The day local TV died

On Friday at 4pm, the station aired a 90-second statement from Channel Zero CEO Romen Podzyhun, explaining that the station would be undergoing a major restructuring and would eliminate a large part of its local programming, and the jobs that go with that. The amount of local programming would reportedly drop from 80 hours to 17.5 hours a week, a little more than most large-market local TV stations in Canada. (Its licence requires a minimum of only seven.)
Rather than have local original programming from 4am (they prided themselves on being the first on the air weekday mornings) to 7pm weekdays, they’ll be left with 6pm and 11pm newscasts starting Saturday, and the morning show starting Tuesday.
Other, non-news programming gets cancelled.

It’s hard to overstate how disappointing this news is, not just for people in Hamilton but for anyone who believes in local television. When CHCH was bought by Channel Zero in 2009 (along with CJNT in Montreal for a grand total of $12), it was already producing more than its fair share of local programming. But the new owners decided to gamble on the idea of expanding that even further, putting on local news throughout the day and airing movies or other bought programming at night. (That eventually turned into running fourth-rate American network shows that CTV, CTV Two, Global and City had no room for on their schedules.)
Local news is very expensive to produce, but CHCH would partly mitigate that through economies of scale and by not buying as much expensive programming from the U.S.
If anyone could make this idea work, it was CHCH, which rebranded itself as Canada’s superstation. And when it did work, we could see this new business model expand to other stations or even new stations. And we could throw it in the faces of the bigwigs at Bell and Shaw and Rogers and Quebecor and V who think cutting is the answer.

Changing economics

So why didn’t it work? Well, money, obviously. Podzyhun explained that national advertising revenue is in decline. According to the CRTC’s financial summaries, national ad revenue for over-the-air television stations declined an average of 5% a year from 2010 to 2014. (CHCH’s finances aren’t public, but it has been telling reporters that it was losing $130,000 a week, which is more than $6 million a year.)
But it wasn’t just the ad revenue decline. When the CRTC instituted the Local Programming Improvement Fund after the 2008 recession, CHCH was a major beneficiary. At its peak, the station got $5 million a year from this fund, that taxed all cable and satellite subscribers 1.5% of the price of their service. But the commission declared that the fund had served its purpose, and in 2012 it started phasing it out. The fund ended on Sept. 1, 2014.