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Evidence of meeting #14 for Canadian Heritage in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was programming.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Colette Watson  Vice-President, Rogers Television, Rogers Communications Inc.
Phil Lind  Vice-Chairman, Rogers Communications Inc.
Kenneth Engelhart  Senior Vice-President, Regulatory and Chief Privacy Officer, Rogers Communications Inc.
Anthony Viner  President and Chief Executive Officer, Rogers Media, Rogers Communications Inc.
Pierre Karl Péladeau  President and Chief Executive Officer, Quebecor Media Inc.
Pierre Dion  President and Chief Executive Officer, Groupe TVA, Quebecor Media Inc.

4:05 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

I understand you've made investments, but what's wrong with your paying the fee for carriage, not customers?

4:05 p.m.

Conservative

The Chair Conservative Gary Schellenberger

Excuse me, Mr. Del Mastro, no more.

Mr. Rodriguez.

April 20th, 2009 / 4:05 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

Thank you, Mr. Chair.

You spent more time talking about CTV and Global than about yourself. You really look on the defensive, and I'm wondering what are you worried about.

4:05 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

It's because the proposal for fee-for-carriage is one that pits them against us.

4:05 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

That's the way you see it.

4:05 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

That's the way it is. The distributors are Rogers, Shaw, Bell, Cogeco, and Videotron. They're the distributors. They're the ones CTV and Global are asking to have money from, or our subscribers.

4:05 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

According to your analysis, the industry is cyclical and will ultimately recover. Your approach is to do nothing and wait for the situation to work itself out.

4:05 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

Well, we have the LPIF, the one percent that Konrad von Finckenstein spoke of last time, the local programming improvement fund that will dedicate $60 million or $65 million to TV stations serving small and medium-sized markets. That will—

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

Do you think $60 million is enough?

4:10 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

It will be of tremendous assistance to them.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

But that would be enough; we don't do anything else?

4:10 p.m.

Vice-Chairman, Rogers Communications Inc.

4:10 p.m.

Senior Vice-President, Regulatory and Chief Privacy Officer, Rogers Communications Inc.

Kenneth Engelhart

In addition, as Mr. Viner was discussing with Mr. Angus, there may have to be some recalibration of the regulatory obligations on over-the-air television. In the past, over-the-air was a licence to print money, and the CRTC loaded them up with obligations. In some cases, they have to do many hours of local and, in addition, Canadian drama in prime time. I could see in the hearings the CRTC initiating a recalibration where more of the Canadian drama obligation falls on the specialty programs. The local television station does local and news but less than before.

So I'm not saying that everything will stay the same, but with some modest readjustment of the rules in the LPIF, I think that will be enough.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

You said in your presentation that CTV and Global are spending more and more in Hollywood. That was how you presented it. Therefore, the fee-for-carriage approach would only give these stations more money to invest in Hollywood. Would you be more in favour of the fee for carriage if that money had to be used for local programming?

4:10 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

Then the commission would just increase the LPIF program.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

That is not exactly...

4:10 p.m.

Vice-Chairman, Rogers Communications Inc.

Phil Lind

The solution would be to just increase the LPIF program. You wouldn't need anything else.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

Okay, but a little while ago, you made a connection between the fact that these stations invest heavily in the U.S. and the idea that giving them money would create a problem because they would spend even more in the U.S. But, if the opposite were to happen and a condition was put in place where the fee-for-carriage money had to be spent here on local, regional or Canadian programming, would that change your position?

4:10 p.m.

Vice-Chairman, Rogers Communications Inc.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

Okay. So what do we do? The way I see it, after talking with the key leaders in the television industry, a real problem exists. The drop in advertising is real, and you say that it has happened before. Maybe we survived certain crises in the past, but there are other factors at work today, such as new media. TV viewership is dwindling because there are more choices out there. People are watching a little more here and there. I am not at all convinced that this industry, which you describe as cyclical, will recover as it did before.

There are different solutions. The government thought about increasing advertising, for instance. There is also the fee-for-carriage approach. Or, the government could give money directly to broadcasters, public or private. We have to figure something out.

What are you willing to do?

4:10 p.m.

Senior Vice-President, Regulatory and Chief Privacy Officer, Rogers Communications Inc.

Kenneth Engelhart

A lot of these things that you've heard aren't really true.

Revenue is not down. Revenue is up for the OTA industry. It grows by about 2% a year. Fragmentation, even the presence of the Internet, has not decreased the amount of tuning. Television tuning is about the same. Over-the-air tuning is down a little bit and specialty tuning is up a little bit, but the revenues are still growing. The tuning is still there. Those are not the problems.

The problems are that, number one, we're in a recession right now, and number two, they're spending too much in Hollywood. It's not that they're spending more on their Canadian, and it's not that their revenues have diminished.

4:10 p.m.

Liberal

Pablo Rodriguez Liberal Honoré-Mercier, QC

So it's their problem; they have to take care of it.

4:10 p.m.

Senior Vice-President, Regulatory and Chief Privacy Officer, Rogers Communications Inc.

Kenneth Engelhart

I think with some modest adjustments to the regulatory process, the over-the-air business will get better. We spent a lot of money to buy those City stations. We never thought there would be fee-for-carriage. And we think we can make money from them.

4:10 p.m.

Conservative

The Chair Conservative Gary Schellenberger

Thank you.

Ms. Lavallée again, please.

4:10 p.m.

Bloc

Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC

Thank you very much.

I want to pick up where I left off because what I have realized during this discussion is that there are a lot of things I do not understand. I will tell you why. It seems to me that your problems are so different from those of Quebec broadcasters, that we have an entirely different situation here. You said one of your problems was that too much money was going to Hollywood. To my knowledge, that is not the case with TVA right now. You say that it is a problem, but it is not a problem in Quebec. Do you not agree?

In any case, you do not have any stations in Quebec. Tell us, or it will not be on the record.