Canadian Television Network Ltd.(CTV), was incorporated in 1961 as Canada's first private television network. Unlike other North American networks, CTV has no owned and operated stations and controls no production facilities. Instead, CTV consists of major independent stations located in cities throughout Canada. As a result, it has a unique network structure which strongly affects its operations.

CTV is the most popular Canadian network with over 20% of the English-speaking audience, although this figure has tended to decline in the 1980s. It has also been accused by cultural nationalists and regulatory agencies of airing U.S. imports in prime time and relegating its few often inexpensive Canadian productions to off-peak hours. Although the network has produced relatively little drama or comedy, it has achieved some notable programming successes. In 1967, CTV launched the news magazine W5 which still enjoys excellent ratings. In 1972, it launched Canada AM which became the prototype for ABC's Good Morning America. Its news and sports programs have also enjoyed steady success, even at times surpassing the CBC. In the mid to late 1980s, CTV co-produced such highly successful drama as Night Heat and E.N.G. Ultimately, CTV's protestations that its achievements are under appreciated must be balanced against the view that it has failed to contribute fully to the development of national culture.

CTV's network structure has moved through three distinct phases. From 1961 to 1965, CTV was controlled principally by its founder, Spencer Caldwell. Having won the original licence, he planned to supply affiliates with 10 hours of programming per week: content acquired internationally, original content produced in the affiliates' stations, and content controlled by the affiliates but offered to the network. Caldwell hoped to increase the weekly hours until CTV rivalled the CBC.

Three factors prevented the realization of this plan. First, Caldwell underestimated the technological startup costs and was forced to seek loans from the affiliates. Second, the affiliation agreements worked to the detriment of the network since affiliates could demand network compensation even if the network had not managed to sell all of its air time. Third, as CTV supplied only 10 hours per week, the affiliates established a parallel acquisition service to fill another 24 hours. The ITO (Independent Television Organization) effectively competed against CTV and drove up prices.

By 1965, on the brink of bankruptcy, Caldwell sold out to the affiliates. Until 1993, CTV operated as a cooperative. As such, each affiliate became a shareholder in the network, each shareholder sat on the board of directors, and each held the power of veto over board decisions. Additionally, the network now provided 39.5 hours of programming per week, thereby obviating the need for the ITO which was abolished in 1969. Finally, affiliates could no longer demand compensation for unsold air time.

This structure introduced new tensions. First, the affiliates served highly differentiated markets and held correspondingly divergent views on appropriate programming. Second, as major local independents, affiliates derived as much profit from local market dominance as from network affiliation. Hence, they tended to their own profitability before the network's health, treating it at times as a necessary evil and approving only minimal operating budgets. Third, although the larger affiliates attracted a larger share of the audience, and therefore contributed proportionally more to network profits, they had only one vote and could be overruled. Four, some shareholders acquired more than one affiliate but were nonetheless restricted to a single vote. As a result, some shareholders lobbied for changes to the network structure. Finally, some shareholders owned stations unaffiliated with CTV thereby creating potential confilicts of interest, espeically as these stations sometimes competed against CTV for both program acquisition and market share.

CTV therefore failed to develop as a powerful network. Its weakness as a network curtailed its ability to produce Canadian content and therefore to meet the expectations of the Broadcasting Act.

In 1986, CTV's corporate structure came to the attention of the CRTC which introduced new conditions at the network's licence renewal hearings. For example, between 1987 and 1994, the CRTC instructed CTV to: (a) spend $C403 million on Canadian programming, (b) schedule 120 hours of Canadian dramatic features, miniseries and limited series in prime time, (c) provide 24 hours of Canadian musical programming, and (d) provide a minimum of 1.5 hours of regularly scheduled Canadian programming in prime time rising to 3.5 hours per week. CTV spent $C417 million, scheduled 126 hours of dramatic features, programmed 40 hours of musical content, and (d) requested that the minimum number of regularly scheduled dramatic hours not exceed three per week.

In January 1993, CTV instituted a new corporate structure. The network now operates under the Canadian Business Corporations Act. It consists of 7 shareholders who have each invested $2 million into the network. Board decisions are taken by majority vote with no party having a veto. Shares may be sold and transfered so long as they are first offered to the other shareholders. The network also provides 42.5 hours of programming per week and purchases air time from affiliates for a fixed annual sum.

 

This structure brings CTV closer to the American network model while maintaining some earlier features. For example, although CTV now compensates affiliates at a fixed rate, it still has no owned and operated stations. Indeed, it is the shareholders who control chains of stations and who are in the best position to operate as U.S.-style networks. Indeed, CTV's largest shareholder, Baton Broadcasting Inc., which owns 20 stations, has proposed to buy the network outright. In the absence of a positive response, Baton has created its own Ontario-based network, ONT (Ontario Network Television), and has taken away from CTV the rights to certain highly prized sporting events.

At this time, CTV's future appears uncertain as its strongest parts may strike out on their own. This possibility coincides with the accelerated fragmentation of the television audience. In 1990-1991, CTV registered its first and only annual loss. Nonetheless, CTV is turning towards more Canadian production and "big event" programming in the belief that these will emerge as distinguishing features in a television universe characterized by 500 or more channels.

-Paul Attallah