Quebecor Media Believes System Must be Rebalanced if Conventional Television is to Survive
November 18 2009 - 10:05AM
Marketwired
The Canadian Radio-television and Telecommunications Commission
(CRTC) must level the playing field for specialty channels and
conventional television stations, without any increase in prices
for consumers. The matter is urgent: more than ever, the survival
of conventional television stations in Canada is at stake.
That is the case Quebecor Media will make at today's CRTC
hearings on Canada's broadcasting system. "It is unfortunate that
we had to wait for conventional broadcasting to reach the breaking
point for some people to realize that the existing business model
is in trouble," said Pierre Karl Peladeau, President and Chief
Executive Officer of Quebecor Media (QMI). "The situation truly is
cause for concern: conventional television is the cornerstone of
our broadcasting system and plays a vital role in Canada's
democratic, cultural, social and economic life."
Uneven playing field
At the present time, the specialty channels have two main
revenue streams, advertising and fees, while advertising is the
only source of revenue for private over-the-air (OTA) broadcasters.
This is creating a dramatic imbalance in Canada's broadcasting
system. The result is that in 2008, the specialty channels had a
24% profit margin (EBIT), compared with only 0.4% for conventional
broadcasters. Yet, it is the conventional broadcasters that spend
the most on the production of Canadian content that must make the
largest capital investment in infrastructure, and must satisfy the
most stringent regulatory requirements. "I don't see anything
outrageous in the proposition that all players in the television
broadcasting industry should have access to the same sources of
financing," said Mr. Peladeau.
Therefore, QMI will again submit for the CRTC's consideration
the idea that some of the fees for carriage paid by the
broadcasting distribution undertakings (BDUs) to the specialty
channels could be redirected to the private OTA broadcasters in
order to resolve the crisis. Two conditions would be attached to
the payment of carriage fees to conventional broadcasters: the fees
paid by cable and satellite providers to private television
stations or networks and to specialty channels and pay TV services
should be negotiated on a free market basis, and the changes in
fees must have no impact on the prices paid by consumers.
Quebecers support conventional television
The solution proposed by QMI is particularly worthy of
consideration because it has the approval of Quebec consumers.
According to a Leger Marketing survey conducted between October
21 and 28, 2009, 71% of Quebecers consider it unfair that
conventional television broadcasters do not have access to fees for
carriage and think the fees should be divided equally between the
OTA stations and the specialty channels (51% vs. 49%). The poll
also found that Quebecers are deeply attached to conventional
television: 80% of respondents said it plays an important role in
preserving and spreading Quebec culture, and 76% said public
authorities have a responsibility to protect Quebec's television
industry.
"The rebalancing of the broadcasting system must enable
consumers to watch the programs they are interested in when they
want, where they want, on the platform of their choosing," said
Pierre Karl Peladeau. "And it must let consumers decide which
channels they want to pay for. Otherwise, audiences will hammer the
last nail into the coffin of conventional television and of the
CRTC by turning to the Internet and mobile devices to watch the
content they want."
Quebecor Media Inc. is a subsidiary of Quebecor Inc. (TSX:
QBR.A)(TSX: QBR.B), a communications company with operations in
North America, Europe and Asia. Quebecor Media owns operating
companies in numerous media-related businesses: Videotron Ltd., an
integrated communications company engaged in cable television,
interactive multimedia development, Internet access services, cable
telephony and wireless telephone service; Sun Media Corporation,
the largest publisher of newspapers in Canada; Canoe Inc., operator
of a network of English- and French-language Internet properties in
Canada; Quebecor Media Network, provider of flyer printing and
distribution services; TVA Group Inc., operator of the largest
French-language over-the-air television network in Quebec, a number
of specialty channels, and the English-language over-the-air
station Sun TV; Nurun Inc., a major interactive technologies and
communications agency with offices in Canada, the United States,
Europe and Asia; magazine publisher TVA Publishing Inc.; book
publishers and distributors Sogides Group Inc. and CEC Publishing
Inc.; Archambault Group Inc. and TVA Films, companies engaged in
the production, distribution and retailing of cultural products; Le
SuperClub Videotron ltee, a DVD and console game rental and retail
chain; and Quebecor MediaPages, publisher of print and online
directories.
Contacts: Isabelle Dessureault Vice President, Public Affairs
514-380-7501 isabelle.dessureault@quebecor.com
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