Back blogging this week, with a simpler-looking blog. That big tv on the header was starting to bother me. Maybe I'll pretty it up when I get a chance.
On to business: About a week ago, I decided I would attend the annual convention of the Canadian Association of Broadcasters, which is taking place here in Ottawa. The conference, which is intended for Canada's private radio and television broadcasters, always focuses on key policy questions and business issues affecting the country's broadcasting system, and so I've always felt as though it would be great to see the event first hand.
The timing of the event couldn't have been better, since the convention comes on the heels of the CRTC's policy framework for Canada's satellite and cable companies – what the CRTC calls “Broadcasting Distribution Undertakings,” or BDU’s.
The conference kicked off with a set of opening remarks from the Chair of the CRTC, Konrad von Finckenstein (you can find the speech here) and the discussion continued later in the morning with a spirited session featuring reaction to the CRTC's decisions by key regulatory officials from Canada's DTH, specialty-services, networks, and cable providers.
Let's have a look at the some of the big ticket items from the CRTC's report, sprinkled with some impressions from those overheard at the convention. The media coverage of the report seemed to conclude that this represented a case of some minor tinkering with the system, nothing major to report. However, a closer look at the report itself, and taking into consideration the dissenting remarks of 2 commissioners and the comments overheard at the convention, it is likely there was more at play than these articles suggest.
De-bundling: The CRTC has now loosened the rules governing the ways that BDU’s package specialty services. What this means practically is that the bundling of cable services can no longer be considered as a policy exigency. BDU’s are free to offer any composition of channels that they wish, provided that the overall package chosen by each consumer features 50% plus one channel that is Canadian.
Most media coverage of the CRTC report took the angle that the report’s big finding means greater flexibility for Canadian consumers. However many people – including representatives from the broadcasting companies and from companies like Bell and Rogers – seem to think otherwise. The key here is that bundling no longer has a regulatory rationale, but this doesn’t mean that there isn’t a business case for BDU’s to develop customizable broadcasting options. At one session I attended, one representative noted that nowadays people no longer advertise for specific services but rather focus on the bundling or packaging of services with cellular phone subscriptions, home phone services, high-speed internet services, and so on. Other people at the conference wonder if the new measurement – 50% plus 1 – is effectively counter-productive to the objectives of the Broadcasting Act, in which the CRTC says it defends Canadian content but doesn’t offer a ruling to encourage that when Canadians fill out their cable packages.
For me, the first concern is more pressing than the second. Issues about how Canadians will fill in their television choices are largely irrelevant if these opportunities are not available to them.
Genre Protection: The CRTC kept genre protection in place, keeping HBO and other American or foreign services out of the country. There was some relaxing of the rules in other cases, however.
The CRTC declared that two genres – news and sports – are healthy enough to stand a little competition – from Canadian-owned and operated entities. The CRTC also noted that there can be greater flexibility within genres. What this means is that an all-sports channel like TSN can now air movies with sports content like “The Rocket” (might this mean an airing of “The Fish that Saved Pittsburgh”, the first movie I ever saw at a theatre? One can only hope) up to a minimum of 10% of their overall content.
For Canada's private broadcasters, genre protection is a sacred cow. This is for good reason: it keeps them in business. Many specialty channels would not be able to continue running if either the original station (like the Food Network) or if American competition were to enter the marketplace. For companies like Astral Media, which owns The Movie Network and Super Ecran and will be bringing HBO Canada to the country some time soon, the news about genre protection was met, without surprise, with a sigh of relief.
The CRTC again trumpeted the creation of competition for news and sports as something which benefits consumers and which will encourage new entrants and innovation in these genres. Again, many around the table are unsure whether new entrants will get into the game because a) starting a television station is expensive b) both news and sports are expensive genres c) without guarantees of carriage offered through bundling schemes, it would be difficult to guarantee a solid revenue base to keep it a going concern.
For me, this is more a case of lateral movement. Genre protection symbolizes the very essence of the regulatory policies that underlie Canadian broadcasting: You allow Canadian broadcasters the “right” to import foreign programming and to a genre monopoly so that the broadcaster will generate sufficient revenue to put back into the system to support independent production of Canadian television. Until anyone is prepared to reform that arrangement there’s not much to say here. The decision also ushers in a period of "TBS or WGN-ification", where specialty channels will begin augmenting their primary content with movies or syndicated television programming. How the 10% figure --- or any of the various percentages which govern the Canadian broadcasting system, for that matter -- was determined is anyone's guess.
I'll be back tomorrow with Part II and even more acronyms!
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