Call it Survivor: Alberta.
With a proposal before the Canadian Radio-television and Telecommunications Commission to add CHUM Television to the province’s broadcast landscape, and another to transform Global Communication’s ailing Red Deer TV station into a more viable on-air alternative, the two broadcast giants have asked the CRTC to vote them onto the island.
But A-Channel owners Craig Media and CTV, presenting a common front, called on the CRTC to vote CHUM and Global off at recent regulatory hearings held in Edmonton. The two are instead calling for a major CRTC policy hearing to examine the impact of structural changes to the Canadian broadcasting system. That hearing is necessary, they said, as licensing CHUM would give the Toronto-based broadcaster two stations in the Alberta market – it currently operates ACCESS – and Global would have its own TV network in addition to a fledgling new de facto national network under the CH brand.
CRTC policy, except for unusual circumstances, is not to grant second stations to broadcasters that are already in the market.
Craig and CTV told the commission they would be left at a disadvantage with only one station per market, translating into higher programming costs for them, a more fragmented market and lower revenue.
CHUM, which wants to open stations in Calgary and Edmonton along with a storefront operation in Red Deer, would import a format similar to its Citytv operations in Toronto and Vancouver. The company promises new dollars, including support to local independent producers in the form of a $15-million Indie Initiative, if it receives CRTC approval.
Plans are to be on the air by the fall of 2004, creating between 150 and 160 jobs.
“Based on everything we’ve learned, this is a very underserved market,” said CHUM president and CEO Jay Switzer, pointing to just three private broadcasters – A-Channel, CTV and Global.
“Most markets of this size, important other markets in Canada, have seven or certainly six,” he said.
“We absolutely believe Edmonton (and Calgary) can support a fourth service and we have an awful lot to offer, particularly for younger viewers, visible minorities and aboriginal people in this community who just don’t see themselves reflected on the air in primetime.”
Meanwhile, the CBC, in conjunction with Global, has asked the CRTC for a disaffiliation from Red Deer’s CKRD-TV station, which Global owns. The public and private broadcasters share the station’s transmitters and airwaves. Global is proposing to hand over its transmitters to CBC at no charge, allowing the public broadcaster to provide its full TV service (an additional 89 hours of programming) to Central Alberta viewers.
Using new transmitters, Global would then rebrand CKRD under the CH format it operates in Hamilton, Montreal and Victoria, replacing current CBC shows with new ethnic programming and a CH product that includes American fare.
Independent industry consultant Bruce Nelson, a former Alberta broadcaster, says he didn’t find much new at the hearings.
“I didn’t find a lot of differences, a lot of diversity,” Nelson said. “There are more newscasts at 6 p.m., there was probably more active multicultural and ethnic programming being suggested than what currently exists on the local stations, but there wasn’t a lot of it – a mere few hours compared to the thousands of hours of American programming.”
It could take up to six months for the CRTC to reach a decision, and Nelson suggested the commissioners might want to take time to consider all the subjects that were raised.
“I felt there are so many issues at stake and these just don’t have to do with Alberta, there are implications that affect all of Canada. What you are looking at here in Alberta is the last spike of nailing down a couple of key issues,” said Nelson, referring to Global’s push for dual network status and allowing CHUM to obtain a full network grid.
“There is a reason that the commission may have to pause and look at the structural nature of the system,” he said. “I do think there is a possibility they’ll license, but not right away. They may license something different.”
For Global, whose Red Deer station has lost $6 million in the last three years, the proposal would let it lower costs at CKRD and bring back simulcast revenue that it lost when it was dropped lower on the cable channel dial and demoted to a distant signal.
“It will allow us to tap into the CH pool of programming and that will significantly lower costs for us,” said CKRD general manager Ray McBeth. “It will also provide us with higher- profile programming. It will give us the must-carry signal in Calgary and Edmonton, which then gives us the simulcast opportunities back again.”
If the commission turns down the Global proposal, McBeth said, “then we will have a serious problem and we would have to take another look at where we are and re-evaluate.
“We have committed to serving our community. We’re not going to alter that, but I’m sure there would have to be some measures taken just to ensure our viability.”
Should the CRTC give Global the green light, CKRD will hire 11 people. Ten of the jobs would be related to new programming initiatives and their production.
Global said it would also refrain from soliciting or accepting local advertising in Calgary and Edmonton, “except during those periods where we provide ethnic, aboriginal or multicultural programming, to ensure that this proposal will add maximum diversity while having minimal impact on incumbents.”
According to CHUM, a buoyant Alberta economy and a strong advertising market mean there is definitely room for another player.
“Advertisers are buying Alberta – Edmonton and Calgary – before they’re buying the rest of the country, in fact, before they’re buying Vancouver or Toronto,” said Switzer.
“Advertising rates, in terms of costs per points, have risen dramatically at twice the level of the rest of the country since 1997. There’s much more demand than there is supply and we think our station will help put that back into balance.”
But that picture is distorted, claim Craig and CTV. Craig, which buys 25 per cent of its primetime shows from CHUM, including Enterprise and The Bachelor, for which CHUM owns the Canadian rights, said a new CHUM station would be devastating.
“In a seven-year period, CHUM’s proposals would result in a $150-million revenue loss for Craig,” Craig officials told the CRTC. Further, the commission heard that CHUM’s proposed program format is “virtually identical” to A-Channel’s.
“We look at the CHUM applications as a full frontal attack on our stations. They want what we have,” said Craig Media president and CEO Drew Craig.
Acceptance of the Global proposal by the CRTC would also mean a financial hit for Craig Media, said Craig, suggesting a loss of $140 million over seven years.
Should the commission license both applicants, Craig Media expects its share of the television revenue pie to drop to eight per cent from 24 per cent, a blow that would severely limit its growth, said Craig.
If either applicant is approved, Craig said, it would mean taking a long, hard look at its Alberta operations, which subsidize its digital services, as well as the start-up of the company’s newly licensed Toronto channel, to potentially scale back expenditures to fit reduced revenue.
CTV is still recovering from the A-Channel launch in 1997, said president Rick Brace. Despite cost-cutting, CTV’s profitability in this market has not recovered to pre-1997 levels, the commission was told.
In Edmonton, CTV affiliate CFRN cut 50 full-time staff and revenue declined by $4.5 million from 1997 to 1998, with 2002 revenue figures the same as they were 10 years earlier.
In the corresponding five-year period at CFCN, 26 full-time jobs were lost and revenue dropped.
“If these stations are launched . . . the impact would mean that we would not be back to industry levels in terms of profitability right through 2011. In fact, that situation exists if only one of the stations is launched,” said Brace.
Further job cuts would be possible under this scenario, said Brace. “It’s not like a new station, contrary to what some of the applicants are saying, is going to stimulate more spending or more revenue on television. We didn’t see that when the Craigs launched. There is no reason to believe it would happen now. So you’re still dealing with the same pot of advertising expenditures on an annual basis, they’re just being divided up between more players,” said Brace.
