Canadian broadcasters need to find new ways to make money if they are to continue to offer popular, quality programming as well as local and national news, says CTVglobemedia Inc. president Ivan Fecan.
Speaking Monday before a special hearing of the Canadian Radio-television and Telecommunications Commission (CRTC), Fecan said that competition for advertising revenue has intensified, imperiling broadcasters' ability to produce programming.
"If we can't make money, we have no reason to exist," Fecan said in a prepared statement. "If using our best business judgment we determine that some of our services can never make money, we must exit those services."
Canadian broadcasters are at odds with the CRTC over their ability to develop new revenue streams, in particular so-called "fee for carriage."
CTVglobemedia and Canwest Global Communications Corp. have said they would like to charge cable and satellite companies for transmitting their network programs, as is done with specialty channels.
It is estimated that fee for carriage would boost broadcasters' revenues by about $300 million.
Fee for carriage has been raised before the CRTC twice in the last two years, but has been rejected each time after distributors threatened to pass on the charges to viewers -- between $2 and $10 per month per subscriber.
At the moment, conventional television networks such as CTV -- which is owned by CTVglobemedia -- and Global are funded through a single revenue stream: advertising. Fecan said that must change, asking the commission to consider a fund for local programming, in addition to fee for carriage.
Fecan called for a three per cent increase in the Local Programming Improvement Fund, and asked the CRTC to compel satellite providers to carry local stations.
Broadcasters also say other changes to the Broadcasting Act are necessary to ensure their viability.
On Monday, Fecan pointed out that the Broadcasting Act directs private networks to meet the demands of the Canadian audience, consistent with the "financial resources available."
"No one else in the broadcasting system is instructed to be responsive to the audience," Fecan said. "It means we're supposed to run popular programs and it's clear that our contributions are governed by our ability to pay for them."
In late March, CRTC head Konrad von Finchenstein said his agency was willing to temporarily lower Canadian content and local programming requirements for private broadcasters.
He also said that broadcasters would be able to charge cable and satellite companies for time-shifted local television.
Fecan argued Monday that distributors are raking in millions of dollars in profits while conventional broadcasters are losing money.
CTVglobemedia has laid off hundreds of employees in recent months and announced its intention to close local stations in Windsor and Wingham, Ont. Canwest has also made significant cuts to stave off bankruptcy.
"Over the years, there has been a series of decisions that have had the effect of compromising the underpinnings of conventional television while favouring the distributors (cable and satellite carriers)," he said.
"What I am saying is that things are seriously out of balance when, for five years running, the system produces continuous growth for one sector and continuous decline for another."
Meanwhile, cable and satellite companies are dead-set against charging fees to customers, with some industry estimating it could cost between $2.00 and $10.00 a month to the average consumer.
"The conventional over-the-air (stations) may be losing money at the moment," Phil Lind, vice chairman of Rogers Communications Inc., told CTV News. "But a lot of people are losing money at the moment, and this is a very dire economic time. So this is not the time for bailing anybody out."
Fecan has reiterated that CTVglobemedia is not asking for a bailout, or any short-term fixes.
"What interests us is a plan to build a sustainable future for conventional television in Canada," he told the committee last week. CTV and Global both indicated they may consider closing money-losing stations in small markets.
Fecan called conventional broadcasting "the best mass-audience vehicle ever invented," pointing to the fact that book and CD sales increase after broadcasts of the Giller and Juno Awards.
"While it is difficult to pinpoint why conventional television still works as well in attracting audiences, serving local communities and nation building, the fact of the matter is, it does and therefore, is worth fighting for," Fecan said Monday.
With a report from CTV's Rosemary Thompson and files from The Canadian Press
