The following is note to CTV staff about the “deteriorating health” of conventional TV, sent Friday by Ivan Fecan, President and Chief Executive Officer, CTVglobemedia; Chief Executive Officer, CTV Inc.
Earlier this week, CTV filed applications for the renewal of most of our conventional (local television) broadcast licences, which expire at the end of August. In the next few days our applications, along with those of Canwest and Rogers, will be made public by the CRTC. Before that, I think it is important to inform you first.
As you already know, we are not renewing the licences of CKX-TV Brandon, and the ‘A’ stations in Wingham and Windsor. We are also not renewing some 45 rebroadcasting transmitters, which primarily carry the CTV service. These are in areas of the country where over the air broadcasting is just no longer economical.
In terms of our CTV stations and the remaining ‘A’ stations, we have asked only for a short term one year renewal, as the CRTC has announced they will begin a new process looking into the crisis in conventional television later this year.
We have been alerting the CRTC to the deteriorating health of conventional TV for several years. Needless to say, the recession has not helped matters and has, in fact, accelerated the decline. This year, we will lose a significant amount of money in conventional. Our specialty business, with its two sources of revenue (ads and subscriber fees) is not immune to the forces of fragmentation as well as the recession. But it is holding its own, in part as a result of the spending cuts we made in November.
“the situation with the CTV stations is alarming, the situation with the ‘A’s is grave”
However, if the situation with the CTV stations is alarming, the situation with the ‘A’s is grave.
When we bought the A’s, they had never made money. We hoped to turn this around and this year achieved a major increase in their ratings. Despite this, the A’s will continue to lose money. This is not the fault of our hard working and dedicated employees who work at our ‘A’ stations across the country. It is because the business model for conventional television is now broken.
What can we do?
Starting immediately, we will be looking at stop gap measures to reduce costs at the ‘A’s. These changes are not aimed at solving the big issues of conventional. We’re merely trying to keep the ‘A’s open until regulatory restructuring for the entire sector can take place. While we welcome this new, year-long CRTC process and while we can’t guarantee the survival of the ‘A’s until that time, together we will do our best.
We are a private broadcaster. We are not the CBC. We are here because we make a profit from the service we provide. Each unit of our Company has to contribute in some way.
In the long term, we believe the only real solution to the crisis in conventional is fee-for-carriage, which American broadcasters have been negotiating and are now beginning to receive.
Local television provides a service to our viewers. We know viewers value our local stations highly. In fact, most actually think they are already paying for their local service. The cable and satellite companies have opposed such a fee saying that it would be wrong to raise rates for no additional service. Ironically, since making this argument, all major cable and satellite distributors in the country have raised their subscription rates, while providing no additional service.
These are tough times for all Canadian businesses, but those of us who work in the broadcasting sector are feeling the effects of both our own unique issues and the recession.
It is important for every employee in our TV division to understand these issues. That’s why as of today, we are taking the step of posting our application overview on our website, www.ctv.ca so you can see our challenges for yourselves. It contains a full discussion of the issues affecting conventional TV.
Ivan Fecan
