Canadian TV, Computing and Home Theatre Forums banner

1 - 18 of 18 Posts

·
Member #1
Joined
·
47,683 Posts
Discussion Starter #1

·
Registered
Joined
·
1,234 Posts
This makes me feel like I just got ripped off by a shady door to door salesperson. Even Mr. Finklestein (whatever) would have been aware of this report. Words fail me at this moment except for a few that are unacceptable in this forum.
 

·
Member #1
Joined
·
47,683 Posts
Discussion Starter #3
CTV will argue that while Specialty and Pay TV channels are thriving, conventional stations are hurting so without a fix, they will get out of the conventional television business.

Rogers will reply

"Both CTV and Global have profitable television operations. And contrary to claims made by CTV and Canwest, their broadcast assets should be valued as the sum of their parts, not as though each segment were a standalone business." stated Phil Lind, Vice Chairman of Rogers Communications Inc.
 

·
Registered
Joined
·
7 Posts
Sorry, but you and the article posted are way off base here. What stats can reported was that "Private television broadcasters were less profitable in 2008 than in 2007, their profit before interests and taxes falling to $691.0 million from $763.6 million. Specialty and pay channels accounted for more than 99.0% of these profits.

The over-the-air broadcasters who benefit from this have had revenue and profit declines for the last three years. In 2008, the profit margin was less than 1% while fat cats like Rogers and Shaw (who screw us on internet rates as well as tv) made profit margins in excess of 30%.

That 1% profit was before the recession hit. But arguable, if there had been no recession this year, given the trends, the over-the-air guys would have lost money anyway.

Bottom line is that commercial skipping technology is so good that the whole financial support system behind conventional television world-wide is failing. And while many companies own specialty channels as well as conventional, if you can't make money on conventional, there is no reason to keep it in business.
 

·
Registered
Joined
·
606 Posts
And while many companies own specialty channels as well as conventional, if you can't make money on conventional, there is no reason to keep it in business.
Sure there is - if they're legally required to support a conventional station for each cash cow specialty channel they own as their own way of "giving back" to the system which allowed them to make these increased profits year after year.
 

·
Member #1
Joined
·
47,683 Posts
Discussion Starter #6
Sorry, but you and the article posted are way off base here.
Sorry but those revenue and profits numbers are straight from StatsCan. Anyway you tumble it, private tv broadcasters earned $691 million last year.

It's true, the percentage from conventional, specialty and pay-tv may change and that conventional profits are down but that is why the company you work for and Global spent over a billion dollars to buy Chum and Alliance Atlantis specialty channels.

It's called diversification.

Three years ago you used profits from your conventional television stations to buy up and coming specialty and pay televisions. Back then you wanted protection for digichannels because their weren't enough subscribers to go around!

When the economy goes back up, profits at conventional tv will soar and the Percentage of profits from conventional will grow.


Anyway you look at it. StatsCan says private broadcasters earned a whopping $691 million last year!
 

·
Registered
Joined
·
7 Posts
Actually, private broadcasters could have made the same $691 million without their conventional stations. There is no way of legally "compelling" them to keep conventional stations running. There are already companies that own specialty stations and not conventional stations. Would this new supposed law force Corus (who only run specialty stations and are owned by Shaw) to set up a conventional network? I don't think so.

As I stated earlier, this is not a problem exclusive to Canada. The CBS network in the States is already considering turning itself into a specialty station so that it is not 100% reliant on advertising revenues. This is simple economics. If consumers can skip commercials with PVR's or P2P downloads, advertisers pull their money and conventional television goes away. Nothing comes for free.
 

·
Registered
Joined
·
606 Posts
There is no way of legally "compelling" them to keep conventional stations running.
Sure there is - legally requiring them to do so. Gay marriage wasn't legal in Canada until they made it legal as an example. People will be allowed to do, or forced to do, what the law dictates.

There are already companies that own specialty stations and not conventional stations. Would this new supposed law force Corus (who only run specialty stations and are owned by Shaw) to set up a conventional network?
Yes - either required to run a station for every specialty station they own that's operating beyond a certain profit margin (as determined by a third party) or to contribute that money to a fund that'd allocate the money to stations that choose to operate as non-profit community stations (like what CHCH was looking at becoming before the Channel Zero buyout)..

The CBS network in the States is already considering turning itself into a specialty station so that it is not 100% reliant on advertising revenues.
Les Moonves has said he's been told that it may be advisable for CBS to become a specialty channel and that he wouldn't dismisss the idea - that's a big stretch from considering it (unless you've got a source that he's actually considering the idea).

