CRTC hearing examines troubled local television stations

Opinion

Hey there, time traveller!
This article was published 29/01/2016 (2619 days ago), so information in it may no longer be current.

The discussion, much of the time, has focused on high ideals, such as the health of democracy and journalistic integrity and the value of an informed public.

But the bottom line, as it always has been, is money.

Or, more specifically, the absence of enough of it to sustain local television stations and local TV news in this country in an age of shifting media-platform preferences and diminishing advertising revenue.

Since last Monday, the federal broadcast regulator has been holding a public hearing on the future of local TV in Canada, listening to submissions from major media conglomerates, smaller regional broadcast outlets and various interested advocacy groups and individuals with a stake in the declining financial fortunes of local television businesses.

According to most who have addressed the Canadian Radio-television and Telecommunications Commission in the first few days of the hearing — which is scheduled to continue until Wednesday in Gatineau, Que., — local TV is in a full-blown crisis in Canada.

According to a study commissioned by the advocacy group Friends of Canadian Broadcasting, without swift intervention by the CRTC to create a new financial-support framework for the industry, as many as half of Canada’s local TV stations could be forced to close by 2020, resulting in as many as 1,000 lost jobs.

This is, to be sure, a worst-case-scenario projection, but there’s no disputing that local TV — along with other ad-dependent media-sector enterprises such as newspapers and radio — has for nearly a decade been in a downward financial spiral that shows no sign of stopping.

Unlike other economic downturns in recent memory, the global financial meltdown of 2008 was not followed by an equal or greater rebound that refilled the industry’s coffers and set things back into business-as-usual mode. Many businesses that sought to reduce the sting of the downturn by cutting discretionary expenditures — including the cost of advertising on TV, radio and in newspapers — opted not to restore their ad spending in those traditional media, focusing instead on opportunities to reach customers via less expensive and more specifically targeted digital platforms.

At the same time, viewership of local TV news has also declined. In the just-released fall 2015 ratings results, perennial market leader CTV averaged slightly more than 85,000 viewers for the first half-hour of its supper-hour newscast, a slight increase over the same measurement period in 2014.

CBC’s local newscast averaged 38,500 viewers in the 6-to-6:30 p.m. slot, a significant increase over its 2014 result of 30,400 viewers — which could be attributed to the public broadcaster’s decision last year to shift its supper-hour show from a 90-minute, 5-to-6:30 p.m. format, back to the more traditional 6-to-7 p.m. format.

Global’s 6 p.m. newscast attracted an average of 32,400 viewers in the fall 2015 ratings period, compared with 40,500 in 2014.

By comparison, in the fall 2010 ratings, CTV’s audience was 129,000, Global’s viewership was 42,600 and CBC’s audience was 27,600 — meaning 43,000 fewer people were watching a local supper-hour newscast last fall than just five years earlier.

In the ratings for local late-night news, CTV saw its audience grow slightly, to 15,200 in the most recent measurement from about 14,000 in fall 2014. Global’s audience, however, dropped to 17,200 in fall 2015 from nearly 27,400 in fall 2014 — no doubt a reflection of viewers’ rejection of the network’s decision to drop Global Winnipeg’s locally produced late-night program and replace it with a Toronto-based show that attempts (unsuccessfully) to pass itself off as local.

Global isn’t the only local outlet to engage in format tinkering in an effort to improve its newscast’s bottom line, if not its ratings performance. Since losing its position as the local-news ratings leader in the early ’90s, CBC has undergone numerous format changes — making its supper-hour newscast longer or shorter while shifting its time slot several times, and eliminating its late-night program and then reinstituting an abbreviated local update into its national news coverage at night. None of the changes has allowed CBC to challenge CTV, which replaced the public broadcaster as the most-watched local newscast nearly a quarter of a century ago.

The issues facing local TV stations — and traditional media in general — are rooted in both economics and demographics. Advances in digital technology have expanded the number of platforms on which information can be distributed, and the new generation of media consumers — the so-called millennials — favours individually tailored streams of content on personal wireless devices over the old-school, sit-on-the-couch, appointment-TV experience.

The notion of local TV news as a shared community experience that arrives daily at a specific time seems, at this point, antiquated and quaint. With information available on a 24-hour cycle across multiple platforms, there are no longer those singular trusted voices — Knowlton Nash, Lloyd Robertson, Barbara Frum, even the still-present Peter Mansbridge — on whom the TV-watching public relies to set the daily news-and-information agenda.

These days, the highest-profile TV anchors, both local and national, compete with news-network announcers, online commentators, bloggers and self-anointed “citizen journalists” for the attention of news consumers. And these newcomers to the news game have forced traditional broadcasters to compete in the digital arena and play by digital-age rules.

As the long-established supper-hour and late-night news programs become less relevant with each passing TV-ratings book, TV stations must refocus their efforts on convincing the public that the way they report the news still matters.

But as media companies have poured resources into the effort to make their content available across multiple platforms, the money simply hasn’t followed. Online advertising generates only a small fraction of the income that old-school ads in traditional media do, and as advertisers continue to shift their spending to new-media venues, the economic picture for traditional media — including local TV stations — will become increasingly bleak.

