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THE CANADIAN ASSOCIATION OF BROADCASTERS
AT THE NATIONAL PRESS CLUB
OTTAWA, OCTOBER 24, 2001

For full text see: http://www.cabacr.ca/english/newsroom/record/business_cancon_oct2401.html

Keynote Speaker  Michael McCabe, President and CEO of the Canadian Association of Broadcasters

CANADIAN PROGRAMMING IS ABSOLUTELY ESSENTIAL TO THE FUTURE OF PRIVATE CANADIAN BROADCASTING, MICHAEL MCABE STATED AT THE PRESS CLUB

Summary  Canadian Private Broadcasters, which include giants CTV and Global, have changed their tune! From relying on US programs such as Friends to provide Canadian advertising revenues, they now see that these will decline as US programs are distributed via satellite and broadband internet and Canadian advertising revenues from them decline. Instead of arguing for less Canadian content, they now want to encourage this and be allowed to be distributors of Canadian programs. They want the CRTC to allow this, plus [cable] subscription revenues and not to overpay to the CRTC, but to pay the actual amount as the telephone companies do.

They suggest that the Heritage Committee in its upcoming study of the 1991 Broadcasting Act produce interim reports and recommendations, to forestall a final report which not only may be long in coming, but straddle the next Parliamentary mandate.

Changes to the Copyright Act, s 31 to stop TV pirates on the web, plus protection for private broadcasters and programming under WTP trade rules, but allowing for agressive exporting, are others changes the CAB has in its new policy that the twenty plus CEOs of their Strategic Planning Committee has endorsed.

Details  Mr. McCabe, on this, the 75^th anniversary of the CAB,  spoke to a room full of media types at the National Press Club Newsmaker Breakfast, focussing on the new policy that the CAB has developed and which they have made as a submission to the Heritage Committee's upcoming study of the 1991 Broadcasting Act.

The fact that the CAB is now promoting Canadian content is an about face from their usual complaining that the 60% Cancon rule is too high.

Of course their profits have been coming from licensing US programs such as Friends and reaping  Canadian advertising revenues from them. But now technology has caught up with them as they see down the road that, what with declining advertising revenues from shifts to viewing many speciality channels, future US programs may be available either via satellite and or via Internet  broadband, directly to the consumer.

Thus, the CAB wants to reposition private broadcasters to be the distributors and programmers of Canadian programs and increase this content on their schedules.

TV viewing has remained largely unchanged in the last decade at 22 hours per week, with Canadian news being the highest audience rated during prime time hours.In all categories of programs, private broadcasters have it 2:1 over public broadcasters.

Cancon share remains steady at about 30%, with English language programming private TV having a 52% share in 1984 rising to 74% in 1999, with French language Canadian programming  share rising from 50% to 65%.

Both English language and French language private broadcasters and speciality channels have seen  about a 10% gain in market share over the last decade to 61% and 76% respectively.

US network and specialty channels share of the overall English language audience market has stayed constant at 30%, whereas Radio Canada=s share has dropped from 27% to 20% and CBC TV from 13% to 7%, in the last decade.

The "Associates" premiere had the highest audience of any Canadian program since 1994 and Global's "Popstars" was the most watched Canadian TV show after Hockey Night in Canada. YTV's "Reboot" is the number one kids show across all networks. Alliance purchased YTV back from US interests and re-Canadianized its schedule. Similarly when the Food Network Canada was re-positioned with Canadian programs, audience climbed by 17%.

Thus, Canadian programming has meant that private conventional and speciality and pay broadcasters are now the leading providers of Cancon. The conclusion is that private broadcasters are not playing the ancillary role to the CBC that the Canadian government understood it was.

Technology changes and its  impact of convergence plus recent US media mergers means that  big US media giants will not bother to distribute to Canada, as signals will go via direct satellite and the internet broadband direct to consumers; one Hollywood movie channel even doing this today via Pay TV.

What do the private broadcasters want now, as stated in their recent policy paper:

 - we want the CRTC to authorize payment for [cable] subscriptions and not to overcharge levies as the  telcos are only charged actual cost, whereas TV has overpaid by at least $80million.

 - we want the CRTC to allow Canadian TV companies s to distribute programs as well, otherwise there is no profit for them in Canadian programming.  They are losing advertising revenues to speciality channels. The new digital channels however will take some time to get established and may not return a profit for 5- 7 years.

 - we want the Canadian TV Fund to be made permanent as an instrument of national policy.

 - we want the Heritage Committee study on broadcasting to have interim reports as we foresee recommendations being a long time coming and may straddle into another election and Parliament.

 - we want regulations on prime time drama to be changed; Trina McQueen wants Canadian news to be included as Cancon  this is the highest audience for private broadcasters.

 - we want WTO trade rules changed to protect Canadian broadcasters, but at the same time we want to aggressively export programming.

 - we want the Copyright Act to be changed, specifically section 31 to stop the ICRAVETVs pirating our signals.

 - we need to make our web sites integrated with programs, as the success of the "Survivor" web site has shown in supporting the program.

 - we believe that if these changes were made, it would not only assist private Canadian broadcasters as well as strengthen the CBC.

Questions from the media   Hugh Winsor, Globe & Mail,  suggested that private broadcasters had over spent on mergers and were facing heavy interest charges for capital expenditures; therefore private broadcasters are responsible for their own misery!  McCabe countered this statement by saying that US and Canadian mergers have occurred due to the high cost of programming now.

Mr. McCabe would even endorse the $900m which was invested in Netstar as he thought it would  be a good payback, although for the new digital services, this may take some years.

Mr. McCabe felt that when the CRTC finally appoints a new Chair, they will have act quickly in this rapidly changing environment.

CBC Radio wanted to know what CTV and Global's reaction would be to his speech - Mr. McCabe stated that it had been endorsed by the 20 top CEOs of the CAB Strategic Planning committee.

Noting that anything to do with the WTO was difficult to answer, Mr. McCabe stated that private broadcasters will have to compete without the benefit of cultural subsidies - or "industrial" subsidies as some called them. Many other countries are in the same boat.

With respect to Trina McQueen's comments on Canadian news programming being included in Cancon, he felt that their had been too much emphasis in the past on prime time drama. News programs were having their content enhanced of late.

He could offer no comment at this stage on the new move of ABC and CTV to share their foreign correspondents.

 Reported by Ray Pearmain