The CRTC’s lifeline to Sun News

August 08, 2013  |  Chris Powell  |  Comments

While the Sun News Network failed to extract a promise of mandatory carriage from the CRTC, the federal regulator has extended a lifeline to the financially strapped 24-hour news channel by suggesting the possibility a new regulatory framework governing Canada’s TV news services.

The commission announced Thursday that it would conduct public hearings into a proposed regulatory framework designed to ensure “a healthy and diverse range of Canadian news programming” within the Canadian broadcasting system.

Sun News was one of 22 applicants that asked the CRTC to make their service part of every basic cable package in the country, thereby securing lucrative subscription revenue (Sun News was seeking 18 cents per subscriber in English Canada, 9 cents per subscriber in Quebec) as well as the ability to command higher advertising rates.

In announcing the review, the CRTC indicated that there is some merit to claims by Sun News that it had been distributed like a “third-rate foreign news service” since its debut in April 2011. Sun News is currently available in only 40% of Canadian households, and is not offered at all by some BDUs such as Telus and MTS.

Canadians still “overwhelmingly” access news through the Canadian broadcasting system, said the CRTC. Nearly 12 million Canadian households currently subscribe to a cable or satellite television service, collectively watching more than 138 million hours of news programming a week in 2011 – 12% to 45% of which was via specialty news services.

The CRTC acknowledged that non-Canadian news services such as CNN currently enjoy more favourable distribution compared to Category C national news services like Sun News. Non-Canadian services, the CRTC said, tend to be distributed in cable packages that enjoy high penetration and therefore significant access to potential viewership.

The CRTC also concluded that these services have also secured more lucrative wholesale fees than their Canadian counterparts – their average of 73 cents per subscriber per month is more than double the 36 cents per subscriber received by Canadian services.

Among its preliminary views on a proposed framework to govern national news services, the CRTC said that:

• BDU licensees shall distribute all licensed Canadian Category C national news specialty services (i.e., these services must be made available to subscribers)

• BDU licensees shall place new and existing Canadian Category C national news specialty services on channels in close proximity to one another (so as to create news neighbourhoods)

• Canadian Category C national news specialty services shall be available to subscribers in a package and on a stand-alone basis. Further, non-Canadian news services may be included in packages that offer Canadian Category C national news specialty services

• Canadian Category C national news specialty services should, unless the parties agree otherwise, be included in the best available package consistent with their genre and programming

• BDU licensees should file with the Commission all affiliation agreements to which they are a party with a new or existing Canadian Category C national news specialty service or a non-Canadian news service within five days following the execution of the agreement by the parties

The CRTC also pledged to act “swiftly” in the implementation of a new framework governing Canada’s news services, a promise welcomed by Sun News. The channel is losing an estimated $17 million a year, losses that parent Quebecor Media has said are “unsustainable.”

Interviewed on Sun News on Thursday, senior vice-president Kory Teneycke welcomed the CRTC announcement. “While we didn’t get [mandatory carriage], the CRTC has certainly absorbed many of the arguments that we’ve made and they’re reflected in this new framework that they’ve put out for consultation,” he said.

“We’re disappointed we didn’t get [mandatory carriage] but there is a pretty significant silver lining around the arguments that they accepted,” he added. “We’ll be calling on all the friends of the network to get involved in this next stage of this ongoing saga.”

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