Rogers Media’s recent decision to slash 110 jobs and end all newscasts at OMNI, its multicultural channel, has sparked outrage among many ethnic communities, who have lamented the cancellation of local news programs in Italian, Punjabi, Cantonese, and Mandarin. Supporters argue that OMNI programming is essential to those communities and worry that the cancellations will mean that viewers become less politically engaged.
Last week, a House of Commons committee held a hearing on the OMNI cuts as members of Parliament from each party took Rogers executives to task. Rogers was unsurprisingly unapologetic, noting that the decision was based on simple economics as it pointed to declining advertising revenues that made the programming unsustainable.
Although MPs offered up a series of suggestions to stave off the cuts, the reality is that the changes at OMNI foreshadow a far bigger upheaval within the Canadian broadcasting world. Indeed, both the government (with its emphasis on pick-and-pay channels) and the Canadian Radio-television and Telecommunications Commission (with its TalkTV decision) have embraced change with the full knowledge that many channels will face elimination under the emerging framework.
Canadian broadcasters face at least three simultaneous pressures, creating a perfect storm that is likely to lead to many more cutbacks and cancellations.
First, channels reliant on highly profitable U.S. programming are finding that the audiences for reruns of previously popular shows are shrinking given their widespread availability from other sources, resulting in a major drop in advertising revenue. Rogers Media executive Keith Pelley told the House of Commons committee that OMNI advertising revenues had declined from $80 million to $22 million over the past four years. Profits from the U.S. shows had been used to subsidize money-losing Canadian programming, but with revenues dropping by tens of millions, that formula looks increasingly shaky.
Second, original Canadian programming may not fare well either. While critics have been vocal about the OMNI changes, Pelley revealed that ratings for the Italian language newscasts were down by 68 per cent over the past year.
With few people watching the programs – there are plenty of online alternatives – the audience is no longer there.
Shrinking audiences are likely to cause significant changes at conventional channels that rely solely on advertising revenues that are shifting to other media. But the biggest change within the Canadian broadcasting landscape will be among specialty channels that rely upon the bundling of channels to generate sizable subscription revenues despite small audiences.
As the accompanying chart illustrates, there is no shortage of channels that have thrived largely on the backs of those bundles to which consumers have been forced to subscribe as part of larger packages. That has yielded strong profits for Canadian broadcasters, but with pick-and-pay options on the way, the inability to generate advertising or audiences may mean those channels come to an end.
| Channel |
Subscriber Revenue (2014) |
Advertising Revenue (2014) |
Profit Margin |
Staff |
| Book Television (BCE) | $4,577,395 | $29,525 | 66.0% | 0 |
| Cottage Life (Blue Ant) | $3,913,117 | $780,806 | 14.8% | 0 |
| Discovery Velocity (BCE) | $24,772,293 | $585,057 | 57.8% | 2.5 |
| Documentary (CBC) | $6,277,020 | $270,325 | 12.9% | 8.5 |
| ESPN Classic (BCE) | $2,827,170 | $208,014 | 34.9% | 2 |
| Fashion Television Channel (BCE) | $4,511,730 | $172,552 | 34.5% | 1 |
| G4 (Canada) (Rogers) | $8,369,274 | $959,159 | 47.8% | 13 |
| MTV2 (BCE) | $4,955,132 | $122,920 | 37.8% | 0 |
| Odyssey (formerly OTN) (Odyssey) | $2,192,522 | $229,462 | 21.6% | 10 |
| The Brand New ONE Body, Mind, Spirit, Love Channel (Zoomer) | $4,604,750 | $70,973 | 24.6% | 17 |
Source: CRTC
For example, BCE’s Book Television garnered $4.5 million in subscriber fees in 2014, but only $29,525 in advertising revenue. Its profit margin was 66 per cent and it employed no staff. Book Television may sound like an anomaly, but it isn’t. BCE’s MTV2 generated $4.9 million in subscriber revenues with only $122,920 in advertising earnings and no staff, while a Zoomer channel garnered $4.6 million in subscriber revenues but only $70,973 in advertising dollars.
