Rogers today conditionally supported the application of BCE to purchase CTV while renewing its opposition to the proposed introduction of a value for signal (VFS) regime in Canada.
“This proceeding has reopened the issue of VFS,” said Phil Lind, Vice Chairman of Rogers. “CTV and Global argued for some time that value for signal was required in order to support the economic viability of their operations. With both broadcasters being acquired by large distributors, the rationale for this fee is no longer evident.”
“Going forward, CTV, TVA and Global Television will be owned and controlled by large, well-financed public companies that also own and control Canada’s largest broadcasting distribution networks. These are not corporate interests that require subsidies from ordinary Canadian consumers,” explained Mr. Lind.
Before it agreed to buy CTV, Bell, supported by Rogers, Cogeco, Shaw and Telus, had repeatedly argued against the need to hit consumers with value for signal. Together the five companies challenged the CRTC before the Federal Court of Appeal arguing that the Commission lacks the power to introduce a VFS regime.
The economic recession of 2008/2009 with its reduced advertising revenues is now behind us. Spending on conventional television broadcasting advertising in Canada is estimated by ZenithOptimedia, Canada’s largest media buying agency, to have grown at a 7.5% rate in broadcast year 2009/2010. Total advertising expenditures in Canada in this sector are expected to return to their 2007 levels in 2011.
The American experience with Fee-for-Carriage is not going well. American television viewers have been victimized by major disruptions of their favourite shows as broadcasters pressure distributors to pay more. There is considerable evidence in the public domain that major U.S. networks, such as FOX and CBS, are now asking for monthly retransmission fees of as much as $1.00 per subscriber per signal, with accelerator fees built into the typical three-year agreements. There have been dramatic incidents of blacked out signals of major programs including the Academy Awards and World Series baseball games. Neither of these outcomes, high monthly fees or blackouts, would be welcomed by Canadian consumers.
“In light of the changed financial circumstances of the Canadian OTA broadcasters and the reality of the VFS operation in the United States, the introduction of a Value for Signal system in Canada makes no sense,” concluded Phil Lind. “Our support of the Bell application is conditional upon Bell continuing its previously articulated adamant opposition to the concept of VFS and not allowing the stations of the CTV network to seek to enrich themselves (and BCE) at the expense of Canadian consumers by participating in any future VFS regime.”
About the Company:
Rogers Communications is a diversified Canadian communications and media company. We are Canada’s largest provider of wireless voice and data communications services and one of Canada’s leading providers of cable television, high-speed Internet and telephony services. Through Rogers Media we are engaged in radio and television broadcasting, televised shopping, magazines and trade publications, and sports entertainment. We are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). For further information about the Rogers group of companies, please visit rogers.com.
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