#34 – Why broadcasters want our money.

Canada’s English language television networks are launching their own television campaign to demand they be paid what are called ‘fees for carriage’ by cable and satellite dish TV providers. These fees are to be paid to local stations for carrying the local station’s signal. These are the channels that the cable companies originally picked up from their own television antennas and fed into their customers’ homes.

Fees for carriage only came into existence for channels that cannot be received with a television antenna. Channels such as the History Channel and Arts & Entertainment are a good example of channels that are not sent over the air but are fed by satellite to cable and dish resellers throughout North America. Instead of using just advertising revenue, these channels are paid a fixed fee for each cable or dish customer who includes that channel in their package.

The cable and satellite television companies have provided an important service to local broadcasters even though the customer did not necessarily need the intermediary to deliver the signals.  What they did was eliminate the rooftop antennas and improved the television signal quality to viewers. By the time the Canadian Radio-television Telecommunications Commission (CRTC) got around to regulating these resellers, the CRTC demanded that all local stations be included in their basic service.

It seems the television networks missed something in their capitalism 101 classes. It seems clear to most of us that if you are lucky enough to be awarded a broadcasting licence for a commercial television station, you become rich. It is that simple. How could the television networks get it wrong?

Realizing, of course, that there are good times and bad times and this might not be a really good time, did they hear about what Moses told the Pharaoh? In fat years you set aside something for the thin years. Did someone promise CTV and Global that there would only be fat years for them? Do they think they do not need to heed Moses’ good advice?

While back in Moses’ time, he would not be aware of how commercial television makes its money, it would be very easy to explain to him. It centres around the camel dealer who wants to let people know about the low prices and high quality of his camels. He talks to the representative of the television station and asks for a good prime time buy for his commercials to reach potential customers. In exchange for an appropriate number of shekels per thousand viewers, a deal is made. Moses would have no problem understanding that the television station makes money by providing an audience for the camel dealer’s commercials.

And that is why an exception is made for the CBC in this story. The CBC is somewhat restricted in the commercial time it can sell and the publicly owned network sets higher standards than the really commercial broadcasters. And that is why CTV and others are always sniping at the CBC. They just do not like that holier than thou attitude from the public broadcaster.

But the CBC is going along with its fellow broadcasters in this circumstance. This is not because the CBC brass all want to be one with the boys but because it will take revenue wherever it sees an opportunity. With the current government slashing funds to the CBC every chance it gets, the CBC is getting a bit desperate. Carriage fees can help the CBC as well as the other networks.

But the problem is that carriage fees have to come from somewhere. There is no magic money tree around where we can go and pick up a few shekels. The cable and satellite dish people have made it very clear that if the CRTC legislates that there will be fees for carriage, it will be the cable and dish users who will pay. That is you and I folks! On top of outrageous fees, terrible service and autocratic billing from the cable and satellite dish providers, they will expect us to pay even more for channels that we might not want.

And that is the rub. We are talking here about a fee for channels that are mandated by the CRTC to be provided. As a customer, you have no choice: you have to take those channels. It ‘s not like Arts & Entertainment and the History Channel where you might buy one but not the other. You can now contribute to the cost, for example, of your local CTV news—an endless round of self-aggrandizing promotions of CTV shows and personnel wrapped around clips about the latest teenage murder.

Babel used to have a local channel but now one can argue that it is just an estranged appendage of the Toronto CTV station. It is sort of like an ex-wife to whom you owe alimony. This is the one that the silly local MP has been touting at his voters’ expense on behalf of CTV . This channel ran a program that built a strong and faithful audience over its first few seasons. Surprise, surprise, that program is now on the Toronto CTV station’s listing and the Babel station gets more old reruns. Did we mention that CTV owns our local station?

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