Pick-and-pay will not spell the end of all subscription-reliant channels, but with advertising revenues typically linked to viewership, many may no longer be viable. In fact, assuming Canadians opt for pick-and-pay and the trend toward watching Internet video continues, House of Commons hearings on the disappearing channels could become regular programming.
I am eagerly looking forward to the day when I’ll no longer be subsidizing channels such as this which I have never watched at all, ever. With the exception of when I used to channel surf and I’d see this channel, along with many like it, for a split second, it has always irked me to no end to be paying for so many that are of no use to me. What will irk me more though is that the upcoming “pick and pay” will still not be a true “pick and pay” system with some channels still bundled. Until I can get just what I want, I see myself coming ever closer to saying “good-bye” to cable tv. Be warned providers, I am sure I am not alone in this. Give us what we want or face extinction.
The demise of specialty channels could be foretold long before the CRTC ruled on “pick-and-pay.” For example, Bravo! used to carry genuine arts programs, many of them featuring Canadian artists, musicians and authors on programs tapes in what it called The Bravo Rehearsal Hall; now it could be called The Ryan Seacrest Network because all it seems to air are reality shows.
History Channel is another. It went from airing admittedly tired war documentaries and movies to sleazy reality shows that are very cheap to produce and this easier to make money on with an audience of no more than perhaps a half-dozen viewers.
Similar changes can be seen up and down the dial.
Frankly, the owners of cable networks are at least partially responsible for their own demise. I (as one, perhaps not typical, example) went from watching Bravo! two or three times a week to not watching it at all anymore; the same with History and a number of other previously-interesting channels.
I “pulled the plug” on cable months ago. Why should I pay a lot of money for the privilege of finding the same episodes of Mike and Molly or Modern Family on a dozen different channels at a dozen different times each day? Between Netflix letting me watch what I want, when I want, and the Internet, I can still see almost everything and for only $8 a month.
Bravo
Was not doing good at all when it was airing arts programs it was in real bad shape and there was even talk Bell was going to pull the plus but they rebranded it and it has saved it now its doing very well and by thw way there is only one reality show on Bravo.
History
Some of History shows draw millions of viewers.
Channels like omni only existed because of dumb Canadian content regulations that forced them to exist. American media is cheaper and more effective than any Canadian media at presenting content in an appealing form and Canadian taxpayers shouldn’t be subsidizing crap just because some smug Toronto elitists think having news in Portuguese is an example of Canadian “culture”. Here’s to hoping the CBC and its tax dollar siphoning garbage productions hit the chopping block next.
Wow. Why do you live in Canada and not the U.S., again?
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Yes we have way too many channels but OMNI provides a service to ethnic communities and should not be eliminated. What we watch and how we watch is changing. Rogers makes buckets of money. Providing a service is not too much to ask.
The root cause is that Bell and Rogers etc. have been allowed to become content producers, rather than being restricted to the role of common carriers.
It’s probably way too late to fix this. The CRTC has fallen hopelessly behind the state of technology. The idea that Bell and Rogers want VPNs to be declared illegal to prevent me from using US Netflix is a joke, and a symptom of how dysfunctional the Canadian version of reality is.
We’re not alone. When you use BBC’s iPlayer in the UK, it reminds you to pay for your TV licence even if you are streaming online. As if they can enforce such a rule.
All of these broken business models will have to adjust to the way things work.
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The time has come for these communist monopoly to stop! I’ve cut my cable and not missing it one bit. Almost on a daily basis I hear folks saying they got rid of their cable or will do so shortly.
I Just now got off the phone with Cogeco, cancelling my cable TV service. feels good. went 2 weeks with the cable unplugged to see if anyone in the household would freak out.. and no one cared. OTA is good enough.
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