As is usually the case with television broadcasters, it’s all about the numbers.
But it’s becoming less and less about who’s winning Mondays at 8 p.m. in Toronto and more about a financial situation that went from good to awful even faster than Nip/Tuck. Recent figures from the Canadian Radio-television Telecommunications Commission show profits for Canada’s private conventional stations—including CTV, Citytv, Global Television and TVA—fell to their lowest level in 13 years in 2008.
Pre-tax profits last year were a mere $8.04 million, a staggering 96% decline from $112.9 million in 2007, and well behind the $242.2 million in profits they saw in 2005.
“I’m not surprised—all the signs have been there,” says Jack Tomik, a former Canwest sales executive who recently took an advisory role with the CBC’s sales and marketing department. “There’s a significant new player in the ad industry, and it’s called interactive.
“The money has to come from someplace, and it’s naturally going to come from the biggest source, which is television.”
Yet private broadcasters aren’t the only ones feeling the economic malaise. While its on-air product is arguably stronger than it’s been in years, CBC Television, too, is feeling the pinch as advertisers rein in spending. Announcing the mid-February departure of general manager of media sales and marketing Dave Scapillati, the CBC’s official blog, Inside the CBC, said sales targets had not been met for the past several quarters.
“People say, ‘It must be hard to be facing these economic times when you’re doing so well [from a content perspective],’ ” says Kirstine Layfield, the CBC’s executive director of programming. “I say, ‘Thank God we’re doing so well while we’re facing these economic times, because if we had been doing less than we are now, we probably would be shutting our doors at this point.’ ”
While the likelihood of a “For Sale” sign suddenly appearing on CBC’s Front St. headquarters in Toronto is about the same as Peter Mansbridge donning a floral suit and a high-collared shirt for a stint on “Coach’s Corner,” Layfield’s surprisingly candid admission underscores the perilous state of Canadian conventional TV.
Among the recent developments (as of press time):
• Canwest has hired RBC Capital Markets to conduct a review of its struggling E! channels in advance of a possible sale. If a buyer can’t be found, Canwest has hinted it may close the five stations
• Canwest also plans to sell its stake in sports broadcaster Score Media, and there’s even speculation the former Alliance Atlantis specialty assets—which include plum properties like Food Network and HGTV—may soon be on the block
• Noting that ad sales have fallen “off a cliff,” CBC requested bridge financing from the federal government, and has said it may consider selling some of its TV and radio assets
• CTV is trying to unload CKX-TV in Brandon, Man., and will shut its A Channels in Wingham and Windsor when their licenses expire in August. Announcing the closures, CTV said TV’s current economic model is “broken”
• CTV also announced late last year it was “resting” Canadian Idol—a costly production, but one that has anchored its summer schedule for several years
• Rogers Communications said an advertising slowdown within its TV operations led to a $138 million fourth-quarter loss
“I think the word ‘crisis’ is probably not overstating it,” says Duncan Stewart, director of Deloitte Canada Research in Toronto. “Continued layoffs, economic weakness, stock markets falling—all of these things create a negative spiral on [TV ad] spending.”
Predictably, the recent numbers led broadcasters to renew calls for the CRTC to reconsider its stance on fee-for-carriage, which it denied last year saying there was “no economic rationale” for such a fee to be implemented.
Barring a miracle, these latest numbers could compel the federal regulator to re-examine some of its policies, says Stewart. “We could have magic fairies wandering about dropping bags of coins on all television executives’ desks,” he says. “Failing that, something needs to be done about the business model.”
Some possible good news for broadcasters, at least from a U.S. perspective, came courtesy of The Nielsen Company’s recent “Three Screen Report,” which reported TV viewing by the average American now sits at an all-time high of 151 hours a month. People who watch TV via the Internet consume an additional three hours a month, while those watching on mobile devices watch an additional four hours.
Even though TV remains a key part of media consumption habits, broadcasters can probably expect to receive a rough ride from media buyers when the key upfront sales season kicks off in a couple of months. “Our clients’ money has got to be worth more now than it was last year,” says the head of one of Canada’s largest media agencies, a clear signal agencies—some of which have been incensed by broadcasters’ aggressive stance on rates in previous years—will be playing hardball during upfront negotiations.
The CRTC documents show the only figure that increased for Canada’s private broadcasters in 2008 was their investment in foreign programming, which jumped 7.4% to a record $775.2 million. The CRTC responded by dropping the bombshell—a “trial balloon,” Deloitte’s Stewart calls it—that it would consider forcing broadcasters to match every dollar spent on foreign programs with investment in domestic productions.
“A healthy system in Canada is definitely needed, whether the production community is going to be used by CBC, Global or CTV,” says CBC’s Layfield. “People might think the CBC would take the position that’s increased competition because we’re the only truly Canadian broadcaster… but my larger concern is we actually all have a strong production and talented community in Canada that will stay in Canada and tell Canadian stories no matter what network.”
