Canadian Heritage Committee on April 20th, 2009

[Dean Del Mastro, Conservative, Peterborough, ON]

You operate a number of specialty channels along with TVA. CTV operates a number of specialty channels. Global operates a number of specialty channels. All these channels need to sell advertising. CBC/Radio Canada competes for advertising dollars. It seems to me that the more stations we operate, the more the advertising dollars are going to be cut up, and conventional broadcasters may start to struggle. We've talked about how over-the-air broadcasting revenues have gone up only about 2% a year, or marginally. But there's an awful lot of advertising being sold on specialty channels, as well. Could it be that we're seeing a slower rate of growth on over-the-air broadcasting because there are just more channels to sell advertising to? Is that a fair argument?

[Pierre Dion]

That's exactly what's happening. The 20% to 45% market share I was talking about earlier, at $5 million per share, was a direct transfer to specialty channels. We just have to look at their numbers. They have two sources of revenue, and we have one. One is guaranteed, which is fee-for-carriage, and the other has been growing in the double digits for the last ten years.

[Dean Del Mastro, Conservative, Peterborough, ON]

For you, fee-for-carriage doesn't really matter, because you have the top TV station, and you're the supplier of cable, so you're just kind of taking the money and turning it through. It's not like Rogers or CTV. CTV isn't a cable company, and Rogers isn't in the over-the-air broadcast business to the extent that CTV and Global are. You're in a little different position. You don't really care one way or the other.

Is that a fair statement?

[Pierre Karl Péladeau]

Again, we're not CBC/Radio Canada. We need to make sure that our business will be profitable. At the end of the day, if it's not profitable, it will die. We're certainly not here to make that happen. Therefore, we will work very hard to make sure that our shareholders, at the end of the day, receive a decent return.

If conventional television starts losing money.... I don't think that there's no relation between operating it and making it in relation to the specialty channels. It's not as if you have five newspapers and you'll keep the five newspapers if two of them are losing money. There's no relevance or immediate relationship to the fact that we operate conventional and/or specialty channels and so will forget about the problem conventional television is facing.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay. Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you very much.

Again, I thank our witnesses and our questioners around the table. Thanks for your great answers and for being so candid.

The meeting is adjourned.