Tories Can't Focus on CBC
After the Conservatives won power in last January's election, the television business held its collective breath. Insiders assumed change was coming. The days of Liberal emphasis on supporting the CBC and funding worthy Canadian shows above all else were surely numbered. Many in the industry anticipated a new focus on shoring up the private TV marketplace, and leaving it more to viewers to decide what programs were made and broadcast. Prime Minister Stephen HARPER stoked expectations by putting Bev Oda in charge of the file as his heritage minister. Before she jumped into politics as a Tory in 2004, her career for three decades was mainly in private broadcasting, leaving few in doubt about where her sympathies lay.
Since then, though, there's been a lot of dead air. Despite her broadcasting background, Oda turned out to be an ever cautious, often elusive, sometimes invisible minister. She was widely expected to launch a sweeping rethink of the CBC's mandate last spring. Instead, she has put off the review indefinitely - leaving more than just the public broadcaster hanging. Since the CBC is such a dominant factor in federal TV policy, Ottawa's approach to it tends to shape its policy for private broadcasters, too. But an industry adjusting to intensifying competition and a blur of technological change is showing signs of refusing to stand still and wait for a government that looks uncertain of how or when it wants to move.
Two big cable companies have taken the unprecedented step of withholding their mandatory multi-million-dollar contributions to the Canadian Television Fund. It's the first serious test of the Tories' willingness to forge new policy - or defend what they inherited from the Liberals. Shaw Communications and Groupe Vidéotron share an annoyance over the fact that the government requires 37 per cent of the CTF's roughly $250-million annual budget to go to produce shows that air on the CBC. The fund finances Canadian productions that broadcasters plan to air in prime time, especially comedy, drama and documentary shows. But David Taras, a University of Calgary communications professor and federal policy expert, says this protest signals more than a narrow objection from private media corporations about funding the public broadcaster's priorities. "Their world has been shaken by extraordinary changes and new technology," Taras says. "I think they are desperate."
The causes of that desperation are clear enough to anyone with access to the Internet, an iPod, or a sophisticated cellphone. Technology watchers point to the sudden rise of YouTube as the first major indication of how rapidly new ways to watch shows on computers will explode in the next few years. Downloading programs to mobile devices is another worrying development for companies that rely on eyeballs trained on traditional TV screens. But if cutting-edge Internet and hand-held options for accessing TV-style entertainment and information are quickly carving out their niches, so far they contribute far less to the conventional broadcasting industry's worries than good old multi-channel market fragmentation.
Consider what's happened since the CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION, the federal regulator, last overhauled its TV strategy in 1999. In the following five years, the CRTC licensed more than 100 new digital specialty channels, along with 59 more satellite services, bringing the number of foreign satellite channels to more than 100. As well, it approved 17 pay, pay-per-view and video-on-demand services. The predictable result: the viewing share commanded by conventional channels steadily declined, to 41 per cent in 2004-05, from 47 per cent in 1998-99. Over the same period, specialty services boosted their share of viewership to 36 per cent from 23 per cent.
So advertising and distribution revenue is being divided among more players, at the same time that growth is migrating to the Internet. For Shaw and Vidéotron, along with just about any other established player in any branch of the broadcasting business, that means the whole business model is in flux. Seen in that unsettling context, the $65 million the two cable companies are withholding from the Canadian Television Fund is just part of a much bigger high-stakes game. "The CTF is a piece they can put on the chessboard and move around a bit," Taras says. "But everything has to be rethought."
In fact, everything has been rethought, and repeatedly. Along with many studies by industry groups and independent media gurus, there have been sweeping overviews like the CRTC's 1999 document "Building on Success - A Policy Framework for Canadian Television," and an ambitious report on broadcasting issued by the House heritage committee back in 2003. Carefully considered recommendations have often been ignored or outstripped by technological change. Many experts say settling key questions about the CBC's future is unavoidable as the starting point for trying again to update Ottawa's strategy.
And the heritage minister apparently agrees. In an interview, Oda said she was open to hearing more from Shaw and Vidéotron, particularly about why they object to such a large slice of CTF funding being earmarked for independent producers making shows for the CBC. But Oda added that any rational discussion of how much money the CBC needs depends on a common understanding of what the public broadcaster is supposed to try to accomplish. "Logic says it's a public broadcaster that gets direct public funding, and access to mechanisms such as the CTF," she said, "and consequently, a mandate review has to determine, first of all, what Canadians want the public broadcaster to do."
Sounds sensible. So Oda must be preparing to announce that review, right? Maybe, maybe not. She told Maclean's "the final decision hasn't been made by the government as to the approach it wants to take." Frustrated by the long wait for Oda - and Harper - to take charge, the House heritage committee has launched its own hearings into the CBC's future. The committee held a meeting on Tuesday to plan the study, and MPs from both the government and opposition agreed to try to issue a report by June. Oda said she welcomes the initiative, but wouldn't say how it might influence the separate CBC review that she hasn't ruled out ordering. "I can't say whether it would be parallel, simultaneous, prior, or following [the committee's work]," she said.
On the CTF dispute, Oda met late Tuesday with representatives of the cable companies required to support the fund. Her position going in was nuanced. On one hand, she said Shaw and Vidéotron are bound by regulations, like their competitors, to contribute five per cent of their revenues to the CTF. On the other, she made a point of noting that the requirement for 37 per cent of CTF money to support CBC shows "was established by the previous government." Asked if she thought that figure was reasonable, she said, "I can't say if it's fair or not."
As usual, Oda was leaving plenty of room for speculation. Is this government cautiously supporting the status quo on broadcasting, including the CBC, or just as cautiously looking for openings to adjust TV policy? Defenders of the system for supporting Canadian independent TV production are manning the barricades. "We're not talking about a whole lot of stories about Manhattan," said Douglas Barrett, the CTF chair, about the TV shows his fund backs. "We're talking about a little mosque, and a corner gas station, and a trailer park, all of which are very specific and very well-received by Canadian audiences who love them." How much they are loved by Bev Oda and the rest of the Harper government, though, remains to be seen.
Maclean's February 12, 2007