As you’re probably aware, CTV has been running an aggressive “Save Local TV” campaign over the last couple weeks. Along with occasional ally Canwest, the two broadcasters are petitioning the CRTC to impose a fee-for-carriage on cable and satellite companies. In a recent guest post on Connect2Edmonton, CTV’s Lloyd Lewis wrote:

Local stations like CTV Edmonton do not receive any compensation from cable and satellite companies.  We believe the time has come that local television must share in this pool, just as all other channels on your cable and satellite systems do.

Shaw has been the most aggressive company on the opposite side of the issue. Here’s what Jim Shaw wrote in his message to Canadians:

Canadians should not have to pay to fix broadcasters’ problems. They’ve spent billions of dollars acquiring foreign programs, TV stations and newspapers and now they say they’re broke?

Essentially, I think the situation can be described as follows:

• CTV and Canwest are losing money. This is partly because of a decline in advertising revenue, exacerbated by the economic downturn.
• They have twice before asked the CRTC to impose a fee-for-carriage, and were denied both times. A fee-for-carriage would force cable and satellite companies to pay for the signals they rebroadcast.
• If such a fee were imposed, Shaw and other cable/sat companies would likely pass the cost on to consumers.
• Fee-for-carriage exists in other countries, but has never existed in Canada.

My gut reaction when I first started reading about all of this was that CTV and Canwest wanted a bailout, just like the auto manufacturers. Their business model is broken, and they’re looking for the quick fix. I firmly believe that we need to allow sick businesses to die, so that more efficient ones can take their place. I feel that way about all industries.

I decided to do some reading. Here’s what I have learned:

• CTV will apparently lose $100 million on its operations in 2009.
• The most common fee-for-carriage amount being thrown around is 50 cents. If such a fee were imposed, CTV would receive $56.4 million in revenue.
• I’m sure you can do the math, but that doesn’t seem like it’ll solve CTV’s problems.

CTV argues that their local news programs are suffering because I can get CTV Toronto and CTV Edmonton on my cable/satellite package. That means I can watch a popular primetime show on the Toronto feed instead of my local one. Some questions on that:

• Isn’t CTV receiving the same revenue either way?
• Isn’t most advertising sold nationally anyway? Isn’t that the argument for a large conglomerate?
• Why does the ad revenue for a primetime show affect my local news program as much as CTV seems to suggest it does?

The financials only tell one side of the story. It’s the other side of the story that really makes me frustrated. CTV has taken a page out of the newspaper playbook, and is claiming that they are vital to the local community.

Cities do not need newspapers to survive and flourish, nor do they need local TV stations.

In the article posted at C2E, CTV argues that local TV is important for the following reasons:

1. Local content is more relevant than ever, despite more the web making global sources and more choice available.
2. The accurate reporting of news is critical.
3. Local stations provide a high level of community service.

None of those things require a TV station.

You might wonder where all the local content is on CTV or Global. Aside from the news programs (which themselves are not even close to 100% local content), what is there? Lots of American shows, that’s what (this post is a long but good read on the topic of local vs. foreign content on the networks). The six o’clock news is too late for most breaking news, but too soon for context and analysis, which is what the 384 years of experience CTV Edmonton is touting would be good for.

TV stations are not perfect, they make mistakes from time to time. The problem is that they can’t correct those mistakes until the late news or else the next day. How accurate is that? More importantly, TV is not required for the dissemination of accurate news. It just happens to be one of the vehicles for it today.

It’s true that local TV stations do a lot for the community. So do other organizations. I’m sure charity events could find other individuals to MC. Aside from donating free advertising, I’m not sure what specifically CTV brings to the table with regard to community service that other organizations do not.

Comments via Twitter

I decided to ask Twitter for some comments on this last night. There was an almost even split among the replies I received, with roughly half supporting CTV and half supporting Shaw. Here are some of the tweets:

• wikkiwild1: I have to go with Cable, if CTV charges carriage fees they will be passed onto the cable subscribers. Why pay for local TV.
• andrewmcintyre: CTV and Canwest are clearly not in the right. The CRTC’s role in this debate is very interesting.
• chrislabossiere: if I had to pick one of two sides, I would say status quo and Shaw. They are at least fighting for a new way.
• ZoomJer: I’m for fairness. If you buy a DVD you can’t show it and charge admission. Shaw is in the wrong. I want to see @ctvedmonton stay.
• paulstrandlund: Shaw. CTV only has 1 local program – the news.
• tachyondecay: Neither. They’re both in it for money. My local TV (which has nothing to do with CTV) offers little interesting except news.
• thzatheist: Shaw. How has CTV fared so well this long? Advertising – let’s see them continue. (I only support media bailout if CBC is saved)

Final Thoughts

There’s really nothing “local” about CTV’s campaign. It’s disappointing propaganda, replicated across the network of CTV stations. It might have more of an impact if it actually came from a local perspective.

I don’t think Shaw and the other cable and satellite companies are completely in the clear here either. They are rebroadcasting CTV and Canwest signals without paying for them, and they seem awfully quick to suggest fees would be passed on directly to consumers.

Just because Canada hasn’t had a fee-for-carriage in the past doesn’t mean it shouldn’t in the future. I’m not completely opposed to a fee-for-carriage, but I am opposed to a mandatory fee-for-carriage. An optional one, on the other hand, could be good. I should be able to tell Shaw that I don’t want CTV Edmonton, saving us both the expense.

Of course, CTV and Canwest don’t want that, because then they’d see just how vital Canadians think they are. I think it’s unfortunate that CTV and Canwest are threatening more job cuts and station closures if they don’t get the fee-for-carriage revenue. What they should be doing is innovating, to reduce costs and to ensure they have multiple, steady revenue streams.

If they can’t do that, we should allow them to die. Healthy, innovative businesses will take their place.

Sadly, this whole argument may become irrelevant (or at least delayed) if the rumored $150 million bailout package for the broadcasters turns out to be real.

I’ll definitely be keeping an eye on this issue. What do you think?

UPDATE: It’s worth pointing out that the CBC doesn’t seem particularly interested in joining CTV and Canwest on this issue, despite the fact that they may benefit.