Any St. Anthony resident who has spent time at a football game or school play will recognize the logo of CTV, a community media channel that dutifully serves as nine north suburban cities’ public access option. Their main signal carrier is Comcast, with whom they have to enter a franchise negotiation every few years. After more than three years of deliberation, Comcast and CTV have entered a new agreement, one that means a major loss of funding for the small-time producer.
The news first went public during a St. Anthony City Council meeting at the beginning of October. Council member Hal Gray presented the facts to a small gathering of St. Anthony residents, explaining that some hard choices have to be made starting next year.
CTV’s main sources of funding come from the cities they serve, and from Comcast, which gives a grant every year to fund their operations. However, that grant doesn’t come directly from Comcast. Comcast subscribers pay CTV via a Public, Educational, and Governmental Fee (PEG fee, for short) on their bills each month. Previously, the fee was 5% of Comcast’s gross revenue, but now it has been reduced to 3%. The decrease in the PEG fee will not mean lower bills for Comcast subscribers; the cost will just be shifted to other charges on the monthly bill. While it may not seem like much of a change, CTV will lose 40 percent of its funding.
Council member Gray said that the city of St. Anthony may have to dip into reserve funds to keep CTV afloat, but assured residents that taxes would not go up to close the gap. Ultimately, the city doesn’t want to pour too many resources into what seems like a dying medium in the age of YouTube and self-made web content.
“It doesn’t make a whole lot of sense to be pouring money into something people might not be using,” said Gray. “That’s not to say that [CTV] isn’t good programming, though. I don’t want to make it seem like this is a bad deal, because it really isn’t.”
Coralie Wilson, executive director of CTV, agreed. CTV did have agency in this negotiation, and the loss of funding was offset by a gain of three new HD channels for the station to use. HD or “high definition” compared to analog television offers more detail, better color, and sharper images in a wider screen that mimics the viewers’ peripheral vision range, while occupying less bandwidth.
Wilson explained that the original franchise agreement with Comcast was due in 2013. CTV and Comcast have to periodically come to a new agreement with the city in order to continue broadcasting. The current franchise deal was established in 1998, and was set to expire years ago, but a series of legal debates delayed the process until now.
Normally, a public access station and a major cable company can hash out a franchise agreement in one of two ways: informally, or formally, the latter of which usually costs more money for smaller stations because lawyers and court hearings get involved. CTV’s legal costs were covered by their insurance, so they didn’t mind moving into the formal process after things stalled during informal negotiations. After three years in and out of court, during which the two broadcasters had to extend their current arrangement several times so they weren’t shut down, they finally reached a deal.
“It’s not uncommon to have it take three years,” said Wilson. “Especially these days, things have become so contentious, it’s not unusual for them to take even longer.”
The ultimate hangup in the deal was how much Comcast spent to support CTV. Comcast wanted to cut funding to funnel more money into their own enterprises, and CTV felt that the proposal didn’t meet the needs of the community. In the end, they reached an agreement that the PEG fee would be reduced, but CTV would gain access to more HD channels, one of which they already had and could continue to use, another of which they would gain immediately, and the third they would get in five years.
“They will dispute this, but Comcast really doesn’t like community television,” said Wilson. “It’s programming over which they have no control. We went into this process hoping to keep the grants that we had, but it was clear early on that they were going to hold fast.”
Wilson said that a 3% PEG fee was actually standard for most cities. In St. Paul, PEG fees are set to 2.5%, so until now, CTV had a good deal. With the loss of that money, CTV will have to turn to a new business model to replace it.
“In some respects, I think we did extremely well,” said Wilson. She admitted that PEG fees have struck her as being somewhat unfair. CTV broadcasts to more than just cable subscribers, yet cable users bear the brunt of their funding. Most of the time though, when people called to complain about the PEG fee, they were more than happy to pay for it when they found out that it supported local programming.
CTV may adopt a freelance approach to programming: offering their services for hire. They could hire out camera crews to cover events as a service to cities and schools, but for a price instead of free. There is precedent for this style of service; Columbia Heights contracts out city programming to North Metro Television, a community media company that records city hall meetings and other functions (the Northeaster worked with NMT when we hosted a council and mayor candidate forum during Heights’ last city election).
CTV has also considered offering sponsorships for school programming, or to include the price of filming concerts and plays in the ticket prices.
“Next year will be a really intense year,” said Wilson, explaining all the work that will have to be done to alter their business model. CTV has enough money in reserve to keep them going for two more years or so, but they will have to work on finding revenue now to keep things flowing smoothly.
Wilson said that she views this as an opportunity for the station to grow. They already offer web streaming services, and they can be found on Facebook, YouTube, and even have a channel that can be accessed by Roku TV (HDMI devices that can be plugged into a TV to access programming over the internet). CTV also offers classes on media literacy and television production, giving them an edge of relevance not limited to cable.
“That’s what we’ll be about in the next couple of years, honing in on the needs of the community and providing those services,” said Wilson, outlining her plan. “There’s a sense of community, I think, that we bring to the table. It can be challenging sometimes for suburban cities to create that sense, and community media is a way to make that cohesion and let people tell their stories.