change can be costly

Array

Have you ever heard two skunks fighting?

You probably have, but just didn’t know it.

Consider, for example, the imbroglio between the nation’s broadcasters and the cable/satellite providers.

We’re sure you’ve seen the ads, but, really, does any mortal really understand this fight, beyond the intuition that TV junkies are about to be screwed?

Here’s a primer.

The networks – CTV, CBC and Global – want to be paid by the satellite companies for their broadcasts. The cable/satellite companies -Â Bell, Rogers, Shaw – don’t want to pay for them.

It’s dubbed the fee-for-carriage fight.

The satellite/cable companies say the networks made $400 million in annual operating profits and don’t need more money.

The networks say their advertising is dropping, and the satellite companies are profiting off their content, which is provided free.

Satellite companies argue networks are expanding spending on US programming at the expense of local content. The networks say that’s what makes money. And they no longer have the resources to provide local content, which is expensive.

Their solution is to bolster cash flow by making the satellite/cable providers pay a fee-for-carriage charge, which will be passed on to consumers. It will amount to $5 to $10 a month.

With us so far?

The problem, of course, is mandatory carriage.

Consumers will be forced to pay for the local networks – they are part of basic cable – even if they don’t want them.

And the networks are against the Wild West concept of allowing consumers to buy just what they want. If that were to happen, there might be a huge exodus to US networks and away from the locals. They would be in worse shape.

And so, the showdown between the networks and the cable/satellite providers is now before the CRTC.

And the networks are threatening to force the satellite/cable companies to block the US feeds of shows they’ve bought the Canadian rights to.

So, if CTV owns House, which it shows at 8 p.m., the cable provider would have to black out the LA-based Fox feed of the program at 10 p.m.

Why?

Because under the existing rules, Canadian ads only have to appear on the Fox broadcast that occupied the same timeslot as the CTV feed at 8 p.m. The 10 p.m. showing can have US ads. This costs the Canadian networks ad money. Somehow.

Confused? We don’t blame you.

It’s further muddled because this whole argument assumes people watch TV when the networks want us to watch. But modern recording devices allow most people to watch when they want. And to fast-forward through the ads.

So who cares when House airs? Or whether the ads are Canadian or US?

Bottom line, technology has changed the business model and the networks and satellite/cable providers haven’t figured out how to adapt.

Today, the networks are screwed because they depend on falling ad revenues.

Tomorrow it will be the satellite/cable companies screaming because most people will not pay for TV content. They will download the content through the internet.

Things are changing. But nobody knows how it will shake out.

Until then, we’re left with the sound of two skunks fighting.

The CRTC is currently trying to mediate this mess.

We urge it not to impose more fees on the public unless it gives them the choice to pick channels.

In the end, if this is indeed a free market, consumer choice should reign. (Richard Mostyn)

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