The president of Bell Media fired a broadside at Canada's broadcast regulator on Friday, saying its policies are hobbling the company's profitability and suggesting that U.S. networks such as CBS, NBC and FOX should be kicked off the country's airwaves.
In a speech to a TV industry audience in Ottawa, Kevin Crull argued the business model for traditional broadcasters is "fundamentally broken" and "unsustainable," pointing a finger at Hollywood's direct intrusion on Canadian TV dials.
He also took aim at a number of policies created by the Canadian Radio-television and Telecommunications Commission (CRTC), including two recent decisions that Bell is challenging in court. But the central issue, Mr. Crull argues, is that the program rights Canadian broadcasters buy aren't being protected well enough, and that hurts the ecosystem that produces local content.
"If we believe the Canadian broadcasting industry is important, and if we want private investment, we must have a supportive regulatory and public policy framework – enabling rather than undermining content creators," Mr. Crull said in a strongly-worded speech that highlighted Bell's strained relationship with the CRTC. "Unfortunately, I don't believe we have that right now."
Bell Media is a division of BCE Inc., which also owns 15 per cent of The Globe and Mail.
By Mr. Crull's own account, Bell Media's over-the-air network, CTV, is having its best year ever in viewership terms, but still lost $40-million last year as the cost of content rises. The company has also been losing subscribers to its specialty channels.
In his eyes, the root of the problem lies in the decades-old practice of allowing American over-the-air networks – ABC, CBS, NBC, FOX and PBS – to be broadcast in Canada for free. Decades ago, the popularity of some of these channels helped draw wide enough audiences to build Canada's cable TV system. But it also created a unique cross-border relationship.
"Canada is the only country in the world that allows American networks to be retransmitted without restriction despite valid and exclusive copyrights held by domestic broadcasters," Mr. Crull said in his speech.
Since 1971, the CRTC has compensated with "simultaneous substitution," more often called "simsub." It allows Canadian broadcasters to swap in their own signals and advertising on American channels airing the same show at the same time – thus giving the Canadian broadcaster a way to maximize revenue from the rights it paid for.
Yet Mr. Crull calls simsub an "inelegant and insufficient solution." It leaves Canadian broadcasters beholden to American networks' schedules when deciding what time the most popular shows will air. And it draws complaints over errors that put the programs out of sync, or from viewers who want to see expensively-produced U.S. ads.
Canadian networks buy nearly all the most popular American shows because they draw big ratings. So, Mr. Crull wonders, why keep the U.S. channels as well?
"Do we need [the American over-the-air] networks? Are these signals necessary for Canadian viewers? No. Canadian networks buy the rights to 99 of the top 100 American shows. No viewer would be denied popular content," Mr. Crull said. "... Fix this and we don't need simsub."
Canadian viewers would certainly miss out on some programs, however. It isn't likely Bell would pay to carry American news or talk shows, for example, if their host networks were blacked out. "Do we value Canadian current events and talk shows, or are we okay with Good Morning America and The View?" Mr. Crull said.
Last September, when Bell appeared at the CRTC's Let's Talk TV hearing on the future of television, commissioner Candice Molnar noted that customers have told TV distributors the U.S. channels are important to them.
"You would not be concerned ... to strip all U.S. conventional [stations] off the Canadian system?" Ms. Molnar said. "It wouldn't hurt your customers?"
"No. No logical conclusion can get you there," replied Wade Oosterman, chief brand officer for Bell Canada Inc., noting that 197 out of the top 200 U.S. programs air on City, CTV or Global.
A spokesman for the CRTC declined to comment as the Commission is still deliberating over Let's Talk TV. A spokesman for Bell Media also declined to comment.
American specialty networks such as CNN, AMC or A&E would not be affected in Mr. Crull's scenario. But Bell wants to change the way it negotiates the cost of carrying those channels, and to be allowed to charge a subscriber fee for CTV.
Mr. Crull also used his speech to decry a decision striking down a pricing model Bell Mobility Inc. used that let wireless customers watch 10 hours of mobile TV per month for $5 without it counting against their data caps. And he took aim at a separate ruling that will ban simsub during the Super Bowl, for which CTV owns the lucrative Canadian broadcast rights, as well as for specialty channels. Bell says it will lose "tens of millions of dollars" as a result.
Finally, Mr. Crull called for measures to crack down on Canadians using technology to watch the U.S. version of Netflix, for example, circumventing rights that limit those shows to streaming services such as Bell's own CraveTV in Canada.