Bell seeks fees for local newscasts

CRTC told that broadcaster lost $12M last year at regional stations

Local TV stations can no longer survive on ad revenue alone and must be able to introduce subscription fees for programming such as regional newscasts that have been free for decades, Bell Canada told a regulatory hearing Wednesday.

“The revenue side of the business has run out of steam,” Bell Media president Kevin Crull said during the third day of a two-week Canadian Radio-television and Telecommunications Commission (CRTC) review of the nation’s broadcasting system. The process is to produce changes by the end of 2015 that could include mandated pick-and-pay options for cable and satellite subscribers and the elimination or modification of some regulations that are out of step in a digital age. The growth of the Internet has splintered ad revenue across various platforms so that despite rising viewership, the 30 local outlets operated by Bell’s CTV English-language network lost a combined $12 million last year. CTV owned and operated stations include CFTO in Toronto and CKNY in North Bay.

Crull said local programming has been in the red for four of the past five years and that Bell Media is running out of patience. “It would be terrible to abandon any of these local communities but if I thought it would make local (news) sustainable I would,” he told the hearing in Gatineau, Que.

After removing costs through newsroom reductions and other moves, the network has run out of room to cut “without damaging the product,” Crull added.

Bell is pressing the regulator to allow it to charge distributors a subscription fee to broadcast local stations while it shuts signal transmitters to end the free over the air digital services used by about 5 per cent of Canadian households.

But Candice Molnar, CRTC commissioner for Manitoba and Saskatchewan, however, said she would not endorse a system that would see consumers pay for local TV subscriptions, assuming distributors would pass on the costs. costs would passed down.

She also said the Bell purchase of CTV was intended to generate the scale that would allow content to generate revenue over various distribution platforms — and help make local TV sustainable.

“We thought that you would be the solution. Getting rid of it (conventional stations) completely is surprising to me. You made the purchase only a few years ago . . . (you) must have known the situation you were in.”

“We bought ourselves four years with vertical integration,” Crull said. “We’ve taken about $100 million off in overhead.

“That’s allowed us to weather this storm for four years — but not today — no longer.”

He said financial woes of local TV had been offset somewhat by specialty channel growth over the past 10 years, but Crull said a second revenue stream is now essential to fund local programming.

“Our proposed local specialty model would finally bring stability to local stations,” he said.

“We appreciate the concerns for those who receive these signals over the air. But without this support, lo-

“It would be terrible to abandon any of these local communities but if . . . it would make local (news) sustainable I would.” KEVIN CRULL BELL MEDIA PRESIDENT

cal television could disappear entirely for all Canadians.” Bell also wants the CRTC to ditch its plan to ban the simultaneous substitution of ads by local stations, which it said would be devastating. Local substitution has drawn complaints from viewers but the CRTC said some of those concerns could be addressed if networks reduced technical glitches during the ad switch. Bell also argued that the CRTC’s proposal to allow broadcasters to shut down local transmitters to save costs would not produce a net benefit unless a subscription regime is also in place. Crull said it would simply leave viewers lacking cable or satellite without local news, information and entertainment. As well, BCE said it has concerns about a CRTC proposal that would force satellite and cable companies to offer channels on an à la carte basis. The company, however, supports individual channel choices on top of a so-called skinny basic package. The CRTC proposal would see the cost of the basic service capped at between $20 and $30 a month.