(Winnipeg - March 3, 2009) Canwest Global Communications Corp (“Canwest” or the “Company”) said its conventional television licence renewal application reflects the country’s outdated regulatory environment and the challenges of the current marketplace on the sector.
The one year application made public today by the Canadian Radio-television and Telecommunications Commission (CRTC), seeks standardized minimum local programming obligations of Canwest stations of 10 hours per week in markets of over one million people and 5 hours per week in smaller markets. It also calls for the elimination of “priority” programming obligations in “prime time,” thereby allowing broadcasters more flexibility to generate revenues, and increased access to the Local Programming Improvement Fund by all local and regional stations.
“While we are maintaining the existing levels of Canadian content, we are seeking more flexibility to respond to viewers’ tastes,” Charlotte Bell, Canwest Senior Vice President, Regulatory Affairs said. “We have had to make some very difficult decisions because, while the CRTC itself has acknowledged that the system is broken, it has, so far, rejected the solutions we tabled last year that would have provided stable revenues and ensured Canadians continued to receive more drama, local news and information.”
In 2008, and for many years preceding, Canwest told the CRTC that the conventional television model was broken and that the regulatory environment needed to change. Earlier this month, the CRTC released data showing precipitous declines in the 2008 fiscal year financial results for conventional television. Since then, the outlook has worsened. All major broadcasters in Canada and the U.S. have had to write down the value of their assets. Companies will not invest further in local television and certain other kinds of content unless the structural impediments to success are addressed. Canwest, in particular, has put five stations up for sale and CTV have said that they will allow smaller stations to close.
“We currently produce about 355 hours of local programming every week and lose money doing it,” Ms. Bell said. “Meanwhile, cable and satellite companies take our signals and sell them to the consumer without providing us any compensation. They essentially have monopoly status, free from domestic and foreign competition, and are subsidized as both distributors and competitors in television.’’
She added: “We know how valuable local programming and particularly local newscasts are to people but without compensation for our product, we are simply not able to produce the same level of local content. We’re trying to make sure this kind of commitment continues by asking cable and satellite operators, who charge consumers for this programming, to pay their fair share.”
Ms. Bell pointed out that cable and satellite operators are willing to pay U.S. channels like Spike or American Movie Classics almost $300 million in subscription fees each year even though they provide no local programming and create no jobs in Canada. However, they won’t pay local Canadian broadcasters for the carriage of their signals and the CRTC has allowed this to occur.
She said that Canwest believes that developing local content is a central part of the Canadian broadcasting system. She added however that broadcaster obligations must be commensurate with their ability to provide such programming and their revenue opportunities should not be unfairly limited, as they are today.
“The U.S., in particular, imposes no local programming obligations yet provides a regulatory environment in which broadcasters are now starting to receive a subscription fee,’’ Ms. Bell said. ‘’This is hardly revolutionary and we believe the time has come for Canada to implement a similar measure.”
Ms. Bell said the Canwest licence application reflects market minimums for local content and that more local programming could be produced in stations where there is sufficient viewer and advertiser support, and if there were some financial recognition for local Canadian broadcasters.
She added that Canwest will oppose a CRTC a proposal that could require broadcasters to ensure that for every $1 spent on non-Canadian programs, $1 is spent on Canadian programming. She said this change would not only significantly increase costs but also ignores the fact that profits from popular foreign programming effectively subsidize Canadian programming. The public hearings will take place in April this year.
About Canwest Global Communications Corp.
Canwest Global Communications Corp. (www.canwest.com), (TSX: CGS and CGS.A,) an international media company, is Canada’s largest media company. In addition to owning the Global Television Network, Canwest is Canada’s largest publisher of English language daily newspapers and owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, web sites, radio stations and networks in Canada, New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and the United States.
-30-
For further information:
Media Contact:
John Douglas, Vice President, Public Affairs
Tel: (204) 953-7737
jdouglas@canwest.com
|
