Monthly Archives: May 2013

CBC Licence Renewal – More Than Just Ads on Radio

The CRTC issued its CBC licence renewal decision today and I of course have a few thoughts about it.  But first – my context.  While at the WGC I spent a lot of time over two years (due to hearing postponements) working on a submission and presentation to the CRTC on CBC’s licence renewal.  My thoughts here are informed by that thought and analysis but not limited by it.  I’m also in no way representing the WGC.  Remember – it’s just my own somewhat informed personal opinion.

Renewal was never at issue but just the terms of that renewal.  The decision to allow limited ads on Espace Musique and Radio 2 for three years has received most of the attention and will be the headline in the news but there’s an awful lot more in the 124 page decision.   As an English TV content person I have very specific interests – nothing about French tv or radio and little about radio.  With that in mind, here are a few comments.

The whole CBC Licence Renewal process was very belaboured and it was what I think of now as the ‘old’ style of broadcaster application.  As broadcasters have done for years, the CBC submitted an application that asked for a great deal of deregulation and included lots of  ‘trust us’ language.  Stakeholders objected and provided evidence that trust was a questionable strategy.  The CBC countered at the hearing and during the reply stage with compromises – often as a result of clear messages from the CRTC during the hearing.  This is the  ‘public hearing by negotiation’ that the Chair, Jean-Pierre Blais, has objected to on more than one occasion.  [This may be the last time that we see this strategy as in the Bell-Astral2 hearing Bell certainly heard the warning and came to the CRTC with its bottom line rather than an opening bid.]

In the meantime though, when assessing the decision you really need to look at both the original proposal and the final proposal when looking at the decision.  In several instances the Commission seems to have felt that the CBC made enough of a concession in their final proposal that it didn’t need to push it further.   You may not agree.

The crux of the matter though was how to balance ensuring that the CBC met its regulated mandate with the clear reductions in its parliamentary appropriation.  While the government has said that the CBC has a record high appropriation, the CRTC crunched the numbers and started the decision by saying that the 2011-12 appropriation was comparable in adjusted dollars to the 2002 appropriation though $180 million higher in actual dollars.  By the end of the next term in 2019, the appropriation will actually be $160 million less than 2002 in adjusted dollars.  So how does the CBC manage to meet its mandate with fewer resources?  The CBC argued that it needed flexibility to figure out on its own how to meets its mandate with fewer resources but the Commission definitely didn’t buy the blanket ‘trust us’ argument.  The CRTC decided that there had to be a few ground rules but they are going to allow more trust than most of the content creators are going to be happy with.  Here are a few highlights from the English TV perspective.

In a number of places the CBC had expectations and they are now conditions of licence.  There is no negative consequence to not meeting an expectation.  It’s a suggestion that may or may not be met.  As part of the licence renewal application for the next term, CBC will have to report on whether it met its expectations but not before.  A condition of licence however is enforceable and the CRTC can bring  the CBC back before it in a ‘show cause’ hearing or with a mandatory order (See the OWN hearing for a recent example of a show cause hearing and the resulting decision as an example of a mandatory order).

CBC had asked for a condition of licence (“COL”) of 7 hours of PNI per week when they historically had been commissioning 10 hours.   By the end of the hearing they moved to 9 hours of PNI and the CRTC has accepted that.  That doesn’t sound like a big difference and the CRTC made the point that quota should be less than historical commitments because going forward the funding would be less than historically received (despite CBC’s very positive revenue projections in the application).   But the decision also accepted the proposal that only 75% of PNI (or 5.25 hours) would be independent and that a minimum of 2 hours would be drama and 2 hours would be documentary.  Content creators and especially DOC fear that CBC would only do the minimum of 2 hours of documentary (down from current levels of 3 hours per week) and increase the amount of in-house production that they are currently doing.  The CRTC’s argument is that these are minimums, they ‘expect’ the CBC to exceed those minimums and they believe that the CMF guidelines and the CBC’s need to build audience and generate revenues will be enough incentive that additional regulation is not necessary.

Respectfully to the CRTC, I see some holes in that argument.  CMF broadcaster envelopes are based in large part on audience success (way complicated).  The CBC is not and cannot be all about chasing large audiences to increase their CMF envelope or their ad revenues because then it stops being a public broadcaster.   Its mandate includes offering a variety of programming so that all Canadians can find programming on CBC, not the same program to each and every Canadian.  This is why even at 3 hours a week, the CBC offers more documentary programming than the private broadcasters.  Any push for larger audiences in order to increase CMF or ad revenue is likely to mean fewer documentaries as they just do not have the same level of audience as prime time dramas such as “Republic of Doyle” or “The Rick Mercer Report”.   Regulation was needed to ensure that the CBC did not ignore its mandate in search of revenue.

