Tuesday, March 23, 2010

The Changing Face of the Boob Tube

War has been brewing between Canadian broadcasters and the cable and satellite carriers for years. At issue, who should pay for locally produced programs?

Yesterday, the Canadian Radio-television and Telecommunications Commission (CRTC) ruled in favor of the broadcasters, allowing them to negotiate charging a fee to carriers for inclusion of their signals in their channel line-up.

The ruling still requires federal court approval, and could be overturned by the court or appealed by the cable and satellite companies.

Broadcasters – including the primary television networks in Canada of CTV, Global and CBC – claim that unless they can collect a fee from television carriers, they won’t be able to produce local news and other locally produced programs.

CRTC reports confirm a loss in revenues, saying private Canadian TV broadcasters lost $116.4 million CDN in 2009, despite earning $8 million CDN in 2008 – that’s a huge drop of 93 percent.

Cable companies on the other hand had profits of $2.3 billion CDN in 2009, an increase of 11.9 percent from the $2.1 billion CDN they raked in, in 2008.

Though cable and satellite companies claim any new fees from the broadcasters will just be passed on to you and me – their customers.

Who’s right? Who’s wrong? Are Canadian broadcasters just poor money managers?

The answer – as with most things in life – isn’t that cut and dry.
The real problem isn’t the broadcasters or the television carriers fault. The real blame is our own ingenuity in technological advances.

When television first started breaking into our living rooms, channel selection was pretty limited. There were only a handful of signals available over the airwaves, sent via the Very High Frequency (VHF) band. Only channels two to thirteen could be carried on this frequency, which seemed like a lot, as not even half that many actually existed. Eventually, as television and radio stations began popping up all over the United States, the American Federal Communications Commission (FCC) re-allocated all over-the-air “bandwidth” to carry the load.

Amplitude Modulation (AM) and Frequency Modulation (FM) went to radio, while television stayed with VHF, and got an additional frequency – Ultra High Frequency (UHF), which carried television stations 14 to 83.

For those old enough to remember changing channels on their televisions long before remote controls existed – YES there was a time – there were two knobs on the boob tube. The primary VHF band, allowed you to tune in channels two to thirteen, and then you often would tune that dial to “U” (or some other similar symbol) and continue channel surfing on the other dial to get the few scattered stations on the UHF band.

As television caught on, more channels crept into the airwaves, and soon signals were being carried by cables buried deep underground. To get cable initially, you needed to purchase or rent a cable box, which allowed you to get as many as 60 to 99 channels depending on the cable box – again that seemed like way more than you’d ever need.

When digital television came out, the numbers of channels became a moot point.
Technology even solved the mysterious channel one phenomenon – channel one was never available on analogue-based systems as that frequency is actually reserved for emergency responders in many parts. But thanks to microchips, computer processors, and the completely electronic format of digital signals, digital television channels can be assigned any number, and the number of ‘em is just as endless.

This gave rose to the specialty channel boom – from the 24-hour all news networks, weather channels and other information-based programming, to the movie networks, documentary channels, there is even a channel called “Fireplace Channel” which – you guessed it, shows a roaring fire in a quaint fireplace 24-hours-a-day seven-days-a-week. Though you may start to question your sanity if you watch the Fireplace Channel for long.

And this is what is killing your local programming – not the ineptitude of broadcasters, or the greed of cable and satellite providers.

The more correct term for this phenomenon is “narrowcasting” instead of broadcasting – as specialty stations cater to very narrowly defined demographic groups. Sports channels run nothing but sports-related programming, catering to sports fans, while science, technology and nature channels cater to people interested in those specific topics, while the Fireplace Channel caters to – well – uh – er – we aren’t sure who THAT channel is for!

The point is, as television stations become more specialized, the television viewing market splits into fragments of individual viewers, each person watching the specific television stations which cater to each individual’s own interest.
I love science, technology and nature shows, found on stations such as National Geographic and Discovery. I also enjoy movies, so I get all the move networks.
You may like movies, but prefer classic cartoons, so you get Teletoon Retro.
Everyone’s individual tastes are different.

This is bad news for broadcasters, which cater to a general audience, trying to have a little bit of everything for everyone.

Why would I waste time even browsing channels which don’t typically cater to my specific interests, when I can tune right into channels that do?

So broadcasters in the traditional sense – the CTVs, Globals and CBC networks – are losing viewers, and that loss in viewers trickles down into less ad revenues, as the fewer people watching, the less likely companies will pay big bucks to promote their products and services on that channel.

Also, specialty channels offer a unique opportunity for commerce – they deliver the specific viewers interested in the specific types of goods and services for that station.

Think about it, wouldn’t, say a power tools manufacturer have a better chance of selling their products on a channel which specializes in home renovations, than on a broadcaster which may not even have a home renovations show?

As the television market continues to fragment, thanks to these specialty channels popping up all the time, traditional broadcasters will continue to lose money.

Just as the traditional broadcasters lose money, the television carriers earn more – because we are willing to pay more to subscribe to the specific channels we want to watch. That’s why the cable and satellite providers are raking in the big bucks, while the broadcasters are losing their fiscal shirts.

Allowing the broadcasters to charge additional fees to offset this loss in revenue isn’t going to make matters any better in the long-term. In the short-term, sure, any money you toss at a problem in the short-term appears to solve it.

But in the long-term, there simply won’t be enough viewers watching the traditional broadcast outlets. Unless the broadcasters begin narrowcasting, they will continue to bleed viewers until there is nothing left to but bone dust in the sand.

That’s the changing face of the boob tube.

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