It’s not enough that CanWest became the most profitable television network in Canada by buying up Hollywood programming and inserting their own commercials in the U.S. network feed. It’s not enough that they gave back very little for this veritable licence to print money, reneging on many of the commitments they made for Canadian content. Now they want to rake it in with both hands. Here’s the rationale from Charlotte Bell, the company’s senior vice-president for regulatory affairs, writing in the company’s national newspaper, the National Post. If the name sounds familiar, she’s the one who got caught arranging a fundraiser for former Heritage minister Bev Oda, whose responsibility included broadcasting regulation, a tale I chronicle in Asper Nation.
“Cable companies have built profitable businesses based on the exploitation of free programming supplied by local broadcasters without giving any of the proceeds back to the stations,” argues Bell, playing to perfection the part of the pot calling the kettle black. “They take broadcasters' signals, charge you for them, and pay us nothing.” This argument ignores a small thing known as “must carry,” the fact that in exchange for a local monopoly cable systems are required by the CRTC to carry local stations on basic cable. Bell continues by arguing that the very type of specialty cable network that CanWest has recently invested in get a sweet deal compared to hard-done-by broadcasters.
Canadian pay and specialty services such as The Movie Network and TSN each receive a portion of monthly cable and satellite bills. Foreign services such as CNN, A&E and even the Playboy Channel also get a slice. Last year alone, $250-million from Canadians' cable and satellite bills was handed over to foreign programming services -- but not a cent went to local television
Bell’s column was written in response to a column by Phil Lind , vice chairman of cable giant Rogers Communications, that was carried alongside it in that day’s Post. That’s right, Bell’s column was a response, as she had obviously had the advantage of reading and rebutting Lind’s points, which she described as “disingenuous and misleading.” That’s just the kind of level playing field the Aspers love. Lind attributed the money grab to the recent expensive acquisitions of more lucrative specialty channels on the part of CanWest Global. “They want you to subsidize their local TV operations until they're as profitable as their specialty operations. That, in essence, is what fee-for-carriage is really all about.”
At least the Aspers were smart enough to get the CBC and CTV networks onside with this power play in order to prevent looking rapacious by comparison. After all, who can turn down free money, right? The networks are all crying poverty in unison in order to justify what is essentially a tax on television viewing, according to Lind.
CTV paid too much for CHUM, Global paid too much for Alliance Atlantis; and both, because they bid against each other, are paying far too much for U.S. primetime shows. CBC has set aside insufficient funds to upgrade its ageing facilities, preferring to squander its limited resources in bidding wars for the broadcast rights to blockbuster movies, hockey and the Olympics.
Let’s hope that if the CRTC goes along with this, at least the cable companies will be given the choice to opt out of carrying the new pay broadcasters. That wouldn’t go down too well with the networks, who would lose out on all the revenue from simultaneous substitution of their ads over top of the U.S. network feed.