Add to that the fact that millennials, as a consumer generation, have been raised with a widely shared belief that content should be free. They seek out illegal or grey-market means of downloading music, seemingly believing that artists don’t deserve to be paid for their art. Similarly, they expect news and information to also be free online, apparently unaware of the need for boots-on-the-ground reporting by paid journalists to provide the foundation upon which online commentary and “citizen journalist” analysis is based.

And asking the public to pay directly for content in order to compensate for lost advertising revenue is not a realistic option.

While the CRTC and purveyors of TV news continue to voice concerns about the need for a well-informed public and the health of Canadian democracy, the public itself seems generally much less concerned about being ill-informed.

What becomes apparent is that the declining financial fortunes of local TV stations and other traditional media might already have become an unsolvable problem.

Representatives for local TV newscasts declined to be interviewed for this story because the CRTC hearing is in progress.

The ratings numbers must be distressing for Winnipeg’s local broadcast outlets, but the situation here is not anywhere near as dire as in many smaller Canadian centres in which local TV stations are privately owned rather than being part of the country’s major private TV networks.

It’s those smaller stations — sometimes the sole source of local TV news in the communities they serve — that are at risk of being forced to close if the broadcast regulator is unwilling or unable to offer financial relief.

“You might say that Winnipeg is sort of a favourably endowed media community in comparison to other media markets,” said Friends spokesman Ian Morrison. “There’s probably very little (at stake) for Winnipeg, although there is a threat to local news everywhere — if the big companies aren’t doing as well, they may have to lay off people or reduce the volume of their television output. But Winnipeg, like Toronto, has a broad broadcasting infrastructure… and that is not, in my view, what this hearing is all about.”

Morrison cited Thunder Bay as an example of a smaller market whose local television outlets are in imminent danger without CRTC-mandated financial relief.

“In Thunder Bay, there are a couple of television stations that are commonly owned by one individual; they are both, according to my sources, losing money, and they both have affiliation agreements with major broadcasters for program supply that are fragile or falling apart,” he explained.

“They are at a real disadvantage when it comes to bargaining for American programming, so Thunder Bay could be an example (of an at-risk market).”

In fact, during last Wednesday’s submissions to the hearing, the vice-president and general manager of Thunder Bay Electronics — which owns the Ontario community’s two local stations — said they will both fade to black by September if current financial conditions persist.

Despite the CRTC’s reputation for being slow to act, Morrison said there is recent evidence the commission is capable of responding positively in a time of crisis.

“Their default is for things to be handled in an orderly fashion,” he explained. “But when the world recession struck back in 2008, there was an immediate hit to advertising… and the result of this was particularly seriously felt in small and medium-sized markets. And the CRTC did something then that was quite speedy and, I would even say, courageous — they created the Local Programming Improvement Fund in 2009, which required the distributors — meaning Rogers, Shaw and Bell — to take one more per cent out of their customers’ bills and put that money into a fund that would be used in small and medium-sized markets.

“It made a real difference.”

Under new leadership, however, the CRTC phased the program out over a period of three years — a move, according to Morrison, that contributed greatly to the current local-TV crisis. Friends of Canadian Broadcasting favours the creation of a similar model to support smaller local stations across the country; among the other options being proposed during the CRTC’s local-TV hearing is a plan that would allow major broadcast conglomerates to re-allocate some of the funds they are required to direct to community-TV programming into a fund that would support local stations.

Morrison calls that approach a Band-Aid solution, stating that “robbing Peter to pay Paul,” will not solve the financial problem facing many of Canada’s local TV stations over the longer term. Instead, he suggests taking new money out of the billions generated by the major media companies’ vertically integrated revenue streams.

So, then, what’s the answer? Is there a financial framework the CRTC can impose that will alleviate the financial stresses on local TV and, as a result, save local TV news? Or are we in the midst of a more Darwinian cultural change, in which consumers’ shift away from traditional TV delivery and toward other sources of online information? Will some traditional media be destined to die off and replaced by new-era alternatives?

And as the media landscape and consumer habits continue to evolve, should taxpayers and/or media consumers be asked to subsidize the weaker players in the fast-changing TV game? The same question has not — at least, not yet — been asked in discussions of newspapers’ declining financial fortunes and the crucial role of local print-media news sources in maintaining a well-informed public and a healthy democracy.

Perhaps discussions at the CRTC hearing will produce some brilliant, innovative answers to these confounding digital-age questions. Or maybe not.

Whatever the end result, Morrison remains steadfast in his belief that the outcome of these hearings, and the longer-term debate over local television’s future, will be critical to Canadians.

“I think, and our research backs me up, that Canadians really care about the quality of their news outlets,” he said. “They get it. And despite all the attention being paid to millennials, the millennials are the smallest share of that demographic (age) group in Canadian history. Because of demographic change, Canada is really an aging country, and it’s the people who have learned to care about those values who are becoming the largest (population) share of the country.”

That may be true, but as much as it offers short-term encouragement to local TV stations, it also reinforces the fact that TV news is in big longer-term trouble. Canada’s aging population will continue to age, and the millennial demographic — and, eventually, its offspring — will soon be the one that determines how and where news is presented and consumed.

And that’s a bit of factual information that’s very bad news for local TV newscasts.

brad.oswald@freepress.mb.ca

Twitter: @BradOswald

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