Astral Media calls for caution in considering changes to television sector

MONTREAL - Astral Media Inc. appeared before the Standing Committee on Canadian Heritage today to present the Canadian specialty/pay television sector and to reinforce the need for caution when considering changes to a particular rule governing the industry without looking at the broader matrix of rules that serve to produce a carefully regulated balance between the various sectors of the industry.

"The Canadian television industry has developed because of a careful balance in benefits, rights and obligations," said Mr. André Bureau, Chairman of the Board, Astral Media Inc. "It may well be that we have reached a point where a rethink is required. However, it has taken 40 years to establish this balance and we should be careful to assure that any changes that are made do not have unintended consequences."

Speaking about the sector as a whole, Mr. Bureau underlined the importance of the specialty/pay sector as a key contributor to Canadian programming. According to the Fiscal 2008 CRTC industry report, the overall specialty/pay sector invested $1.1 billion in Canadian programming. Furthermore, according to the CRTC's 2008 Communications Monitoring Report, 55% of the total viewing of Canadian programs occurs on Canadian specialty and pay services.

In reference to the particularities of the French market, Mr Bureau added: "Investments in original programming for the Québec market are significant. In Fiscal 2008, Astral's French-language specialty and pay services invested more than $85 million in Canadian content. And, because we work almost exclusively with independent producers, the vast majority of this amount was invested in Québec's independent production community, increasing the overall impact of our Cancon dollars on domestic cultural development."

Astral Media's presentation also focused on the dynamics of the industry within the Québec market suggesting that the Broadcast Distribution Undertakings (BDU) relationship is a particular challenge. Quebecor Media is the dominant player in Québec, with integrated cable, OTA broadcasting as well as specialty and VOD services. Astral voiced its concern that if a fee-for-carriage was recommended, that it should not be left to the discretion of the BDU to decide how to source the funds. Quebecor has repeatedly indicated that if they were to negotiate the fee, it would be deducted from what is paid to specialty services as part of a "so-called" re-calibration of the system. In fact, in Quebecor's case, this "negotiation" would allow them to redirect the fees to benefit their own service.