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The TV gap

Canadian television has been in the spotlight a lot recently, and some experts are openly questioning whether Canadian television can survive the future without abandoning Canadian Content laws or increasing revenues.
andrewbyline

Canadian television has been in the spotlight a lot recently, and some experts are openly questioning whether Canadian television can survive the future without abandoning Canadian Content laws or increasing revenues.

This debate has been a long time coming. As of 2005, 87 per cent of Canadian households subscribed to either a cable or satellite television service, thereby reducing their inclination to watch local television networks. Although most packages do come bundled with local networks, the sheer number of channels means viewers have more choice than ever, and with technologies like TiVo and Personal Video Recorders, they can often choose what to watch and when.

Television networks are entirely reliant on advertising revenues. That wasn’t a problem when everybody had rabbit ears on their sets and watched whatever signal came in the cleanest — you were a captive audience of sorts. Because of cable and satellite, those advertising revenues are being diluted over more and more channels, and traditional networks are seeing their viewer numbers and ad revenues drop.

Because Canadian networks have a legal obligation to produce Made-in-Canada shows, the loss of ad revenues makes it more of a burden to produce original programming.

To ease the burden, networks are asking for Canadian Content laws to be eased to allow them to broadcast more shows produced in the U.S. and abroad. The networks have also petitioned Canadian cable and satellite companies — who are raking in billions distributing network content to subscribers — to share a portion of their subscription fees. For example, CanWest has proposed a 50 cent per subscriber fee from cable companies per month.

Because the airwaves are free, the cable and satellite companies see these fees as an unfair tax on a free resource. They also say they will have to increase their monthly fees by several dollars a month as a result, which in turn hurts consumers and their business.

My own feeling is that CanCon laws are necessary to ensure that television reflects the culture of our country. And it’s working — without CanCon there would be no Corner Gas , no Trailer Park Boys , no Sons of Butcher , no Traders , no Red Green Show , no Da Vinci’s Inquest , no SCTV , no Bob and Doug McKenzie … the list goes on. Not all personal favourites, but all shows that have been profitable, and are being broadcast around the world.

As for broadcasters seeking a share of cable and satellite subscription fees, I’m all for it, though I won’t be happy paying a surchage. By bundling programs onto cable, or beaming them up to a satellite, companies like Bell, Shaw, Rogers, Comcast, and others are already putting a price on “free” broadcast resources. It’s not fair that the middlemen are reaping all the profits from distribution, when the networks that produce the product are struggling. At the same time the distributors are carrying so many channels they are making it harder for networks to land advertisers.

The same distribution companies are also constantly fighting CanCon laws, constantly petitioning the CRTC to carry more specialty channels from the U.S.

These aren’t the only issues that could impact the future of Canadian television. According to a recent CBC article, Canadian broadcasters have been slow to embrace high-definition and digital television formats, while at the same time companies like Future Shop and Best Buy are doing a brisk business selling next generation television sets.

Several countries in Europe have already phased out analog television, and the U.S. has committed to switching over to digital by 2009. The Canadian Radio-television and Telecommunications Commission has not set a date for the switch, but instead decided to leave it up to market forces. They will have to revisit that decision this week when the CRTC board meets to discuss all the issues impacting Canadian broadcasters.

Without a law mandating the switch to digital, and to offer high-definition, Canadian companies have been naturally slow to embrace these new technologies — mostly because of the additional costs involved.

There’s also some geography involved. Upgrading the signal means upgrading hardware and transmission technology, something easy to justify in the population-heavy U.S., but hard to justify for more unpopulated regions of Canada.

Also, until all stations move over to digital and HD, there’s very little incentive for any company to voluntarily make the switch. Nobody wants to fall behind, but nobody is prepared to take the lead either, given the uncertainty of the market.

CBC, which receives close to $1 billion a year in taxpayer subsidies, is also under review. Independent Canadian networks object to the fact they have to compete with a publicly funded entity for advertising revenues, that CBC carries American shows, and that networks still have to create their own Canadian Content even though there is a national network that was created for that purpose.

I would add another item to CRTC’s list of topics. In the U.S., the right to access public airwaves trumps every other law and regulation governing the distribution of television and radio — including laws that empower strata corporations. If a strata doesn’t provide a high definition satellite feed, then you’re legally entitled to install your own.

I have a high definition television, don’t want cable (signal quality and cost), but my strata won’t allow residents to install their own high definition satellite receivers. I have no rights in this matter, and no recourse until the strata decides to upgrade the common satellite feeds.

For more on the network vs. cable and satellite vs. CanCon vs. digital television debate, visit www.crtc.gc.ca.