Friday, April 08, 2011

This Is Why We Can't Have Nice Things

waiting on the crtc

After three days of CRTC license renewal hearings for Canadian broadcast networks, panel after panel of smartly coiffed and perfectly tailored television executives left me with one overarching impression -- "What a bunch of whiney little bitches!".

Virtually to a person, the captains of our industry, the purported movers and shakers of our nation's digital future made it abundantly clear that they are completely out of their depth, lost and afraid, unable to face the world without a bigger allowance from daddy and the nanny state hovering to kiss their boo-boos and make the scary Netflix man go away.

The following are some of my favorite quotes, gleaned from a faltering audio stream provided by a Commission itself apparently incapable of even adequately communicating in a digital world they clearly don't fully understand.

As I tweeted in frustration somewhere during Day Two…

"Do you ever wonder if the CRTC takes broadcasters in-Camera before they can make COMPLETE Public Ass-hats of themselves?"

However…

viewer discretion

Be forewarned that you probably don't want to read all of the following transcripts. Doing so can lead to nausea, vomiting and suicidal thoughts. As Will Dixon aptly put it at one point in the proceedings, some of this stuff will make you want to walk into traffic.

But to begin. And with our largest media conglomerate Bell Media.

On the question of why, despite increased funding to support Local television, Bell Media still cannot deliver a mere seven hours per week of local news…

THE CHAIRPERSON: LPIF funding is something we made available to you from the distributors. It is clearly a source of revenue.

MR. GOLDSTEIN: The LPIF was very much welcomed by the industry, but it also became, effectively, a subsidy to conventional television stations in small to medium markets. And…if you get $100 of LPIF you can put $100 towards local programming, but then it will require you to spend an additional $30 on local programming on top of that. So essentially what it does is it devalues the subsidy overall, somewhat of a mathematics issue.

MR. GRAY: It costs two and a half times what it costs on a normal day to produce a newscast on a stat holiday, when there are far, far fewer viewers tuning in to local news. At "A" Vancouver Island, the normal cost of a newscast is $11,500. To produce that same level of news coverage on a statutory holiday costs us $29,000."

No matter how much money you give these guys. It will never be enough. There will always be a reason why they need even greater accommodation.

Canadian TV has been around for 60 years and we have finally spawned a generation of executives who couldn't manage a sandwich shop or any other Mom and Pop business that has to deal with the normal realities of everyday life.

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Here's Bell on why overpaying for American content for "A" Channels remains the only way for that network to survive:

THE CHAIRPERSON: I still have in my mind the statement from Mr. Fecan that you need two distribution chains, one for your very big hits and one for the sort of secondary hits which, unfortunately, Hollywood makes you buy, and so rather than putting them on the shelf you put them on your secondary chain. Unfortunately, that becomes a self-fulfilling prophecy because if it's secondary programming you are also going to get secondary audiences.

MR. KING: But the challenge with that, of course, is you will be forced to pay premium prices just because you are going to buy a show from the Hollywood studios, they are going to want the same price because our competitors will be bidding on that same show that would be a hit.

The obvious way to make the 'A's work would be to populate them with more hits and invest more money into that. That is not as easy as you think it is, but we will do so and we have a budget for it and even a promotional plan, which I think it has perhaps lacked in the past, that you will see a significant increase. So this fall that is our goal, is to give them a much more -- a fighting chance, I guess I would say.

THE CHAIRPERSON: So you, if I understand it, as much as possible, as much as economics allow it, you will have the same programming for them as CTV?

MR. KING: Yes, not repeat programming. It will be fresh programming and we will buy the best shows that that economic structure can withstand and then we will promote them like crazy. That is the magic of CTV and we are going to try to replicate that on the 'A's this fall. So we are bullish on it. We actually think it can be done.

There are different ways to do it. You can spend a lot on foreign programming, and the advertising market probably would not be there to support it, or you can put lower-cost programming on it and take your chances there, and that hasn't been received particularly well. So we are thinking probably a hybrid model of some hits and some perhaps smaller shows is the way to go and we will find out this fall if we are successful.

In other words -- we're going to keep doing what hasn't worked until if finally -- uh -- does.

losers since

The nice people at Bell Media also explained what makes an Educational Channel "educational":

COMMISSIONER MENZIES: I have been looking at your website here and the only thing I can find in terms of what you are promoting heavily to do with the education is the fact that the cheerleaders in "Hellcats" go to college.

Shouldn't we just be having a grownup conversation about what sort of licence this really should be? Because it is unlikely to evolve into an educational network. You know it and we know it. Shouldn't we be talking about what sort of licence this really should be?

