Tag Archives: OUTtv

A Hodge Podge of CRTC Decisions (Independent Licence Renewals)

Or is it a mish mash?  I’m not sure of the technical term here but last Friday afternoon when most of the world was either sitting on a patio or packing up the car for the last summer long weekend, the CRTC released a whole pile of renewal decisions.  Several of them are of interest.

As you will remember, when the s.9(1)(h) hearing was posted, the call for comments included a number of non-appearing licence renewal applications for independent (i.e. not part of the large groups like Bell, Shaw, Rogers and Corus) broadcasters.  They were to some extent lost in the hubbub over the mandatory carriage applications but a few stalwart stakeholders weighed in.  I outlined a few issues that interested me in an earlier post.

I won’t go through all of the decisions but I do want to mention a few themes that came to mind as I read them.  The first is that almost all of the broadcasters asked for reduced CanCon expenditure and/or exhibition requirements.  This is partly because they can no longer include the CMF top up as part of their expenditure requirement.  As the top up was part of broadcasters’ calculations when they proposed their CPEs in their licence applications, the Commission has decided that it is fair to allow them to make new proposals at a lower level.  Most of them had reductions approved but not necessarily the full extent that they asked for.  ‘Why’ is interesting.

There seems to be a real attempt by the Commission to rationalize the various Cat A (and a few Cat B) licences so that there is some consistency of conditions of licence.  Services were licensed at different times, with different competitive environments and natures of service so to some extent they should have differing terms but the conditions of licence have morphed into a crazy quilt where the rationale is not always evident.  Where it doesn’t make sense to have different terms, the Commission has gone for consistency.  So, while OUTtv asked for a reduction in their CPE from 49% to 35%, they were granted 40%.  ONE asked for a reduction from 41% to 30% and they were granted 40%.  Blue Ant’s Cat A’s were granted 40% CPEs as well.  Most Cat A’s have a CPE of 40% so there’s the reason for the pattern.

Superchannel also asked for a reduction in CPE from 32% to 27% and they were granted 30% because Superchannel is a pay service and the more established TMN and Movie Central have 31% CPE and Family Channel (equally established but for some reason lower) has a CPE of 30%.  The Commission made that decision on the basis of consistency and did not accept Superchannel’s arguments that it has been having a hard time getting started and needs the break.  Here’s the interesting part.  Superchannel has had a hard time getting started and did have to complain to the Commission because they couldn’t get carriage or even if they did have an agreement, the BDUs weren’t letting their consumers know that Superchannel existed.  But the Commission based its decision on a) Superchannel made commitments to win their licence in a competitive bid so shouldn’t be allowed to make less of a commitment now that they  have the licence and b) they were in serious and regular non-compliance at the time that they asked for the break.  Superchannel also asked for a break in their regional outreach and script development commitments ($1 million annually for regional and $2 million annually for script development) and the Commission gave it to them but on the condition that they also pay the unspent commitment of $6 million, which averages out to a total of $2.5 million per year instead of the $3 million they were supposed to spend.   [Note – if you’re a screenwriter you might want to go knock on Superchannel’s door as they have to spend $1.5 million in script development annually.]

But that leads me to another theme.  When you are asking the Commission for a break, it helps if you have been following the rules over the last licence term.  Blue Ant asked for a number of concessions including being treated as a modified group under the group-based policy so they can allocate their CPE across the group.  They do not technically qualify because they have no conventional services but the Commission decided to agree because a) it is important to diversity in the system to have strong independent broadcasters and b) Blue Ant had demonstrated its commitment to Canadian programming through its historical CPE.

Now Blue Ant didn’t get everything that they asked for so there is a limit on what you can get just by being a good broadcaster.  I think that it was a little cheeky of them to ask that their inhouse production be treated as independent in order to qualify under independent production requirements, particularly using the argument that the independent production sector is small now due to consolidation.  Blue Ant’s services are lifestyle, reality and documentary services for the most part and there is no shortage of small producers working in those genres.  The Commission correctly denied the request in order to help those small producers continue to find sources for their programming.

Another item of interest across a number of decisions is the refusal to require that the independent broadcasters adhere to Terms of Trade.  The rationale is that Terms of Trade are necessary to balance the uneven bargaining positions between large broadcasters and small producers but with these independent broadcasters there is no such imbalance and the producers do not need help in their negotiations.  I wonder if the really small producers who work with these independent services feel the same way.

There was a lot more there of course so if you’re interested in the individual independent services, then check out the specific decisions.