Is The Canadian Association of Broadcasters Doomed? By James Careless

Is The Canadian Association of Broadcasters Doomed?

Like the NAB south of the border, the Canadian Association of Broadcasters (CAB) has long fought for the rights of private radio and TV station owners in Canada. In fact, the CAB was founded in 1925 during Canadian radio’s infancy, to ensure that broadcasters didn’t get gouged by the government applying copyright fees to radio’s transmission of music.

The CAB won that fight, and resisted attempts by successive governments and proponents of public broadcasting to abolish Canadian private radio entirely. With the advent of television, the CAB’s membership grew and new fights emerged; most notably over the government’s requirement for Canadian stations to carry some degree of domestically-made programming. Known as CanCon (Canadian Content), this regulation fostered the growth of the Canadian music industry and stars like Anne Murray, Bryan Adams and Celine Dion. However, it undeniably occurred at the broadcasters’ expense.

Today, the biggest fight in Canadian broadcasting is between over-the-air TV broadcasters and cable/satellite TV distributors. The first group wants cable/satellite carriers to pay to distribute over-the-air TV signals, to offset broadcasters’ losses in advertising revenue. The second group says that such a ‘fee for carriage’ would be passed onto Canadian consumers, who would not be pleased with such a ‘TV tax’. The resulting battle has ended up in the Canadian media and before Canada’s broadcast regulator, the Canadian Radio-Television and Telecommunications Commission (CRTC).

So where does the CAB stand on this issue? No one knows, because it has been silent. Of course, the fact that its last President, Glenn Farrell, has not been replaced after resigning a year ago, might be part of the problem. Another factor might be the slashing of the CAB’s staff from 35 to 17 in the past year, and the cancellation of its annual conventions in 2009 and 2010.

“It’s very difficult for the broadcast, cable TV and satellite TV members – the latter two now owning some broadcast stations themselves due to industry consolidation – to sit down together at the CAB and work out a common position,” says one Canadian broadcast consultant who spoke to RWI anonymously. In the past, the CAB might have been able to paper over such differences – but no longer.

Blame The Recession

Back in the 1990s, the CAB was led by the wily and astute Michael McCabe. Under his leadership as President, the CAB adroitly lobbied for broadcaster rights; both before the CRTC and the national media.

Given the nature of how the broadcast regulation game was played in Ottawa – competing players tried to strike compromises between themselves first, so that the CRTC had less trouble coming up with policies that more or less suited everyone – McCabe and the CAB played their hands well. Even the fact that CAB members such as Rogers owned radio/TV stations and cable TV companies didn’t cause dissension in the ranks: Consensus was relatively easy to find.

So what changed? Profits. The constant licensing of new ‘specialty TV channels’ – those seen only on cable and satellite TV, and supported by a share of their subscription revenues – cut into the over-the-air broadcasters’ ad revenues. (Ironically, since most of the specialty channels are owned by the broadcasters, they profit from this competition.) As well, the cost of U.S. programming, which anchors Canadian broadcast schedules, has gone up substantially.

All of this was bad enough, but then came the recession: It hammered CAB members. In responses, they cut costs wherever possible – including their CAB membership dues.

“This happened over a year ago, when everyone could see which way the ad market was going,” says CAB chair Charlotte Bell. To allow for lower membership fees, “we reduced some of the staff and streamlined our procedures,” she tells RWI. Among the casualties was the annual CAB convention: “We decided to postpone it for this year and next, and to revisit the topic at a later date.”

No Longer a Factor

The November 2009 CRTC hearings into fee for carriage should have been the CAB’s show. However, the association was unable to take a clear stand on the issue before the Commission, simply because its members can’t agree on the subject.

Those same members – the broadcasters and the cable/satellite TV companies – have meanwhile spending millions bad-mounting each other in print, TV and online. Depending on who you listen to, broadcasters are the patron saints of local Canadian television (despite commercial TV’s history of doing the regulatory minimum and constantly asking for further relief) while cable/satellite are fat cats who can afford to pay fee for carriage. That’s the broadcasters’ pitch: Cable/satellite portrays them as moneygrubbers more than happy to hit Canadians with a $10/month ‘TV Tax’, because any fee for carriage costs will ultimately be paid by consumers.

Why the mayhem? “Everybody’s eye is on the bottom line these days,” replies Canadian broadcast consultant David Bray. “With their survival on the line, everything else has taken a back seat; including working together to keep the CAB and its united front alive.”

By the time the hearings took place, the fee for carriage battle had become so nasty that CRTC chair Konrad von Finckenstein threw up his hands in despair. "I think you and the [over-the-air broadcasters] are destroying each other and chasing the viewers off television," von Finckenstein told the November 2009 hearings. "There must be a way, with people of your calibre, to find a solution where we carve up the pie and it's a win-win situation and the consumers don't pay more."

In the past, this would have happened behind closed CAB doors; effectively getting the CRTC off the hook. Small wonder that von Finckenstein was nostalgic.

Can the CAB be Saved?

Right now, the CAB has gone beyond the point of common ground. So says the anonymous consultant who spoke with RWI: “They have become an organization whose members can’t sit down with each other,” the source said. “There’s now too many disparate interests; too many wars between its players.”

As a result, the most this source hopes for is that “something might be born out of the ashes of the CAB that could resume its role.”

Only time will tell if the CAB’s warring members can come together again; perhaps if the contentious fee for carriage issue is somehow resolved to everyone’s satisfaction. Right now that seems unlikely: The cable/satellite TV companies will not pay the broadcasters out of their own pockets. Meanwhile, the last thing the Canadian federal government wants is to see cable/satellite fees raised, simply because its Conservative members will be tarred with allowing a ‘TV tax’.

Of course, this is not the first time that a national lobby group has fallen into disarray. Years ago, the Canadian Cable Television Association (CCTA), which represented Canada’s cable TV companies, found itself facing internal divisions among its members. Unfortunately, the ending of that story won’t make the CAB feel better: After 50 years in business, the CCTA folded in 2006.