There's two promos for Monday night, "Two and a Half Men" and "Mad Love"; Tuesday is "Sanctuary," and "Sci-Fi"; Wednesday is "Hellcats," also on Wednesdays, "America's Top Model; Thursday is "Nikita,"; Friday "Shark Tank"; Sundays -- I missed Saturday somehow. Sundays is "America's Next Great Restaurant"…

MR. LEWIS: We need to drive audience. We need to have popular programming to make money and that is one of the ways that we do that.

Next it was Rogers Communications turn, featuring one of their latest acquisitions, President Keith Pelley, hereafter to be known as "Pelley the Cable Guy".

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Anyone who has tuned into Canadian sports radio for the last decade is all too familiar with this full-of-himself, I'm-so-hip-it-hurts blowhard. He's the kind of guy who plays with his balls while loudly chatting up the waitresses at Hooters when you're trying to watch the game.

Here he explains how not changing a broken business model actually changes everything for the better:

MR. PELLEY: Coming from CTV I am coming from a television powerhouse, a strong collection of specialty services that garner big ratings are wildly profitable. Rogers is anything but.

I looked at the financials and I just went "Wow!" The losses at Citytv are staggering; $72 million in 2008 and 2009 and over $110 million since Rogers acquired the stations.

I don't care who you are or how big you are, there is no company that would either endorse or support a business that is losing that much money for that length of time. My direction to our team -- and they have heard it a plethora of times over the last couple of months -- is "We need to change the financial model and we need to do it quickly."

COMMISSIONER LAMARRE: But I do want to point out what seems to me a contradiction between the difficulties you seem to be expressing in how spending money on Canadian programming would put Rogers in a hardship situation and what you have presented this morning.

Page 4 of your presentation you are saying that you built your plan on three issues. And the third one is to build a stronger local presence in our Citytv markets outside of Toronto and you want to make the case that "Citytv everywhere" is in everyone's mind and you want to do it in your Western markets.

Well, that's obviously going to be translated into more expenses in local programming and that's Canadian programming. So you are actually going where we want to take you. So I don't understand why it's such a problem when it's actually what you are trying to do here.

MR. PELLEY: We are simply saying, "This is the reality of our business. This is what we need to be a robust and competitive player in this marketplace".

COMMISSIONER LAMARRE: And going into the business you knew that, like it was not some hidden weird regulation. It's plainly set out in the Broadcasting Act. What you are proposing right now is for the Canadian broadcasting system to actually water down as years go by.

MR. PELLEY: Well, actually, I beg to differ. As our revenue grows and as Malcolm and his team build a stronger US programming schedule that allows for revenues to increase and allows the profitability, that leads us right into spending more money on Canadian.

And God knows, Canadian Artists are all too familiar with the BEEPING sound as the money truck backs up their driveways after every past successful season of simulcasting.

COMMISSIONER PENTEFOUNTAS: So you are asking us to give you a break over the next five years, and at that point you will become good corporate citizens and contribute proper amounts to Canadian content?

MR. PELLEY: I don't like to use the phrase "break"…

COMMISSIONER PENTEFOUNTAS: You are asking us to allow you to become profitable on the back of Canadian programming, and five years down the road we will re-examine the whole issue. My only problem is that -- I heard your opening statement. You know, Rogers is a proud, profitable Canadian company.

MR. PELLEY: Correct.

COMMISSIONER PENTEFOUNTAS: -- that spoke of Canadian Production Expenditure as if they were speaking about the plague. Correct me if I'm mistaken.

MR. PELLEY: No, I think you're -- yes, I believe you are completely mistaken. I believe that our contribution, based on what we have said, is significant. We are talking about $100 million. I think it keeps coming down to we just want to be treated fairly.

Rogers is a powerful company, there's no question. Do we want to produce Canadian content? Yes. And as we grow both financially and grow from a revenue perspective, we will be a massive contributor to the Canadian broadcasting system.

COMMISSIONER PENTEFOUNTAS: Last point. I think you are obviously going to try and grow your revenue on American programming, and, at some point in time we don't need Canadian broadcasters that are simply interested in showing American content. We can go to NBC, CBS, ABC and FOX for that.

That is my point and I would like you -- if you can -- sort of go back, sharpen up those pencils and try and find some creative energy to get some good quality Canadian content on your Rogers channels.

the-borg

Meanwhile, somewhere in the bowels of Corus World Headquarters, there's apparently a little room where everybody gets taken for indoctrination. Y'know where they learn the buzzwords to use as often as possible, even when the situation isn't quite appropriate…

THE CHAIRPERSON: "The licensee shall provide a national English-language specialty television service which provides formal and informal educational programming and learning opportunities that generally focus on adult education. Educational programs will come from the full spectrum of basic, credit-based, skills-related and life-enhancing programs, many of which will be undertaken in cooperation with colleges, universities and training institutions. That doesn't sound like the Oprah Winfrey Network to me.