Besides that's one network among many in the US. Even if CBS went cable only there'd still be NBC, ABC, Fox, CW (1/2 owned by CBS so they'd still be around OTA) as well as the massive numbers of digital sub channels that are starting up shop who seem convinced that there's money to be made in OTA.

If consumers can skip commercials with PVR's or P2P downloads, advertisers pull their money and conventional television goes away.
P2P is a non-sequester to this discussion since there is no profit in any way for it as people are simply taking the broadcasts so there's no alternative profit model there.

Regarding PVRing - most consumers don't own PVR's. Also most PVR's are sold by cable companies to be used with their service so that doesn't apply to OTA.

For the few left that own a PVR and get their TV via OTA I'll agree that's an issue. When Australia put through their Freeview system they issued receivers with PVR's built in which didn't have the ability to fast forward through commerials so there are always viable aternatives to look at.

Nothing comes for free.
Agreed. Unless you're CTV where you get revenue from customers on cable because they're forced to sub to your channels although never watch it because it's part of a must carry package. Or your CTV again because get to rake on money hand over fist by being allowed to own and make a massive amount of the cable channels while giving nothing back to Canada and forcing consumers to pay for their OTA stations.
 

·
Member #1
Joined
·
47,683 Posts
Discussion Starter #9
There is no way of legally "compelling" them to keep conventional stations running.
But unfortunately, the CRTC can legally compel Canadians to take perhaps a billion dollars a year out of their pockets (between LIPF, CTF and the cost of simulcasting) to keep you afloat.

Frankly, that's absurd.

The world has changed. The Newspaper, radio, music and movie industry's are all undergoing massive changes and governments are requiring Canadians to spend billions to keep them afloat.

Thanks to excellent lobbying broadcast television and auto executives, however, get billions.

If your stations in wherever don't make money, then stop whining and shut them down
 

·
Registered
Joined
·
256 Posts
brink0949 said:
Would this new supposed law force Corus (who only run specialty stations and are owned by Shaw) to set up a conventional network? I don't think so.
Corus entertainment has 3 conventional television stations that I know of. (CKWS, CHEX, Channel 12 Durham).


Would the national broadcasters be able to secure the first run broadcast rights for the American programming they without conventional stations? I am talking programming from ABC, CBS and NBC not HBO or Showtime.
 

·
Registered
Joined
·
4,459 Posts
There is no way of legally "compelling" them to keep conventional stations running.
There is, to a degree. My requirement would be that first run US network and syndicated programming can only air on broadcast stations first. Specialty channels can only air it after a Canadian broadcaster has.
There are already companies that own specialty stations and not conventional stations. Would this new supposed law force Corus (who only run specialty stations and are owned by Shaw) to set up a conventional network? I don't think so.
No, but it would comply them to pay into a fund that supports conventional broadcast stations.

As I stated earlier, this is not a problem exclusive to Canada. The CBS network in the States is already considering turning itself into a specialty station so that it is not 100% reliant on advertising revenues.
My understanding was that, in that scheme, they still would be a "free" OTA network/station, but would specialize their programming lineup to a certain genre.
I could be wrong.
 

·
Registered
Joined
·
4,459 Posts
P2P is a non-sequester to this discussion since there is no profit in any way for it as people are simply taking the broadcasts so there's no alternative profit model there.
If you change "P2P" to legal sites such as Hulu or iTunes, there is a point, to the degree the station sees little to none of the revenue from those viewings..
Regarding PVRing - most consumers don't own PVR's. Also most PVR's are sold by cable companies to be used with their service so that doesn't apply to OTA.
Cable DVRs are beside the point. Users will still be skipping advertisers on both specialty and broadcast programming.
 

·
Registered
Joined
·
954 Posts
CTV keeps claiming conventional and specialty are separate entities and should operate as such, but then when they want to for their own advantage, they claim them as one company, especially when advertising for CTV shows on channels like TSN, or running the "Save Local TV" campaign across all their specialty networks!!!
 

·
Registered
Joined
·
7,131 Posts
It's not stated in the article, but I wonder what profits for OTA operations would be if debt incurred for acquiring the so called "money losing" operations was factored out. It would likely be a big fat profit. Also, I have to wonder what profits would look like if the newly acquired money losing operations were factored out. It's just a shell game for most businesses. They create a financial "crisis" by using leveraged buyouts (instead of general revenues) to acquire previously profitable operations. They then start squeezing everyone in the process by factoring the buyout costs into financial statements. OTA broadcasters are in no more financial straits than any other business that expanded as rapidly in recent times. They just see an opportunity to squeeze more money out of the public purse and have presented distorted figures to justify it.

