Friday, October 30, 2009

Local TV Matters vs. Stop the TV Tax

Can't decide whether to save local TV or stop the TV tax?

That might be because both sides are broadcasting ambiguous messages.

I think we can all agree that local TV matters. Local news is where we get information about the things, people and institutions that surround us. Local entertainment programming allows talented Canadian individuals to shine, whether it's in front of the camera or behind the scenes. Local TV gives us, the locals, a platform to express our thoughts and ideas about the things that matter to us.

And yet, we can't help but agree with some of the rebuttal from the Stop the TV tax campaign. With the Local TV Matters campaign constantly reminding us of the November 2 deadline to help save local TV, I thought now would be a perfect time to put the arguments from both sides head-to-head.

So here goes.

1. "Why don't cable and satellite providers already pay for local television signals?" & "What is 'Negotiation for Value'?" vs. "Cable companies steal local television signals, then sell them to customers" & "The big networks deserve to be paid for their television signals"

Yes, it's true. Cable and satellite providers don't pay for local TV signals. But this has always been the case, mostly because TV started as an over-the-air broadcast, meaning anyone who was able to capture the signal (Oh hello, bunny ears!) had access to the content. However, most of that content was created locally or at least, somewhere locally across that network. These days, local programming consists mostly of news and current affairs shows, and even that's put together with a national perspective. The rest of the content is purchased from distributors, whether it's documentary, reality TV or entertainment production company. And we've seen an increase in the American-based content being purchased to air on our local stations.

Yes, broadcasters deserve to receive some sort of payment for the content they provide, because it then provides added value to the cable companies that distribute said content. For example, the only channel in Canada where you can catch Dexter is The Movie Network. If Rogers were to have the exclusive carriage of The Movie Network, and Dexter was your favourite show (and assuming you're not one to download TV shows or stream online), you would probably opt for a Rogers cable package instead of the other cable companies' offering.

Cable companies pay for specialty TV stations. Obviously, they must see some value in their investment. Do they not believe that local TV is as valuable? They carry the channels, so clearly, they must think they have some value. And please, don't use the "over-the-air" excuse. Times have changed. All TV signals will be digital only by August 2011, so no one will be able to capture those old analogue signals.

Conclusion: Cable companies get free content from the broadcasters (who pay for theirs) and should pay up.
Cable distributors should have to purchase the rights to carry a station. This would then provide additional funding for local producers and talent to get paid by local stations for producing original content that's relevant to the local community.

2. "Why are Canada's television broadcasters concerned about the future of local television?" & "Why don't broadcasters just invest more in local programming?" vs. "Canada's big networks invest heavily in local programming" & "the new tax will prevent closure of local stations" & "Cable and satellite providers do not believe in local television"

This is a tough one. Both sides are right. Both sides are also wrong.

Canada's television broadcasters already invest heavily in local programming, including Rogers, also a distributor. The problem is that local programming is so much more expensive than ready-made, produced-elsewhere (or nationally) programming: no HR, no production assistants, no insurance fees or crew salaries... The production expenses add up quickly. As for local news? It takes staff to put together the stories you want to hear. All the recent cuts mostly affect local stations, who see their workload remain the same (or sometimes increase!), while having less resources to reach the targets set by their networks. Something's gotta give.

Yet, there is no assurance than any additional fees given to broadcasters will be distributed to local stations. I'm sure it will trickle down in the long run, but on a day-to-day level, nothing's going to change for the hard-working staff in your local newsrooms. There won't be any innovative new programmes. No additional young doc-makers will see their footage to air.

Local broadcasters say they will negotiate with the CRTC exactly how much should be spent where. But if the goal of this fee is to save local TV, shouldn't local TV get all the money? Ah, bureaucracy!

Meanwhile, cable and satellite providers will simply pass on the additional costs to me and to you, the customers. And don't forget the taxes. At least the providers are being honest... They have no intention of actually paying for the local programming, if they're ordered to pay up by the CRTC. They will simply charge us again, which means we will be paying for the same content twice. And they say they truly care about offering us local programming. How underhanded!