MR. MAAVARA: Basically what Oprah Winfrey has done -- is show that learning doesn't have to be dull. The exploration of learning can, in fact, be quite entertaining and quite interesting, and on close examination of those programs, that really comes through.

MR. MURPHY: The general theme is: "Live Your Best Life." It's about trying to be life-enhancing, to adopt behaviors that improve your life.

There are three specific programming categories to it, the first of which is "Take Charge of Your Life", and there are a number of experts that help audiences, whether it's removing clutter, improving their sex life, financial coaching.

The second one is "Dream It, Do It", which is more of an aspirational theme of programming that is desired to inspire and to excite the audience.

Finally, third, "Look Beyond Yourself" is really about looking through the lens in terms of what other people's accomplishments are globally. It is our view that this positioning is, indeed, highly learning in its orientation.

"Highly learning" -- I love to listen to really smart people talk. Don't you?

And who knew that a genre as simple as Country music could offer so many ways for Corus to amortize real estate assets, gang tackle a single awards show night and justify unrelated programming instead of, y'know, having to listen to boring old Country music.

COMMISSIONER LAMARRE: Okay. Let's talk about CMT and the requested modification to your conditions of licence. For CMT, your Nature of Service, basically, is focused on country and country-oriented music.

Now, you are also asking us to reduce by half the programming of music video clips. You are asking us to increase by a third what you will be broadcasting in Category 7 (Drama and Comedy). You are also asking us to reduce the overall Canadian content from 60 percent to 50 percent.

So all those changes taken together, exactly how are you going to be able to still respect the fact that you are going to be focused on country and country-oriented music?

MR. MURPHY: The first thing is that at Corus Quay now we have the ability to engage in productions of live music, where we do a broadcast out of Studio 1 in our facility, which goes to air.

So we believe that there is still a way for us to deliver fresh, engaging content of country musicians on CMT, leveraging the investment we have made in Corus Quay, and we will continue to do that in the future. It remains a strong strategy.

We have also invested in a really exciting new piece of technology. It is an online social networking platform called Supernova.com. What it enables bands to do is to upload their auditions into a website scenario wherein our audiences then can go vote on them.

MS COURTEMANCHE: I would just like to add. If we are going to decrease the video flow, I think we have to deal with the issue of whether we are building a country music star system.

We air the Country Music Awards. Prior to airing those awards we air companion specials such as "CMT at the CCMAs." We profile the CCMA artists on the "Chevrolet Cross Country Countdown" program, where the nominated and winning artist videos are aired.

We also assist with the creative writing and booking of acts for CCMAs and we are also a sponsor of CCMA's FanFest, which is an area for fans to gather and connect with the artists during the show.

So we understand. We get it. It's not just about -- you know, we have to do something to help with the country music star system and I can tell you that there are a few country music artists such as Johnny Reid who were going nowhere until we started playing his music on the station.

Robert Johnson

COMMISSIONER LAMARRE: Yes, and I almost forgot, another modification you are asking for is actually a deletion of the requirement that right now no feature films can be broadcast except those for which a country music artist is the key subject or a country music artist is cast in the key performing role.

MR. MURPHY: You know, this is about studying and paying attention to our audiences, and so what we are proposing is that we are still able to tell stories about the values of country music and the country lifestyle. It is very family-focused.

Shaw showed up last. And if you were hoping that the company which used to holler about the lack of popular Canadian programming and how every channel was just a buncha damn repeats was going to shake things up -- well, you'd be wrong…

COMMISSIONER PENTEFOUNTAS: is there a reason why you have dropped by half your Programming of National Interest spending? You are dropping by half in 3.5 years time.

MS WILLIAMS: There was a significant overspend on Showcase for the couple of years where those numbers dropped. We would have been using up that overage which would have reduced, likely, the spend on new content for those years where used up the overspend from previous years.

So that could account for why it was so big for a bit and then much smaller, because we overspent for a couple of years and then brought it back into line to meet ultimately the CPE requirement that we always had to hit. That could be at the root of that.

Is everybody now clear that Canadian networks never spend a penny more on Canadian programming than they have to? And when they mistakenly do, they turn the tap off until the next year comes around.

global today

That's how you sustain an industry and keep your artists working at home, isn't it? But then, Shaw really hopes it won't need that much Canadian programming anyway.

MS BELL: We are asking the Commission to consider specific amendments for three of our specialty licences: Showcase, Slice and TVtropolis. These amendments would grant us greater flexibility to provide Canadians with the best available content, while also ensuring the continued viability of these services.

Currently, US programming is limited to no more than 10 percent of Showcase's overall programming. We are asking to increase that number to 20 percent.

We expect that approval of this amendment would lead to increased revenues, which would in turn increase spending on Canadian content in future years.

Next, we propose an amendment to the licence for Slice which would decrease its Canadian exhibition requirements from 82.5 percent to 60 percent of the broadcast year and evening broadcast period.