fat cats like Rogers and Shaw (who screw us on internet rates as well as tv) made profit margins in excess of 30%.
According to the article, CTV and Canwest made 20% profit on their specialty channel operations. That doesn't make Rogers and Shaw look so fat. Also, consider that Rogers and Shaw are making huge, ongoing capital investments to increase network capacity, develop new technology and provide new services. The bulk of CTV and Global expenditures are for foreign programming while investing relatively little in the way of Canadian programming and new technical services. If Shaw and Rogers were run the way CTV and Canwest runs their networks, 90% of Canada would not have access to digital TV or high speed internet. :eek:
 

·
Registered
Joined
·
7 Posts
It's not stated in the article, but I wonder what profits for OTA operations would be if debt incurred for acquiring the so called "money losing" operations was factored out. It would likely be a big fat profit. Also, I have to wonder what profits would look like if the newly acquired money losing operations were factored out. It's just a shell game for most businesses. They create a financial "crisis" by using leveraged buyouts (instead of general revenues) to acquire previously profitable operations. They then start squeezing everyone in the process by factoring the buyout costs into financial statements. OTA broadcasters are in no more financial straits than any other business that expanded as rapidly in recent times. They just see an opportunity to squeeze more money out of the public purse and have presented distorted figures to justify it.
So you are saying that broadcasters in England, Europe, Australia and the States (in addition to Canada of course) are all in financial trouble because they overexpanded? And all of them are playing with accounting rules as well? That's some conspiracy theory ScaryBob.



Actually, the capital investments you guys are making are funded by consumer's cable bills which are being increased every year for that very reason. (We could call it a "capital investment tax" if we were spinning it for the press.) Bottom line is that consumers are paying for this stuff so cable co's can maintain their high profit margins. Somehow, these "investments" seem less altruistic in that light.

The government should have taken back cable as a public utility a long time ago (just like electricity). The CRTC has failed to protect consumers in many ways, but allowing the Cogeco's, Shaws and Rogers of this world to run virtual monopolies in their designated areas is probably the greatest failure. And don't even pretend that satellite providers level the playing field. A duopoly does not keep price points low, and we all know that satellite is an inferior delivery system.
 

·
Registered
Joined
·
7 Posts
As a consumer, I hate to pay for bundles services. I'd far sooner have an a la carte model (although both the cable and television companies shudder at that suggestion). I just think there is something wrong with the notion that I should be able to watch NCIS for free on Global but I'm forced to pay for endless repeats of it on the History channel because of the "bundle" I'm forced to buy.

Finally, south of the border, all of the Networks (i.e. CBS, NBC et al) are receiving "retransmission fees" from Cable and Satellite companies. Furthermore, the U.S. government re-regulated the cable co's so they couldn't stick it to the consumer. That works for me.
 

·
Registered
Joined
·
7,131 Posts
That's some conspiracy theory ScaryBob.
It's no conspiracy theory. It's well known that Canwest's problems are due to its high debt. CTV is not far behind due to their badly conceived acquisition of Chum that left them with the A stations. If you don't know how leveraged buyouts work, I suggest you look into it.

It's quite true that consumers pay for capital improvements in cable operations. It's not altruistic because consumers will pay for the added services. In contrast, OTA broadcasters are in trouble because nobody wants to watch, or pay for, stripped down services that are no longer relevant to the communities they serve. Maybe if they produced better programming and converted to digital, that would change. Digital TV has produced a surge in interest about OTA TV in the US and Canadian cities that have it, why not the rest of Canada too? It appears to me that CTV and Canwest want to force Canadians to support a product that many of them no longer want or need, a product that has seen no improvements and a lot of neglect for many years. OTA broadcasting is a dying industry in Canada, largely due to changing markets but also due to the actions (or lack of action) by broadcasters and the CRTC. I'm not sure that taxes and subsidies to support private broadcasters are even legal, let alone in the public interest.
 

·
Registered
Joined
·
7 Posts
This isn't a made in Canada problem Bob. As much as you would like to blame the leveraged aquisitions, there is something else going on here around the world. It may be your opinion that Canadian conventional holds no value for Canadians. But let's say we go ahead and do what some posters have suggested and just shut down Cdn conventional stations.
Do you seriously believe that American OTH broadcasters will allow cable to continue to carry their signals for free into Canada when their commercial model continues to erode due to commercial skipping technology? They are already charging re-transmission fee's in the States. They will soon want money from every potential source they can get it.
Who will be the bad guy then? Ugly greedy Americans? The Cable co's?
As I said in my original post, nothing comes for free. Technology is great, but we are confusing the benefits of technology, with the benefits of getting things for free. The "free" part will not last, just as the artificially booming American economy didn't last.
 
1 - 18 of 18 Posts
Top