Mediacheck

Those TV Ads Where TV Companies Bash TV Companies

What's that about? Welcome to the 'fee for carriage' fight, and how to solve it.

By Michael Geist, 3 Nov 2009, TheTyee.ca

Godzilla vs Gorilla

Settle it by giving consumers a choice.

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For the past two months, Canadians have been subjected to a non-stop marketing campaign pitting two deep-pocketed industries -- broadcasters and broadcast distributors -- against each other. Television and radio commercials, full-page newspaper advertisements, websites and Twitter posts all seek to convince the public that new fees for local television signals are, depending on your perspective, either a TV tax or crucial funding to save local television.

Broadcasters claim some local TV stations will close if they do not receive millions in additional fees from cable and satellite companies as compensation for distributing their signal. Cable and satellite companies leave little doubt they will pass along any new fees -- possibly as much as $10 per month per subscriber -- to their customers. The additional fees inevitably will not come from the bottom lines of cable and satellite companies, but rather from the pockets of consumers.

While the reaction for many Canadians might be sensibly to tune out the entire mess (yesterday was the deadline for comments), politicians and regulators will still be left seeking a solution. In fact, some politicians have pledged to support local television, but also promised to avoid new consumer costs. Can these two positions be reconciled?

Perhaps.

Consumer choice is key

The answer may lie in giving consumers more choice, by allowing them to pay only for the channels they want -- regardless of whether they are local, foreign, or specialty (such as CNN or movie networks).

A full "a la carte" model would require three steps. First, exclude public broadcasters from the issue altogether. The CBC argues it is also entitled to fee-for-carriage compensation, yet that runs counter to the very notion of a public broadcaster. The public has already paid for the broadcasts and should not be asked to pay again. Public broadcasters should instead form a new basic tier for cable and satellite providers that would be considerably cheaper since it would only include channels for which no fees are attached.

Second, make all remaining channels -- local, foreign, and specialty -- optional for consumers. Groups of channels can still be packaged to offer better value (sports, movie, local channel, or U.S. channel packages), but the crucial difference from the current system would be that Canadian consumers would get to decide what channels they want to pay for.

Third, institute a fee-for-carriage system so private broadcasters are compensated for their local signals where consumers choose to subscribe. If Canadians are really concerned with their local television, they will subscribe and the broadcasters will be the beneficiaries. If the Canadian broadcasters are wrong, however, they lose both compensation and mandatory carriage.

More Canadian stuff from Canadian broadcasters

Such a system should meet everyone's needs. Politicians succeed in getting local television stations fees for their signal without forcing consumers who don't want the channels to pay for them. Consumers gain much-needed control over their cable bills so that they are not forced to pay new fees for signals they don't want. Broadcasters get their long sought-after fee-for-carriage model.

Moreover, this approach fosters incentives for broadcasters to invest in local news and original programming. Strategies based on simply licensing popular U.S. content will become less effective as consumers anxious to view those programs subscribe to the U.S. channels rather than the Canadian simulcast.

Adopting a genuine choice model would undoubtedly represent a dramatic shift in Canadian broadcast policy that has long featured must-carry obligations for Canadian broadcasters. Yet it is the broadcasters themselves that argue for a new paradigm. A system that matches fee-for-carriage with consumer choice may best reflect the needs of a television universe scarcely imagined when the Broadcasting Act was first drafted. [Tyee]

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. His column on digital media runs every Tuesday in The Tyee. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

13 Comments:

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  • OilbertaRedTory

    2 years ago

    Reinventing the CBC ; Canadian Broadband Corp

    ... following the example of PM Rudd in Australia :

    http://www.minister.dbcde.gov.au/media/media_releases/2009/022

  • Dan the socialist

    2 years ago

    Some of those ads are

    Some of those ads are hilarious especially the Cowboy guy singing and the one with the cows.

    I dunno. I am not on any side as consumers will pay no matter who wins anyway.

    But since CBC, CTV, Global etc are must carry and cable has no choice but to carry them, they should not have to pay the broadcasters unless that must carry rule is removed and if cable companies want to carry them then they can and pay.

    Look at Canwest Global and how it has been run into the ground since Izzy passed on, why should they get anymore money for being incompetent? It is akin to putting your finger in a leaky dam. Global here shows 7.5 hours of recycled news plus 2 repeats of ET Canada and other than 100 Huntley street they have US soaps, talk shows and US programming during prime time (8-11), maybe if they showed Canadian programming other than news, ET Canada, 100 Huntley street I would feel for them, but Global is bankrupt and poorly run and giving them more money won't fix them or create new programming. They can't even afford to buy US programming anymore either and some studios demanding pre payment. CTV ain't much different.

    But the bigger issue is media like TV and newspapers have not realized it is 2009. The internet has hurt many newspapers and TV networks and is taking a lot of advertising from traditional media that traditional media (TV, Radio, newspapers) will never get back. Governments, cable companies, consumers can keep throwing money at them but it won't help in the long run. There are so many places to view and download TV shows, you can buy them cheap from I Tunes with no commercials so I do not see TV's fortunes improving anytime soon. The traditional media needs an overhaul.

    Like I said I am not taking sides as I know full well no matter who wins my cable bill will be going up again. It went up last September and will again in July with HST. I am almost ready to cut cable but I like watching the soccer games on the weekends and I am not allowed to pick the 4 channels I want, but have to pay like everyone else for a bunch of channels we may not necessarily want in order to get the few we want.

    Once Canada gets with the programme and has real hi speed like the rest of the world it will be easier to watch live streaming and I will say bye bye to Cable.

