February 13, 2009 / 4:54 PM / in 9 years

Canada may ease rules on struggling TV industry

OTTAWA/TORONTO (Reuters) - Canada’s broadcast regulator signaled on Friday it was considering ways to ease costly requirements on television stations, whose ad revenues have shriveled in recent months.

The commission that sets rules for broadcasters said it may consider easing requirements that stipulate that stations air a minimum amount of local programing, such as local news shows. Producing local shows is often more expensive than airing reruns.

It also said it was “strongly predisposed” to renew licenses for private television stations for one year rather than the usual seven. The shorter timeframe could give the regulator more flexibility in setting requirements on stations.

The proposals were presented in a consultation paper issued by the Canadian Radio-television and Telecommunications Commission (CRTC). It said it now wants comments from the broadcasters by February 23.

“The Commission considers that it would be extremely difficult to determine appropriate regulatory obligations for a full seven-year license term,” it said, citing the economic uncertainty facing the industry as the lead reason.

Canadian companies that own over-the-air stations include Canwest Global Communications Corp, CTVglobemedia Inc, Rogers Communications Inc and Quebecor Inc.

Their profitability shrank drastically last year while the economy weakened, according to data released by the CRTC earlier this month.

Revenues for private conventional television stations decreased by 1.5 percent to C$2.1 billion in fiscal 2008 while expenses increased by 4 percent. As a result, profits before interest and taxes dropped to C$8 million from C$112.9 million in 2007, the commission said.

A decline in advertising revenue has accelerated since the Canadian economy slid into recession late last year as marketers cut back on spending.

The revenue shrinkage has pushed media companies to cut costs even more aggressively. CTV cut 105 jobs in late November, while rival Canwest chopped 560, including 210 at its broadcasting operations, during the same month.

Canwest has also announced it will consider selling five of its conventional TV stations in Canada as it looks for ways to deal with its C$3.7 billion debtload.

($1=$1.24 Canadian)

Reporting by Randall Palmer and Wojtek Dabrowski; Editing by Frank McGurty

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