The recent success of CBC shows like Being Erica (also airing on BBC Worldwide and ABC Family in the U.S.) and The Border (whose U.S. rights were recently sold to ION Television), plus CTV shows like Flashpoint (airing on CBS in the U.S.) are a clear indication Canadians are capable of producing shows that resonate with viewers around the world, says Layfield. “It shows that ‘American’ television, so to speak, can be made anywhere,” she says. “We have just as good production quality as anywhere else. We are producing top-notch product.”
Informally at least, the title of “Breakout Hit of 2008-09”—which, let’s face it, has been pretty blah on the new program front—likely belongs to CTV’s Flashpoint. It has been steadily building its audience since its debut and is now averaging more than one million viewers in the 9 p.m. Friday slot.
Conventional TV wisdom has been that Friday is where the schedule’s dogs are relegated; indeed, fans of Joss Whedon (Buffy the Vampire Slayer, Angel) were apoplectic when Fox announced that the über-producer’s new show Dollhouse—which is carried by Global Television in Canada—would air at 9 p.m. Fridays. “Fox network deposits Whedon’s Dollhouse in Friday death slot!” frothed AintItCoolNews.com.
CTV’s Susanne Boyce, however, dismisses such criticism as “oldthink.” The president of creative, content and channels for CTV Inc., points out that the hit show CSI began life in a Friday timeslot, while Jennifer Love Hewitt’s supernatural drama Ghost Whisperer, a fixture for CTV in BBM Nielsen’s national top 20 ratings, continues to thrive as the 8 p.m. lead-in to Flashpoint. “I’ve always felt that you can take any time period if it feels right,” says Boyce, who calls Fridays “a good incubator for a fledgling show. I think a lot is just the care and feeding of things.”
And Barb Williams, executive vice-president of content for Canwest, says a Friday time-slot can give freshman shows “a little bit of room to stabilize.”
Buyers, too, would probably like to see Dollhouse become a hit—if only to help break CTV’s continued stranglehold on the ratings. “They’re in a phenomenal position,” says Valerie McMorran, senior vice-president, investment director for Starcom MediaVest Group in Toronto. “There’s not a heck of a lot of competition. It’s a tough market on this side of the table.”
Long a destination for older audiences, McMorran says CTV is now beginning to challenge Global’s traditional strength among younger viewers with programs like Criminal Minds. “Everyone talks about how it’s programming and not the strength of the station, but there’s so much top of mind awareness [of CTV] with consumers,” she says. Adding to CTV’s dominance is the fact old war horses like CSI and the seemingly unstoppable Law & Order continue to thrive.
“How long can these franchises last?” asks McMorran.
Given the current climate, perhaps longer than conventional TV.
5 Shows for Spring
It’s a time for renewal, but will these network offerings be daffodils or dandelions?
1. Parks and Recreation
(Citytv, Thursdays at 8:30 p.m., beginning April 9)
From The Office producers Greg Daniels and Michael Schur, Parks and Recreation stars Amy Poehler (SNL, Baby Mama) as a mid-level bureaucrat with Pawnee, Indiana’s Parks and Recreation department. The sitcom will employ The Office’s “mockumentary”-style format, following Poehler’s character Leslie Knope as she attempts to beautify her town and advance her career. If anyone can make the world of grass cutting and pool maintenance funny, it’s Poehler. Also stars Rashida Jones (The Office).
2. Spectacle: Elvis Costello With…
(CTV, Fridays at 10 p.m., beginning April 3)
A sort of Inside the Actor’s Studio for the music crowd, with stuffy James Lipton replaced by British musical chameleon Elvis Costello. The hour-long show will see Costello in conversation—and performance—with veteran stars including Elton John, Tony Bennett and Lou Reed, plus relative newcomers like Jenny Lewis. Pump it up!
3. Harper’s Island
(Global, Thursdays at 10 p.m., beginning April 9)
No, it’s not about the Prime Minister’s secret retreat in Muskoka. Barb Williams, executive director of content for Canwest, describes the horror/drama as “a twisted Survivor.” The show—condensed into 13 episodes as opposed to the standard 22—follows a group of people attending a wedding celebration on a secluded island. Each week, one of the guests is killed off. An online counterpart, Harper’s Globe, has also been developed by social entertainment company EQAL, best known as the creator of lonelygirl15 site.
4. Late Night with Jimmy Fallon
(A Channel, Monday to Friday at 12:35 a.m.)
Sure he was funny as host of SNL’s “Weekend Update” segment, but filling the 12:30 spot vacated by the 6-foot 4-inch Conan O’Brien is a tall order for Jimmy Fallon. We’re already missing O’Brien bits like The Masturbating Bear and Triumph, the Insult Comic Dog.
5. ER finale
(CTV, Thursday April 2, at 10 p.m.)
Sure, it’s lost some of its lustre in recent years, but the series finale of arguably the greatest medical drama ever made—yes, trumping even Quincy M.E.—will likely bring in huge numbers. The finale is expected to see the return of beloved characters Doug Ross (George Clooney) and John Carter (Noah Wyle). Parent network NBC is expecting big things too: it is reportedly charging advertisers US$425,000 for a 30-second spot in the finale, far above its usual asking price of US$135,000.