  • Skywalker

    2 years ago

    I agree

    Give consumers a choice of which channels they want to pay for.

  • mikev

    2 years ago

    yeah that's going to happen

    Who wouldn't like to pick which individual channels they pay for? I would be happy if my total cable bill went up for my current channels, if I could knock it way down by cutting the cruft. Sure a bunch of channels would basically go immediately bankrupt, but the remaining ones would be swimming in a smaller pool and so become stronger. Plus I think it's obvious that there is a bit too much variety right now - have you seen some of the shows on the air?? What did Pink Floyd say?

    I've got a little black book with my poems in
    I've got a bag with a toothbrush and a comb in
    When I'm a good dog they sometimes throw me a bone in
    I got elastic bands keeping my shoes on
    Got those swollen hand blues.
    Got thirteen channels of shit on the T.V. to choose from
    I've got electric light
    And I've got second sight
    I've got amazing powers of observation
    And that is how I know
    When I try to get through
    On the telephone to you
    There'll be nobody home
    I've got the obligatory Hendrix perm
    And I've got the inevitable pinhole burns
    All down the front of my favorite satin shirt
    I've got nicotine stains on my fingers
    I've got a silver spoon on a chain
    I've got a grand piano to prop up my mortal remains
    I've got wild staring eyes
    I've got a strong urge to fly
    But I've got nowhere to fly to
    Ooooh Babe when I pick up the phone
    There's still nobody home
    I've got a pair of Gohills boots
    And I've got fading roots.

    Perfectly sensible idea. And so doomed to never see the light of day :(

  • gguppy

    2 years ago

    Return to basics

    Let's go back to the original concept that formed the foundation of cable television. That is the "Community Antenna TV" (CATV) model where a greater audience had access to a broader range of television stations from a cental antenna located where signals were best. CATV systems also broadened the audience base for advertiser supported TV stations; never did suggest the TV station pay for the operating cost of the system, but passed the operating costs onto the system subscribers.

    Subscribers' benefited by receiving a broader range of entertainment and got rid of the cost of maintaining expensive roof-top antenna arrays.

    All were winners.

    Non-commercial channels are different issue. The end viewer is expected and should expect, to pay the cost of production and carriage, but in return need to be able to opt out of receiving.

    If the subscriber is expected to pay for otherwise "free" commercial supported channels, including the CBC, then we should have the option to pick the ones we want to pay for.

    The commercial, advertiser supported, industry is foolish to try to tap into the cable/satellite operators revenue stream with likely more than 90% of their viewers signal source coming through CATV/ satellite. They may find their audience dramatically reduced as CATV and Satellite provides opt out of carrying marginal commercial stations.

  • coldmoon

    2 years ago

    paying for CBC?

    Quote: "Public broadcasters should instead form a new basic tier for cable and satellite providers that would be considerably cheaper since it would only include channels for which no fees are attached."

    I was under the impression part of CBC's mandate was that it was supposed to be available free of charge to Canadians...or has that changed?

  • freebear

    2 years ago

    Arguing over who gets to tax the viewer!

    At some point people will say f..k it and just get high speed internet only and use the TV for video games and commercial free movies!

  • catspajamas

    2 years ago

    Every time I see one of those ads ...

    ... I become more and more convinced I could do without TV altogether.

  • frank2

    2 years ago

    There are two major

    There are two major problems: (1) how to finance real news gathering and analysis when the advertising model seems to be failing in print media and radio/TV. Some form of payment is the answer, whether thru taxes or for specific content or channels. (2) How to minimise the opportunities for the channels (cable) to use their monopoly power to cut costs to the bone on the one hand, and extract the maximum $ from viewers on the other. I'd dearly like to see some really hard thought given on how to ensure these channels operate in the public interest as public utiities....except that the current trend is to emasculate utilities according to the endlessly parrotted (but totally unproven) doctrine that "competition," supported by technological progress, will ensure the best outcome for citizen consumers and producers, with minimal intervention by the public (government).

  • Frank

    2 years ago

    frank2

    Frankly, I'm happy that the advertising model is failing. I don't think our news people should have any concern about selling adverting while they're putting their reports together. Let's face it, the corporate sector couldn't ask for a better system.

    Looking at the mess the private sector has made of it I don't see why news gathering shouldn't be publicly owned and commercial free.

  • ME2

    2 years ago

    No more all-day-sucker TV.

    Paying a cable charge for programming that advertisers have aleady paid for makes no sense to me, esp when half the viewing time is advertising. We forget that we've already paid for their costs in the products we buy. Perhaps programming might improve if advertisers had to pay the distributor for the full cost of delivery.

    ALL kinds of pay-for-view programming should be resticted to election and religious material.

  • alive

    2 years ago

    why, ohh why?

    I was perfectly happy installing an antennae once and for all, and never dream of paying anyone for viewing whatever was available.
    But commercialism managed to find a way to make me pay for what once was for free.
    Now they want even more money?
    I did not ask for theatre quality and any other fancy ideas, just a system to keep in touch with the world, say like a radio does?
    But of course they have also "invented" ways to make people pay for listening to radio programs.
    My question is: why do people sign up in droves for anything that simply is gimmick to milk them for more money?
    If people had refused to go for cable, then every building may have sprouted a common antennae and no fancy company would dictate how much you had to pay.

  • slim

    2 years ago

    No one should pay for manditory channels

    If the local channels are mandatory on the cable/satellite line-up, then the cable/satellite companies and consumers should not have to pay extra for them.

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