Local news shows may be experiencing some uncertainty after The Canadian Radio-television and Telecommunications Commission (CRTC) voted to phase out the Local Programming Improvement Fund (LPIF) over the next two years.
The fund was established by the CRTC in 2008 to help improve local TV by ensuring viewers receive a good quantity of quality and diverse local programming. It began during the recession when local TV was suffering. Since it seemed that cable and satellite companies were profitable, those that served serve 20,000 customers or more were required to contribute a percentage of their revenues to the LPIF to help support local TV. Some companies passed part of that expense onto their customers, for instance, on a basic Rogers cable bill in Toronto for July 2012, a customer was charged 24 cents per month charged for the CRTC LPIF fee.
The CRTC says the fund — set up for a minimum of three years — was created to relieve broadcasters during a difficult time.
“A big portion of the broadcasting sector was in jeopardy and we saw it important to help the local stations,” said Denis Carmel, a spokesperson for the CRTC.
However, now the CRTC argues that the financial situation for local television has improved and points to an increase in advertising revenue and the successful transition to digital television as reasons why the fund has served its purpose. It says the transition to digital was expensive for broadcasters mainly because of the high costs of installing new towers, but now that it’s completed, those expenses are gone.
“We found a way to provide relief to local stations and now the crisis has been evaded,” says Carmel.
But, broadcasters don’t feel the same glow from the rosy financial picture. They say the funds from the LPIF are crucial and don’t want them eliminated. CBC’s vice president and chief regulatory officer Steven Guiton said in an interview with J-Source that the there will be a great impact across a number of stations. The CBC received $40 million annually from the fund for 20 stations. The eight English stations used the money to increase their supper hour news shows from one to one and a half hours each day.
“Of course we’re extremely disappointed with the decision [to end the LPIF],” says Guiton. “The records show that the LPIF was a huge success. It has allowed us and other broadcasters to improve the quantity and quality of local programming.”
The LPIF also allowed the broadcaster to add more journalists and reporters to stations as well as late night newscasts in all markets. Guiton added that the fund helped to increase coverage of local sports, social events, elections and breaking news as well as the presence of local news on the national network.
“We documented those successes for the commission and unfortunately they didn’t think that was sufficient to keep the fund going,” Guiton said.
Guiton would not comment on any specific changes that may come to local programming spurred by the elimination.
Broadcasters will experience a hefty loss that comes along with the elimination of the fund. In total, the LPIF gave more than $300 million to more than 80 local stations; in 2010, 78 stations in small markets (less than 1 million people) received funding totaling $100 million and in 2011, 80 stations received $106 million.
Bell, the owner of CTV, is also concerned. The executive vice president of Bell, Mriko Bibic, said in a news release “… at a time when conventional television continues to be under tremendous financial pressure, including from a soft advertising market which continues to suffer from cyclical and structural downturn, this is obviously a major concern.” (Bell refused to elaborate to J-Source)
But the CRTC doesn’t buy those concerns: stations still must provide seven hours of local programming per week and the CRTC thinks that means local programming won’t suffer.
“Now, I believe the same level will be found, says Carmel. “I think we’ll have similar programming before the fund was put in place so we’re sort of back to where we were.”
This September, contributions from the fund will decrease from 1.5 per cent of gross broadcasting revenue to 1 per cent until it’s eliminated in August 2014. In the meantime, broadcasters like CBC and Bell say they are analyzing the new model, its financial impact and how it will accommodate the major change to local programming.