CityNews Channel’s demise and why demand for local television news is expensive

The abrupt closing of CityNews Channel Thursday May 30 came at an inopportune time for news consumers in the Greater Toronto Area, observers say, because it happened while appetites for local news coverage are stronger then usual, thanks to the continuing scandal surrounding Mayor Rob Ford and the alleged video showing him smoking crack cocaine. 

            According to Bill Harris, the national television critic for Sun Media, the 20-month old all-news-channel was, indeed, providing important public-service journalism.

               “I knew I could tune there when something was happening and they’d be on it, so that is a big loss,” Harris said, referring to CityNews Channel’s live broadcasts from Toronto city hall. 

            Since Thursday morning at 9 o’clock, the channel has been airing only an audio feed of the Roger’s-owned flagship Toronto radio station 680 News, plus weather and images from local traffic cameras.

            In a statement released last week, the president of broadcast at Rogers, Scott Moore, blamed shifts in global advertising and in viewer habits for the decision to shutter CityNews Channel. More than 60 full time jobs were lost, including some employees at OMNI Television.

            In Harris’ view, Rogers launched CityNews Channel with the best of intentions, in October 2011, intending to compete in the local news niche with long established Cable Pulse 24, owned by Bell Media.

            “I would assume they launched it thinking there was a void, thinking that people wanted a choice from CP24,” Harris said. “And even though they were doing a decent job of it, in the end, when you are monetizing that, and looking at the entire health of your company, it didn’t turn out as rosy as they would have hoped.”

            While CityNews Channel could leverage the respected Citytv brand, including high-profile news personalities Gord Martineau, Kathryn Humphreys, Avery Haines and Cynthia Mulligan, it was CP24’s feed that was usually playing on television sets in most bars, waiting rooms, restaurants and gyms around the city.

            CityNews Channel even offered its programming in high definition a year before CP24 started to, but that wasn’t enough to make viewers change the channel.

            “People are creatures of habit and if people don’t have to change, sometimes they won’t change,” Harris explained. “If CP24 is on that boxed TV that’s chained to the wall, it’s going to take somebody actively changing the channel.  What people say and what people do in terms of their viewership or reading habits, is often quite different.”

            In a Tweet two days after he announced the demise of CityNews Channel, Rogers’ exec Moore said they thought they were better then CP24 but  “too many other issues got in the way of success”.

            One issue that he might have been referring to, was the revenue from subscribers. Financial statements filed with the Canadian Radio-television and Telecommunications Commission tell a stark story that the accountants at Rogers couldn’t ignore: CityNews Channel drew 1,525,017 subscribers in 2012, compared with CP24’s 3,033,805. CityNews Channel showed a 2012 loss of $3,926,995 compared with CP24’s profit of $1,350,657.

            Nearly all of CityNews Channel’s expenses went to production and salaries ($4,200,456), proving Harris’ theory that while people say they want local news, it costs media companies a ton of money to provide it.

            “People always scream that they want local news, but do they actually watch it and are they willing to pay for it, that’s the dilemma for the industry,” Harris said, suggesting that if the Rob Ford scandal had happened when CityNews Channel launched, things might have been different.

            “Maybe the decision was made in the upper echelons long before bombs starting going off at city hall,” Harris said.

            The financial woes may also stem from the kind of broadcasting licence which the CRTC granted to Rogers: CityNews Channel was approved as a Category B (meaning optional), specialty local channel, seen only on Rogers cable and also on Shaw and Cogeco in southern Ontario. The CP24 licence is a Category A (meaning mandatory) national service on basic cable, and on direct to home satellite. Rogers  had to carry CP24 but Bell did not carry the CityNews Channel.

             CityNews Channel earned just $304,716 in 2012 from subscribers, while Bell earned about $3.5 million in 2012 from both its satellite and cable customers.

            While much of the fallout from Rogers announcement has been focused on the shuttering of CityNews Channel, the company last week also cut its OMNI television programming in Alberta, and cancelled its Toronto-based English language nightly South Asian news program.

Toronto-based news host Angie Seth was among the casualties of the layoffs. In a Tweet May 30, Seth thanked viewers for “welcoming me into your homes” and promised to be “back on the air somewhere soon.”

Retired OMNI news editor Jules Elder sees the retrenching at OMNI as a “blow for diversity television in Canada.”

            Elder, who spent 15 years at OMNI in Toronto as a news producer, considered OMNI a “leader”. Now he is worried that Canada’s large South Asian community has lost a vital outlet to tell their own stories properly.

            “The mainstream media doesn’t cover the issues affecting the communities very well, unless it is a crisis like crime, but the other important things that happen in these communities don’t get covered,” Elder said.  “And many times when an attempt is made to tell those stories it’s distorted because people don’t understand those communities” the way OMNI journalists do, Elder explained.

            While Rogers has pledged to continue doing news in four other languages this isn’t the first time this year the company has made major changes in its ethnic programming. In January, 2013, Rogers re-launched its OMNI 2 channel in Ontario as an all-ethnic channel with “an increased focus on content geared towards the Asian and South Asian communities,” according to a Rogers news release at the time.

An online petition was launched that month, after OMNI cut its nightly Portuguese language news program.

            For Elder, ethnic-oriented news programming is important not only to tell diverse stories, but also to cover the mainstream issues of the day in a way that is relevant to the OMNI audience.