Asper: Recession Not to Blame for TV woes

In a Report on Television report CanWest CEO Leonard Asper is quoted as saying that neither the recession, nor debt is responsible for the current woes of broadcast television.

" Neither the bad economy nor debt taken on by broadcasters are to blame for profit declines at Canada's major television networks, the head of CanWest Global Communications Corp. [CGS-T] told the federal broadcast regulator Tuesday.

Instead, chief executive officer Leonard Asper said the cause of the problem is a regulatory system that has allowed cable companies to get rich while network television erodes. The other forces are making the problem worse, but they are not the culprit, he said."

This is of course a political statement. CanWest Global, like all broadcasters in Canada, would like cable companies to pay carriage fees to broadcasters. Cable companies aren't interested and the CRTC doesn't appear to be interested either.

The recession has certainly had a profound impact on ad revenues which has hurt broadcasters. They have certainly taken on too much debt - CanWest recently bet the house on an acquisition of Alliance Atlantis: a move that was widely regarded as suicidal. So Aspers statement were certainly disingenuous but there is some truth to them.

The problems of broadcast television did not begin with the recession. It is primarily a refusal to adapt to the world of media as it is. A world that means smaller, fragmented audiences who insist on convenience and choice. Canada's television broadcasters have not made good choices, they have not tried to understand the audience or adapt to changing conditions and, although the writing has been on the wall for over a decade, none of them have taken more than baby steps toward the inevitable future.

From a 'vision' perspective, television is in much the same boat that auto manufacturers were a year ago. I have heard, from several different people in the last few years the statement "television is for boomers" (or statements to that effect.) and until that perception is corrected and steps are taken to adapt to the new environment all the carriage fees in the world will not save them.

Canwest's Ship Starts to Sink

Yet another reason why a fully funded CBC is necessary: the CBC was originally created as a uniting force in a large and sparsely populated country. Even today there is very little that unites this country from coast to coast to coast and reminds us that we are not part of the United States. Some will argue that that we no longer need the CBC, that it's function has been taken over by private broadcasters. Those people are wrong. First of all the private broadcasters primarily show American programs, second of all they are not financially viable: BMO Capital Markets analyst Tim Casey wrote in a note to clients today that CanWest's stock is essentially worthless and, whether his analysis is correct or not the company is so deeply buried in debt that its survival in its current form is nearly impossible.

"Canwest has another debt deadline looming Tuesday, by which time it must pay $30.4 million (U.S.) in interest to holders of its 8 per cent senior subordinated notes. The payment was originally due March 15, but the company missed it.

If it doesn't pay Tuesday, the investors can demand the repayment of about $761 million of outstanding principal on the notes. This could further exacerbate the crisis facing the company...
While critical, the looming interest payment is only the tip of the iceberg for Winnipeg, Manitoba-based Canwest, which has a debtload of about $3.7 billion (Canadian), some of it dating back to its 2000 acquisition of newspaper assets from Hollinger International."

Canada still needs a voice of it's own, and a uniting force for the country. A fully funded CBC is the only way to insure that we have that.

Canwest Cuts 560 Jobs

Media suffered it's first real (non-Harper induced) blow of the current recession today. CanWest (the media organization that owns Global and the National Post amoung other things) cut 560 jobs across Canada today.

"The 210 job cuts to Canwest's broadcast wing come from a restructuring of the E! entertainment specialty stations, the company said.

In Victoria, where 18 people, including on-air personnel, were being let go at CHEK-TV, stunned employees learned the news at a lunch-hour meeting.
On the publishing side, Canwest said it was making 350 cuts through restructuring the community newspaper group, streamlining production and reducing web operations of certain newspapers. The publications were not named.
Meanwhile, the Winnipeg-based company's flagship publication, the National Post, will make changes to "accelerate its road to profitability" by focusing on its profitable markets and reducing deeply discounted circulation."

While it's true that Global and the National Posts are near the bottom of the media food chain, the loss of any media jobs in a country where most of our media is puped over the border from the states is a blow.

Adbusters Ads

A few days ago I mentioned that Adbusters was suing CanWest Global and possibly the CBC for denying them the ability to run their counter advertisements. The fine folks at Art Threat have tracked down a few of the spots Adbusters wants to run. Personally I don't see the problem, they seem like perfectly legitimate public service announcements to me. But judge for yourself.

AdBusters Sues Canadian Broadcaster(s)

AdBusters is suing CanWest Global Communications and trying to add the CBC to the lawsuit.

For those of you not quite up to speed, here’s the gist: After over a decade of having our consumer-awareness TV spots rejected by just about every major commercial broadcaster in North America (often with little or no explanation from the network reps who issued the refusals), we resolved to take our fight to the courts. In 2004, we filed a lawsuit against the government of Canada and some of the country’s biggest media barons, arguing that the public has a constitutionally protected right to expression over the public airwaves.

The CTRC is apparently also involved in the case "On the grounds that it has consistently failed in its mandate to ensure that the public has reasonable access to the public airwaves." The full article from Adbusters is here.