Source : Globe & Mail

Stark contrast between two networks likely to trigger calls for increased Canadian content

by Doug Saunders

A report filed yesterday with Ottawa's broadcast regulator reveals a stark difference between Canada's two major private TV networks, both in what they spend on Canadian programs and in their attitudes toward each other.

The CTV network, owned by Baton Broadcasting, spent $147-million, or about a third of it revenues, on Canadian TV programs last year, while Global Television, owned by Canwest Global Communications Corp., invested $67-million, or about 18 per cent of its revenues, according to the report's figures and the networks' financial statements.

The report, ordered last year by the Canadian Radio-television and Telecommunications Commission and compiled by the Canadian Association of Broadcasters, is likely to spur a call for greater spending on Canadian-content programming during the CRTC's hearings into broadcast policy this fall.

"If two networks are reaching almost the same number of people and one guy's spending diddly squat and the other's spending a lot, then obviously there's a problem," said Ian Morrison, spokesman for the consumer-advocacy group Friends of Canadian Broadcasting.  "The question this fall should be, what portion of the money that they're getting from the Canadian advertising market are they pumping back into Canadian programming?"

The report is also likely to fan the flames of an angry rivalry that has emerged between the two networks.

The collection of information was originally proposed, against Global's objections, by executives from CTV, the larger but less profitable network.  They have argued repeatedly over the past year that Global should have the same regulatory burdens as its competitor.  Since Global lacks stations in Alberta and is therefore technically not a national network (it reaches 79 per cent of Canadians compared to CTV's 90 per cent), it faces a smaller Canadian-content quota.  In order to fulfill the terms of their CRTC licences, Global stations generally show about 2.5 hours of prime-time Canadian programs a week while CTV stations typically show six hours.

Global executives prefer to argue that the entire private TV industry should face a lighter regulatory burden and that the CRTC should focus on improving ratings for Canadian shows rather than demanding higher expenditures and more hours of Canadian content a week.  In their view, the CTV executives are simply trying to unload their business difficulties onto the more profitable competitor.

"If you take the Rubik's cube of performance, no matter how you spin it, we're making the most money," Global president Jim Sward said, yesterday.   "We've ended up in different places; it's not because the CRTC is taking us there .... If you're going to regulate free enterprise and the private sector, you've got to give them some room to do well."

Indeed, the two networks have filed dramatically different submissions with the CRTC in anticipation of the fall hearings, with Global attempting to show that regulation should be lighter and CTV spending much of its 100-page report arguing that Global should face heavier obligations.  In recent months, CRTC hearings and industry-group meetings have sometimes devolved into angry shouting matches between CTV and Global executives.

Aside from the difference in expenditure levels, the report reveals that the networks get very different returns from their investments in Canadian programming.   While CTV earns a small profit form is Canadian programs, Global spends 34 per cent more on those programs than it earns from their advertising.

That difference is largely due to news, Global executives said, since CTV's news operations earn high ratings and generous returns while Global's news shows lose money.

In fact, Canadian entertainment programs appear to be money losers for most Canadian networks.  CTV spends 85 per cent more than it earns on entertainment shows; at Global, that figure is 16 per cent.  Only CHUM, which owns Toronto's City-TV and Barrie's CKVR, made a profit from its entertainment shows.

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