Angry in the Great White North

As I've explained, broadcast television is dying.  The incompatibilities between the broadcaster-advertiser model and the cable/satellite-subscriber model are killing the broadcaster-advertiser model.  The solution has always been simple, and resolves the incompatibilities in one of two ways:

1. Have the cable and satellite companies respect the broadcaster-advertiser model and stop carrying broadcast signals beyond their actual broadcast boundaries.
2. Have the broadcasters become a real component of the cable/satellite-subscriber model by including them in that model's revenue stream.

Sounds simple, right?  It does to me, but according the head of the CRTC, Konrad von Finckenstein, there are no simple answers:

There's no simple solution for the problems that ail the Canadian broadcasting industry, the head of Canadian Radio-television and Telecommunications told politicians Wednesday.

Konrad von Finckenstein was grilled by MPs from all parties as they feel the heat from citizens worried about their local television stations.

Von Finckenstein said his agency is willing to temporarily lower Canadian content and local programming requirements for private broadcasters.

So that's all he has.  Let Canadian broadcasters carry more American television programs and so make more money, because we all know that given a choice, Canadians will prefer to watch American programs.

This is actually very clever.  Not that it will truly solve anything.  It won't and I'll explain that in a moment.  But the cleverness lies in the implication that Canadian television programming can't rely on popularity with Canadian viewers to sustain it.  Indeed, Canadian content is a drag on broadcasters, hence the offer to lighten up on it in times of financial stress.  The message is clear: Canadian content survives only because the CRTC is able to muscle in and compel broadcasters to pay for it and carry it.

See what I mean?  Konrad von Finckenstein has casually reminded everyone that the CRTC is indispensable.  Like I said, clever.

But lightening up on Canadian content doesn't solve the problem.  First of all, American content is very expensive to purchase, and producers in the US, hit by recessionary forces there, won't be in a mood to give discounts.  Broadcasters might still save money versus producing their own Canadian content under compulsion from the CRTC, but it might not be as much as in times past.

Finckenstein's assumption is that viewing audience will rise as the broadcasters fill in more of the grid with American shows.  But so what?  The audience is still fragmented in time and space because of time-shifting and station-shifting.  Advertisers are still going to face the problem that the audience being offered up by broadcasters is a mix of viewers from out of the broadcast markets, the fundamental affect of the carriage policies of cable and satellite providers.  Having two US programs back-to-back in prime time doesn't mean twice as much advertising revenue.

And anyway, it assumes that there is a endless pool of high-quality American programs that can be called on to fill in the grid, and that all was needed was the CRTC's blessing.  A lot of American TV is awful (same as any country).  Presumably the Canadian broadcasters have already purchased the best and most profitable stuff that is available.

But none of this is the real problem with this solution of decreasing Canadian content.  The real problem is the promise that if the Canadian broadcaster manage to turn the corner and make money again, the CRTC will increase the Canadian content requirements as punishment for succeeding financially.  It follows that if reducing Canadian content was the part of the solution for broadcasters struggling financially, then increasing the content again will eat into profits when profitability return.

What kind of message does that send to the banks and bondholders?  They are looking for the broadcasters to be a good investment now and for the foreseeable future.  That means a long-term solution that gives the broadcasters a chance for sustained profitability.  Dropping Canadian content now just to crank it up again later means the broadcasters will be right back where they started.  Why would an investor throw money into that?

It is a solution that only sustains the CRTC.

Not everything is bad news.  The CRTC has given its blessing to a negotiated settlement on time-shifting:

In addition, the regulatory body has cleared the way for broadcasters to charge cable and satellite companies for time-shifted local television.

But fee-for-carriage?  The sharing of revenue for all content distributed by the cable and satellite companies?  Nope:

But von Finckenstein seemed less enthused when he was pressed by MPs about private broadcasters' main grievance with the CRTC, the "fee for carriage."

Both Canwest and CTVglobemedia have expressed their desire to charge cable and satellite companies for transmitting their network programs, as is done with specialty channels.

"Fee for carriage is not the answer," von Finckenstein said Wednesday but added it was still on the table for discussion.

Why is still on the table if Finckenstein thinks it's a bad idea?  Well, perhaps he's keeping an open mind.

More likely, though, he's trying to protect his job.  If he had the courage of his convictions and simply said fee-for-carriage was out of the question, then he would likely be seen as a impediment to reaching a solution and would be replaced.

That's because MPs from both the Conservative Party and the Bloc Quebecois seem to think fee-for-carriage makes sense:

"As much as you say fee for carriage is not the solution, the status quo is not the solution either," Conservative MP Patrick Brown said, whose riding risks losing a local A-Channel station.

Bloc Quebecois Leader Gilles Duceppe also said he supports the idea.

Many politicians are worried about losing their local channels, which are responsible for much of their public profile.

I bet the Liberals and the NDP could get behind this too.  I've already said in print and on radio that this is not a polarizing issue politically.  A move by the Conservative government to impose fee-for-carriage legislatively would pass with broad support, perhaps with all-party support.

Finckenstein no doubt recognizes that, and is positioning himself to be able to accept fee-for-carriage with face-saving grace.  More likely, if he sees that fee-for-carriage is imminent, he'll simply implement it himself, since he never took it off the table.

Maybe I'm being too cynical about this, but it seems to me that the CRTC is looking out for the CRTC.  Finckenstein better hope that I'm the only who thinks so.

In any case, time is running out, and we can't be playing these games any longer.  If there is broad support for reworking the rules governing television to properly meld the two models together one way or another, then the government ought to act.  I expect the wheels are turning already.  If that means leaving the CRTC on the outside looking in, so be it.

Frankly, I don't see that as a bad thing at all.

Check out other stories from the CanWest archive.