Rogers is the only cable provider that is also a broadcaster. Yes, they care about local TV and air regional programming, which makes all of this even more odd, as they might actually save from not having to pay themselves for local TV programming, while all the other providers will pay them for the programming they say they produce anyway. They have nothing to lose! Even after paying for other local stations. If anything, they'd simply break even.

Conclusion: The CRTC must order the fee to be payed directly by the cable and satellite distributors and minutely monitor how the networks invest it in local TV. Do your job and regulate already!
The CRTC should not only order cable and satellite distributors to pay up for local content, they should make it illegal for them to pass this fee along to their customers or hike up their fees without valid reason in order to weasel out of paying for the product they provide. Also, the networks should be forced to spend this new income on local programming and should have to prove it by an annual audit of their financial records, showing that each and every cent collected was actually spent on producing local TV, whether it's on additional crew salaries, purchasing a locally-made documentary, or buying new cameras for the newsroom.

3. "I've noticed in the news that some people have referred to the issue as broadcasters wanting a bailout. Is this true?" & "Why can't broadcasters use the profits from their specialty stations to support local conventional stations?" vs. "Cable and satellite distributors earn billions in profits, but broadcasters are going broke" & "Cable and satellite providers pocket 70% of your bill" & "This is a 'one-time' fee to support local television to help them cope with lower advertising revenues"

First of all, the networks aren't claiming that this is a one-time fee, so you can take that one off your myth list. Nice try, though.

Guess what? Some broadcasters do want a bailout! (ahem, Canwest?). But this has nothing to do with the current discussion, which was a long time coming. Broadcasters are going broke, it's true, and that's a whole other discussion and a complicated one at that. You can't compare public and private broadcasters, for one. CBC's issue is that it doesn't get enough funding and isn't allowed to take advantage of all the advertising opportunities that other networks have. Of course, advertising is not working out so well for the private broadcasters either. Still, a business is a business and as much as media and journalism is important to the proper functioning of a society, you've got to take your responsibilities and own up to your failures. If you can't balance the books, you shouldn't be running a business.

However, the fees paid by the cable and satellite companies would contribute to turning the reds into blacks, and it's only fair to get paid for your work. Advertising alone no longer supports the costs of running a media company, and the free online content customers demand also comes at a cost to the broadcasters. Similarly, specialty stations make enough profit to be self-sustainable and more, but not enough to sustain sister conventional stations. And as always, you've got to consider the administrative costs too.

The cable and satellite companies claim that they're not as rich as the networks would make it seem and make most of their money from other ventures, namely as internet providers. And they charge us, the customers, disproportionately large sums of money for those services too. Sure, less than 6% goes to profits, but they're still taking that claimed 70% off our bills to pay for their expenses. Oh, and that "tiny 1%" profit they make is based on millions of dollars and ends up being not so tiny. They're not the victims here. Neither side is.

Conclusion: Suck it up and stop playing dead. Both of you.
The fact is that the cable television industry is reinventing itself and there will be tough times, especially in a harsh economical climate. The cable and satellite companies are trying to shy away from a change that should have been imposed ages ago, but because of the CRTC's poor understanding of the new face of the industry, they've managed to escape unscathed until now.

This so-called tax isn't a magical solution. It won't fix anything, but it might patch things up enough for local TV to re-invent itself successfully.... if the networks actually commit to it and listen to what the local community wants from its local stations.

Throughout this campaign, Local TV Matters and Stop the TV Tax have acted like rivaling siblings who will pick a fight about anything and everything just because. They're running to mom (aka the CRTC) at every twist and turn, wanting to be proclaimed the winner.

Well, guess what? No one's right, and no one's wrong. Stop bickering and whining and start getting along. The real issue here is mom, who is in serious need of parenting classes.

The CRTC needs to emerge from the dark ages, look around, and realize that the world is different, but that's okay. It needs to come to terms with the past and understand the present so it can properly plan for the future. Hip hop might not be its favourite musical styling, but that's what the kids are into these days. Like a good parent, it needs to accept its children's differences and that their modern world is different from its own experience. The CRTC needs to force the television broadcasters and the cable and satellite providers to work together and create a broadcasting environment that is truly the best for all Canadians.

So let's all agree that local TV matters, and stop the TV tax from being another completely irrelevant and mostly ineffective CRTC decision.

Stay tuned...


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Naila J. said...

Hey David,

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