Simultaneous License Renewals of most TV Stations Today

[jon]

CRTC renews licences of most English-language television services: New licence terms to bolster funding for original Canadian programs
Canada NewsWire

OTTAWA-GATINEAU, July 27, 2011 /CNW/ - Today, the Canadian Radio-television and Telecommunications Commission (CRTC) renewed the licences of all English-language television services operated by Rogers Media until 2014, and the licences of the services operated by Bell Media, Corus Entertainment and Shaw Media until 2016.

Over the next five years, Bell Media, Corus Entertainment and Shaw Media must allocate at least 30 per cent of gross annual revenues to the production of Canadian programs. They must also direct at least 5 per cent of these expenditures to finance programs of national interest, with the exception of Corus Entertainment who will have to allocate at least 9 per cent of gross annual revenues.

Consequently, during the five years of their renewed licence terms, these companies will invest billions of dollars in original Canadian programming. In the first year alone, using forecasts based on revenues for the previous three years, these large ownership groups will spend approximately $774 million on Canadian programs.

Given that Rogers Media owns a smaller number of specialty services, the CRTC has determined that its new licensing approach, developed specifically for large ownership group with multiple specialty channels, cannot be applied to Rogers. Instead, the CRTC renewed its licences for a three-year period and imposed different spending requirements for Canadian programming. Rogers Media will have to spend at least 23% of gross annual revenues on Canadian programming for its conventional television stations. As a result, Rogers Media will not have the flexibility to shift financial resources between its television services to meet its spending requirements.

Additionally, in the first two years of its renewed licence term, Rogers Media must direct 2.5% of these expenditures to programs of national interest and 2.5% on new local programming. In the last year of the renewed licence term, the spending level on programs of national interest will rise to 3% while the spending level on local programming may decrease to 2%.

Using forecasts based on revenues for the previous three years, Rogers Media will spend approximately $106 million on Canadian programs in the first year of its licence term.

Today's decision follows a proceeding that included a public hearing, which was held from April 4 to 15, 2011.

Group-based approach

The CRTC's group-based approach was established in response to an evolving broadcasting industry, where a few large groups now control both conventional television stations and specialty and pay services. In addition, many specialty and pay services have become highly profitable, while the profitability of conventional stations has been declining.

The approach requires the ownership groups to invest in Canadian programming, including programs of national interest such as drama and comedy series, documentaries and award shows that promote Canadian culture. At the same time, the qualifying ownership groups have more flexibility to shift their Canadian content spending requirements between their various television services to meet their regulatory stipulations.

Broadcasting Decision CRTC 2011-441
Broadcasting Decision CRTC 2011-444
Broadcasting Decision CRTC 2011-445
Broadcasting Decision CRTC 2011-446
Broadcasting Decision CRTC 2011-447

The CRTC

The CRTC is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.

Reference documents:
Broadcasting Notice of Consultation CRTC 2010-952
http://www.crtc.gc.ca/eng/archive/2010/2010-952.htm
Broadcasting Regulatory Policy CRTC 2010-167
http://www.crtc.gc.ca/eng/archive/2010/2010-167.htm
News release, "CRTC unveils a new group-based television regulatory policy," March 22, 2010
http://www.crtc.gc.ca/eng/com100/2010/r100322.htm

[jon]

the qualifying ownership groups have more flexibility to shift their Canadian content spending requirements between their various television services to meet their regulatory stipulations

This has created some buzz. The concept of being able to move CanCon around, between channels.

Here is a little more detail:

16. In the group-based policy, the Commission also set out flexibility provisions for CPE requirements. Specifically, the Commission stated that qualifying specialty services would have the flexibility to attribute 100% of their required CPE to any other qualifying specialty service or conventional television station within the same designated group. Conventional television stations would have the flexibility to attribute a maximum of 25% of their required CPE to qualifying specialty services within the same designated group.