Mandatory carriage for OMNI only option, Rogers tells CRTC panel

GATINEAU, Que. — Rogers Communications Inc. said it understands the irony of asking for mandatory carriage for its proposed new regional OMNI service, but that it’s the only way forward. The company started off the CRTC’s four-day public hearing on TV licence renewals for English-language groups Monday in front of a five-person panel of commissioners, who questioned the company on its proposal for a new national ethnic programming service. The proposal has faced criticism from other ethnic broadcasters as well as other large broadcast distribution undertakings (BDUs). In asking why Rogers didn’t make the same request regarding OMNI during a previous hearing on 9(1)(h), or mandatory carriage, CRTC chairman Jean-Pierre Blais noted that the company would have been contradicting itself, “because you were saying we shouldn’t be giving 9(1)(h) out because it has an impact on affordability and consistent with a competitive model.” During the 2013 proceeding, Rogers said that if “subscribers are required to pay for services that do not have broad appeal or that do not serve an exceptional public interest function, the Canadian broadcasting system will become increasingly ghettoized.” “We understand the irony we’re faced with and you’re faced with. It was not easy internally, as well, to get this to be moved forward,” Colette Watson, Rogers senior vice-president of TV and broadcast operations, said, adding that as a BDU, Rogers wasn’t against mandatory carriage services, but wanted to ensure they met the criteria. Watson also highlighted that Rogers was a 40-per-cent partner in CPAC, which is a 9(1)(h) service. “It’s ironic, I understand that. It is a difficult situation, but it’s the only one we could come up with, and our BDU partners understood that with respect to delivering what we think would make OMNI a 9(1)(h) service,” Watson said. Rogers representatives reiterated the company’s claim that the new service, which would include four regional feeds of the national network, and re-establish third-language daily newscasts in Italian, Mandarin, Cantonese and Punjabi, would not be generating a profit, but would be reinvesting any revenue back into programming. Rogers Media president Rick Brace said the company would even accept including its not-for-profit status as a condition of licence. The wholesale carrier subscriber fee attached to mandatory carriage of OMNI would amount to 12 cents per subscriber, which would go towards funding the service’s ability to produce news — a more-expensive undertaking than community affairs programming, reps said. But regardless of whether it gets its requested mandatory carriage, Rogers will continue OMNI — to a point. Brace said that the company will lose $8.3 million on OMNI this year, in its current form. “Our intent is, at least for the next few years, to keep it going,” Brace said. “It’s really important to us.” Blais also asked Rogers to address the critiques that the community TV framework already offered a solution to the OMNI issue. The formula of redirected funds leaves only $5 million for Rogers to work with, Watson said. And after $2 million in overhead, that leaves $3 million for OMNI “Three million dollars, Mr. Chair, for OMNI is like putting a band-aid on a hemorrhage,” Watson said, explaining that the money would be better served launching English-language newscasts on City stations outside of Toronto and that $3 million for OMNI wouldn’t be enough to do anything well. At the beginning of its nearly three-hour appearance in front of the panel, Blais seized on comments Rogers made about the need to migrate to digital and other platforms, and asked about its streaming strategy, brushing aside Brace’s emphasis on its over-the-top (OTT) Sportsnet Now service. Earlier in the month, Blais called out Rogers and its partner Shaw Communications Inc. for pulling the plug on their OTT streaming service Shomi, which will end on Nov. 30, saying he was “disappointed” in the decision. Brace said the real issue was content and content ownership, and that the traditional method of renting most content “is becoming incredibly expensive.” The “glaring example” with Shomi was that the cost of programs had increased so “drastically,” Brace said, as other international platforms competed for licensing. “And although we enjoyed a significant number of subscribers over the three-year period, what was clear is that the cost of programming is never going to produce anything that will allow us to really profit from that enterprise,” he said, adding that “getting into the content ownership business in a bigger way is vital.” Brace also said that Rogers is coming to the understanding that perhaps it needs to be collaborating with other services. “Maybe it’s better to understand you’ve got global players that have the scope, have the scale,” Brace said. “And rather than trying to push water uphill in a small market like we have, relatively speaking, we need partnerships.” Blais asked Rogers to file, as an undertaking, what this partnership strategy might look like. During its afternoon appearance in front of the panel, which included new vice-president of broadcasting Judith Larocque, Corus Entertainment Inc. said the creation of Canadian content was at the heart of the hearing. It was Corus’ first time before the CRTC since acquiring Shaw’s media properties. “In order to respond to an increasingly complex multi-platform competitive landscape, a much more flexible BDU packaging environment and the removal of genre protection, broadcasters need the flexibility to adapt our spending in these rapidly changing market conditions,” Doug Spence, Corus vice-president of finance, planning and analysis, said. Corus is requesting a decrease in its Canadian programming expenditure (CPE) requirement from 30 per cent to 27 per cent of the previous year’s revenues for its basic and discretionary services and 10 per cent for the six services it has applied to add to its group licence — ABC Spark, BC News 1, National Geographic Wild, Disney Channel, Disney Junior and Disney XD. “Through our CPE, we will seek first and foremost to reach our audience with quality and compelling programming,” Corus said in its application. “This a far greater investment than many of our on demand competitors will be making. Moreover, this investment is a floor, not a ceiling, and we fully expect as we do today to make continued significant investments in Canadian programming.” And those investments have to fit a variety of business models, because things are moving quickly and there are increasing avenues for content to get in front of consumers, Barbara Williams, Corus’ executive vice-president and COO, said. “But I think what we’re looking for is the ability to acknowledge that all ideas aren’t the same, all funding structures aren’t the same, all processes aren’t the same but we need to be able to find the right model for the right idea in the right moment to make it happen and make it fast,” Williams said. “Because as fast as you come up with the best idea, somebody else has done it and moved on to the next thing.” The hearing continues at 8:30 Tuesday morning in Gatineau, Que. —With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Mandatory carriage for OMNI only option, Rogers tells CRTC panel

News | November 28, 2016

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Mandatory carriage for OMNI only option, Rogers tells CRTC panel

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