Then there is the issue of the CBC’s excessive use of minority co-productions (“Tudors”, “Pillars of the Earth” etc.) to meet its Canadian content obligations.   The WGC proposed excluding them from calculation of PNI as they use few Canadian resources.   The goal was to find a solution to an imbalance in broadcasting co-productions that meant fewer opportunities for Canadian talent on Canada’s broadcaster.  Well, the Chair of the CRTC is well-versed in co-production policy from his previous employment at Heritage and the decision refers to the biggest policy hurdle to addressing the imbalance – the policy of ‘national treatment’ means that were the CRTC to agree to that exclusion, there could possibly be international trade repercussions.  However, at the hearing the Chair had countered that a possible solution was requiring an overall balance of co-productions within PNI so it was disappointing not to see that in the decision.

The CBC’s previous expectation that it broadcast Canadian programming for 75% of its day and 80% of its prime time period has now been entrenched as an enforceable condition of licence.  While some parties, such as ACTRA, wanted the CBC to move to 100% Canadian programming in prime time, the CRTC agreed to what I think of as the ‘Coronation Street exception’.  There would be riots in the streets if the CBC had to get rid of it, riots in the streets.

Now for kids – a subject near and dear to my heart ever since my earlier time with Owl Television.  CBC has stated that they want to move away from school age and youth programming and concentrate on preschool programming.  They stated this made sense because these age groups were leaving broadcast television and going online, where their needs will be met by CBC.ca.  No evidence was presented to support the departure of kids and youth from tv and Youth Media Alliance presented stats to the contrary.  However, the CBC had also not presented any evidence about what it is doing and how much it is spending on CBC.ca.  Many stakeholders, and particularly the Youth Media Alliance, presented arguments and evidence to demonstrate a need and a want for quality school age and youth programming for Canadians on CBC.  The CBC revised its proposal to a condition of licence of 15 hours of programming for children up to 12 years of age and an expectation of 5 hours for youth 12 to 17.  The CRTC ‘expects’ a reasonable allocation between preschool and school age programming.  There is a new requirement of 1 hour of original programming per week.

The good news in this is that the children’s obligations have moved from expectation to COL but the bad news is that youth programming hasn’t and there is no protection of school age programming within the allocation of 0 – 12.  Given that in the last licence term there was an expectation of 5 hours of youth programming that was completely ignored I don’t understand why the CRTC thinks that an expectation is good enough for the coming licence term.  The CRTC’s logic is that 1 hour of original programming is more of a commitment to original programming than zero but that still will not prevent the CBC from meeting its commitment as it does now through airing a lot of very old repeats.  At the hearing there were many passionate arguments about the obligation of Canada’s public broadcasters to meet the needs of its youngest citizens and I am afraid that we will be hearing these arguments again in 5 years.

There was one little part that I did enjoy in the kids part of the decision.  This Commission isn’t buying the argument that the last Commission agreed with – that families should just pay for YTV, Treehouse and Family Channel if they want kids programming.   The Commission stated clearly that as private conventional broadcasters have moved out of kids programming, it is even more important that the CBC as Canada’s public broadcaster support the kids and youth audience.  We just don’t agree on how that will happen.

During the hearing the CBC committed to broadcast one Canadian feature film per month but would not commit to when they would air them.  They wanted the flexibility to air them on Saturday afternoon or late in the evening.  Really late.  As most audiences are still watching tv during prime time, there were calls for a commitment to air Canadian feature films in prime time and not let the CBC dump them in off hours.  As I recall the DGC was pretty insistent on this point.  The CRTC has instead ‘encouraged’ the CBC to air Canadian feature films in prime time and in a regular slot in the summer (ie when there is no hockey).  I think an encouragement is even less than an expectation.

A really wonky request was for more detailed reporting to be able to assess whether CBC is meeting its expectations and COLs and encouragements (is that a word?) while the CBC was arguing for less reporting.  One in particular that interests me is the call for reporting on the CBC’s digital expenditures and revenues.  On the one hand the CBC is saying that it can get out of kids and youth programming because it is doing a lot for that age group online while on the other hand they are not reporting any of that activity because there is no requirement.  The CRTC reiterated that as a Digital Media Broadcasting Undertaking (DMBU – successor to the much loved NMBU) is exempt from licensing, there is no requirement to report other than the vague reporting that is currently reported to the public in an industry aggregated way.  Any greater reporting could somehow harm developing business models.  I hope then that the CBC will not be allowed to make the claim again at the next licence renewal hearing that these unreported activities can take the place of regulated activities.

The final piece of interest to me is on terms of trade.  The Commission declined to wade into the competing stories about why no agreement had been concluded (this had taken up a lot of hearing time) but was very firm and clear about its jurisdiction to impose a terms of trade agreement if it wants to, regardless of the CBC’s legal opinion to the contrary.  While it won’t at this time impose Terms of Trade, the CRTC gave the parties one year to conclude an agreement or risk a show cause hearing or a mandatory order (see above).  Will that be enough to break the log jam?  We can only wait and see and hope that it happens.     Terms of Trade are important to provide stability and certainty in negotiations and create a level playing field between parties so we do all need the CBC and CMPA to conclude Terms of Trade.

