say in key decisions.

"What you are doing with the (annual meeting) demonstrates that the CTF does not consider itself accountable to the outside world," Shaw said in the tersely worded letter.

CTF could be in chaos

TORONTO (CP) _ Videotron’s decision this week to stop making its monthly payments to the Canadian Television Fund makes it impossible for the agency to plan for the upcoming year and that could put thousands of jobs at risk, the fund’s chairman said Wednesday.

CTF chairman Douglas Barrett said the Canadian television production industry will become "chaotic" as the fund struggles with an impending $63-million budget shortfall after Shaw Communications (TSX:SJR.B) said last month and then Videotron announced Tuesday that they would suspend their contributions.

"This is tens of thousands of jobs," Barrett said in an interview from the Quebec’s Eastern Townships, where the fund’s board is holding a retreat until Thursday.

"If these productions don’t proceed, this has an impact on broadcast schedules and production companies in this country who are already in a fragile state."

The fund said Wednesday it will ask Canada’s broadcast regulator, the Canadian Radio-television and Telecommunications Commission, to take legal action against Shaw and Videotron..

"The CRTC has regulations and it’s their legal duty to enforce them," Barrett said. "And we’re going to ask them to do so."

Quebecor Inc. (TSX:QBR.B), which controls Videotron through Quebecor Media, is also demanding that Heritage Minister Bev Oda launch a review of the management of the fund, which is coming up for renewal in March.

The latest developments are "very concerning" and will have a "significant impact" on Canada’s television industry, Chisholm Pothier, a spokesman for Oda, said from Ottawa.

"We hope that the sides come to a quick resolution, but in the meantime, we’re going to monitor these events as they unfold and what action we take will be determined in the wake of what happens in the next few days," he added.

CRTC regulations require medium and large cable and direct-to-home operators to contribute to the fund, based on a formula which includes gross revenues and the number of subscribers.

The CTF invested about $264 million in Canadian programming in its 2005-2006 year and receives about $100 million annually from the federal government.

But the two cable distributors say they are frustrated with the CTF, which they say isn’t paying enough attention to the concerns of its private-sector contributors.

Quebecor also objects to the fund reserving 37 per cent of its production funding for the government-owned Canadian Broadcasting Corp. and its French-language counterpart, Societe Radio-Canada, even though the CBC/SRC also receives more than $1 billion in government funding annually.

Videotron contributed $14.3 million to the fund in 2005 and estimates that its obligation will be about $16 million this year. Shaw’s contribution is about $56 million.

A spokeswoman for Rogers Communications, owner of the country’s largest cable distributor, declined to comment about the funding pullout, but said Rogers has contributed between $25 million to $29 million annually to the fund over the past few years.

Rogers estimates that its contribution to the fund will be about $34.1 million in 2006, but the company, like many who contribute to the fund, has the option to divert 20 per cent of their contributions to another CRTC-approved independent production fund.

Created in 1994 at the request of the CRTC, the CTF has helped fund such television shows as "Degrassi: The Next Generation", "Trailer Park Boys" and "DaVinci’s Inquest."

The fund’s board includes representatives from the Canadian television production and distribution community, Department of Heritage, Canadian cable and direct-to-home satellite companies and Canadian broadcasters. Board members are elected each year and at least five directors must be independent.

The fund’s board of directors is expected to meet in late January for a previously scheduled strategic planning session to establish the future direction of the organization.

But already, Videotron’s decision to join Shaw in withdrawing its financial support of the fund is sending shockwaves throughout the domestic television industry, whose could see project funding dry up within the next few months.

"The Canadian production industry would die a slow death _ maybe not such a slow death _ and the Canadian creators would no longer have work," said Pamela Brand, executive director of the Directors Guild of Canada, which represents over 3,800 people in the film and television industry.

"The Canadian voice would be completely gone, and the industry would wither and die. That’s what is at stake for us."