Like Showcase and Slice, TVtropolis' financial performance has been negatively impacted by the current conditions of its license, which restrict all scripted television series to those copyrighted at least 10 years prior to the year of broadcast.

We propose amending the condition of license restriction to 50 percent of scripted television series programming. In making this request, we note that such copyright restrictions are based on the myth that older viewers only want to watch older shows. TVtropolis would then be able to attract the demographic it originally set out to serve by scheduling its programming in a manner that better reflects the interest of older viewers.

Meaning, as I'm sure everyone's aware -- more recent reruns.

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And before they left, Shaw made sure the Commission was aware of the new "Death Star" on the horizon…

COMMISSIONER SIMPSON: I am curious, from your perspective as distributors, as well as broadcasters, whether you have figured out whether Netflix is simply a commoditization of content and a pricing game, or is it a niche, a programming niche that we are going to see repeated with sports content and the like?

MR. STEIN: I think the deal with Paramount was a real ground-shaker, in terms of our concerns. Our view on Netflix is that it is providing broadcasting content. It is not Canadian owned or controlled, as per the Broadcasting Act.

I think that one of the big issues for us is one of time, as well. If they continue to make deals, as they have done with Paramount, as they have done with Lionsgate -- if that starts to accelerate -- I mean, their market caps at about $11 billion, so they have a lot of cash to be able to put on the table.

So we are going to have to find some means to deal with it, both in terms of the program rights issue, but also in terms of the tremendous load it is putting on the capacity of the system.

We have dealt with this in the past, both with respect to "death stars" -- I think we called them -- a number of years ago, in terms of the attempts by the US satellite companies to offer services in Canada, and we also dealt with it in terms of the entry of US specialty services, to bring them under the regime.

We had discussions with people across the country about the Canadian broadcasting system. One of the strongest focus groups we had was in Calgary, and one of the comments that was made was: Well, if we don't have a Canadian broadcasting system, all we are going to have is basketball. We are not going to have all the hockey that we want and need.

I also think that we have to make sure that the broadcasting system is Canadian.

Of course, you'll note that Shaw's definition of a Canadian broadcasting system is one on which most of the content is not Canadian.

And at that point Shaw's representative got on a roll about how REALLY SCARY things are about to get:

MR. ROBERTSON: I just tend to look at it and feel that they do what would seem logical: you start with a library, you move to original content, you knock out as early a window as you can possibly get a hold of, which is happening right now, and then you start making the move into live sports and news.

ABC would do it, and we would do it, and that's what you do. I would just presume that's where they are headed. I don't think they are painting any kind of a box that they are going to be comfortable staying inside.

We almost tried to talk ourselves into that when they were doing library only, but it didn't take long for us to be reconditioned that they are -- you know, they are on their way up the quality curve.

Anybody know where I can get a Grey Market Internet connection? Because as soon as Netflix goes down, they'll be going after Roku and GoogleTV and AppleTV and Youtube and -- well, pretty much anybody who offers something you used to get on television but don't have to anymore.

And, of course, most of the money Shaw earns by keeping the competition out will go to funding Canadian programming.

Excuse me. But I think it's time to walk into traffic.

5 comments:

Sandy Crawley said...

Keep them cards and letters coming in , Jim. Ooops, I'm quoting Dean Martin...not PC...

Sandy Crawley said...

Well put!

Joe Clark said...

Can you please stop using fake-o bold and coloured text and learn to use CSS, please? Your posts are unreadable in an RSS reader and other scenarios where the background colour, which you think is immutable, disappears.

(And actually, your use of bold suggests your system – Windows XP with ClearType turned off? – makes letters with single-pixel stems hard for you to read. But there I’ve made the mistake of offering informed advice, whereas I gather it’s a matter of pride for you to do things the wrong way and use the wrong solution to a misidentified problem.)

Clint Johnson said...

Keep in mind that this is standard operating procedure for ALL government regulatory proceedings. The lack of knowledge and experience of the regulators is used by the industry stakeholders to twist and distort the rules to their own needs while asserting that it is all being done in the best interests of the country at large.

When the CRTC can move billions of dollars into and out of bank accounts with the stroke of a pen, there is no way that the industry can avoid manipulating it.

I am pretty sure that not much is actually decided at these hearing, not even the in-camera portions. I would bet that it is decided over lunches and in backroom meetings that we never hear about.

If you really want a corporate oligarchy, all you need to do is create a highly regulated industry.

Research said...

Now that our major broadcast networks are owned by cable/satellite companies, isn't it about time for this idea:

http://www.friends.ca/news-item/590

It could lead to our system becoming truly Canadian.

BTW, I am amazed that your posts are always letter perfect. Every second article in the major papers, including the Globe, has typos or grammatical errors, etc., yet your posts seem to me to be 100% accurate. There's some pressure for you.