Susan Boyle crops up in Canada TV dilemma

CRTC chairman cites online video phenomenon at hearing

TORONTO -- How important can broadcast TV be when Susan Boyle's worldwide fame comes largely from YouTube?

That was just one of the questions rolled out Monday as Canada's TV watchdog and top broadcaster sparred during public hearings on the future of Canadian broadcasting in an increasingly digital world.

Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission, questioned the value of over-the-air TV when singing sensation Boyle, referred to as "some unknown woman from Scotland," was now an international star thanks to video Web sites.

"The clip on the Internet is from a British conventional TV show (Simon Cowell-produced 'Britain's Got Talent')," countered CTVglobemedia CEO Ivan Fecan. "It's an incredibly highly produced show. That's what conventional (TV) does." Fecan made his statements as part of a pitch for financial and regulatory relief during license renewal hearings in Gatineau, Quebec.

The exchange underlines the dilemma now facing Canada's TV watchdog: Order domestic cable and satellite TV operators to bail out broadcasters as they battle the Internet for audience share, or shift resources to digital platforms where audiences and ad revenue increasingly appear headed.

Fecan told the CRTC that the price of not rescuing conventional broadcasters will be the loss of local TV stations.

"If ... we determine that some of our (local TV) services can never make money, we must exit those services," he said at the CRTC hearings.

Fecan added that profitable cable and satellite TV operators are securing revenue from multiple streams, even as broadcasters are losing money from a slumping TV ad market.

He urged the CRTC to give broadcasters a second source of revenue, a carriage fee from cable and satellite TV operators for their local TV signals.

The CRTC has twice before turned down the so-called fee-for-carriage proposal from cash-starved broadcasters. But CTV and rival networks have returned to the well a third time after they wrote down the value of their conventional TV assets by billions of dollars and unveiled plans to sell or close local stations.

Domestic cable and satellite TV operators are expected to tell the CRTC that the broadcasters are exaggerated their financial woes to shake down their subscribers.

The CRTC's von Finckenstein also grilled Fecan on why conventional broadcasters spend progressively more on American TV shows that return fewer viewers and ad revenue over time.

Fecan shot back that the regulator risked the future of Canadian TV by proposing a lid on U.S. program expenditures.

"I think the market will take care of that kind of American spending because we're not getting the margins we need for it. We don't intend to engage in any bidding wars in this kind of environment," Fecan said with an eye to next month's Los Angeles Screenings.

The CRTC will hold three days of public hearings this week on broad policy issues, and then resume the hearings next week to consider individual TV license renewals.