Oh, that’s a lot of stuff.  I congratulate you if you made it to the end.  Just imagine if I was interested in French TV and radio!

How I would like you to use LinkedIn

[Remember – this is my blog so I can muse about whatever I want.]

I think that we’ve all noticed that LinkedIn usage has jumped in recent months.  According to LinkedIn itself, membership grew by 16 million to 225 million in the first quarter of the year.  That’s a 7.6% increase in just one quarter.  It is the 22nd most visited web property in the world.

LinkedIn is an ‘old’ social network since it launched in 2003.  Many people (myself included) built a profile and then ignored it.  Many of you still are ignoring your profile because you think that you are not job-hunting so don’t need it.  I am posting today to ask you to update your profile.  Please.  For me.

There are two things that I use LinkedIn for now and neither is job hunting.  One is to publish blog posts.  Links to a blog post go out simultaneously on Twitter, Facebook and LinkedIn.  If you miss it the moment that it goes out on Twitter, you can find it more leisurely on LinkedIn or Facebook.  That is, if you are connected with me in either place (and note that I have to know you pretty well to connect on Facebook – not so much on LinkedIn).

The other thing that I use LinkedIn for is to check out people’s profiles before I meet with them.  Before in my previous job and even more now, I frequently meet with new people.  I like to check out their profile first to see what they look like (it helps when meeting for coffee in a crowded café) and get a better handle on what they are doing now and what their background is.  This is why I would like you, all of you, to post a photo and update your LinkedIn profile so that it tells me what you are doing now and the essential things that you have done in your past.

And yes, I also use LinkedIn to build a network because you have no idea where the next consulting gig is going to come from.  And when I was hiring in my last job I always checked out the applicant’s LinkedIn profile.  So for independent consultants and job hunters or engagers it is essential.

But for the rest of you – please update your profile!

The CRTC’s 2013-2016 Three-Year Plan

The CRTC’s updated Three-Year Plan was released yesterday.  This is a useful document for stakeholders to get a general idea of when larger policy hearings are intended to be conducted.  It can help in budgeting, though there will always be more hearings than are in the plan, and in research planning.  For those who haven’t read it, from a broadcasting perspective these are the CRTC’s planned activities that I think are worth noting for stakeholders (under the CRTC’s heading ‘Create’):

–       There will be a ‘conversation with Canadians’ about television in 2013-14.  I have no idea what that means but I assume that we will hear shortly.

–       The genre protection policy was to be internally reviewed in 2013-14 but that has now been postponed to 2014-15.

–       The policy for Cat A services will be reviewed in 2015-16 to see if it is time to license more of those services.  Cat A’s have priority carriage and CanCon obligations that Cat B’s don’t have.

–       In 2013-14 there will be a written consultation on the commercial radio policy

–       The CRTC will internally research Cultural Diversity policy in 2013-14, possibly undertake a public fact-finding consultation in 2014-15 and may then have a public hearing on cultural diversity policy in 2015-16.  There already is in place a cultural diversity policy that aims at ensuring that broadcasting is cultural diverse in employment and programming and the broadcasters have reports that they have to file each year to demonstrate their activities to that end.  It will be interesting to see if this policy is working well or not.

–       The CRTC will undertake the same research, fact-finding, public consultation process for Ethnic Broadcasting, both television and radio.

–       There will be a review of Native Radio Policy in 2015-16.

–       The Tangible Benefits Policy will be reviewed by written consultation as will the valuation policy, in 2013-14.  A new policy will not be implemented until 2014-15.  The knee jerk reaction is to suggest that there will be no more major transactions by that time but every time someone says that the market turns around and presents us with another major acquisition.  It isn’t going to hurt to have greater clarity on what are acceptable benefits package allocations and on how the CRTC assesses valuation of assets for determining the amount of those benefits.  I was on a panel at the 2012 Law Society of Upper Canada’s Biennial conference on Communications Law and Policy where both stakeholders and broadcasters called for greater clarity and consistency in both valuation and tangible benefits policy.

–       Rogers’ TV licences are up for renewal in 2014-15.  They have added several new stations since they were last licensed so expect a call for a higher commitment to Canadian programming and their resistance to that.

–       In 2015-16 Bell, Shaw and Corus have their group licences up for renewal.  We have not yet seen the reports of the first year of their licence term so it is early to speculate on what the issues will be for renewal – but there will be issues.

The headings for Connect and Protect have quite a few topics as well.  Feel free to review the Plan if you’re interested in what the CRTC has planned for telecomm, pay phones, broadband performance,  wireless code of conduct, 911 services and more.

I’m going to not think about the CRTC for the rest of the day.  Next week it’s Bell-Astral2 for the whole week so I don’t know about you but I need just a little break after almost two weeks of #91h.