Duopoly (broadcasting)

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A duopoly (or twinstick, referring to "stick" as jargon for a radio tower) is a situation in television and radio broadcasting in which two or more stations in the same city or community share common ownership.

In the United States[edit]

In the United States, the practice of duopolies have been frowned upon when using public airwaves, on the premise that it gives too much influence to one company. However, rules governing radio stations are less restrictive than those for television, allowing as many as six radio stations under common ownership in the largest U.S. markets.[1]

Duopolies that involved television stations with overlapping coverage areas were normally not allowed in the United States before 2001.[2] The Federal Communications Commission currently allows common ownership of two stations in a single market on the pretense that there are eight unique station owners left in the market once a duopoly is formed (making them not allowed in any market with fewer than nine full-power stations, counting non-commercial stations), and a duopoly cannot be formed between two of the four highest-rated stations in a market.[3]

Once a duopoly is formed, the company that assumes ownership of the secondary station (considered the "junior partner" in the duopoly, where as the station that a broadcasting company already owned prior to the formation of the duopoly is considered the "senior partner"), the new owner takes over the operations of that station as well. The operations of the two stations involved are consolidated into one facility, usually that belonging to the senior partner (although there are cases in which the senior partner's operations are merged into the studio facility housing the junior partner in the duopoly). The side effect that results is that since the stations involved in the duopoly are not restricted by FCC law from consolidating their operations, duplicative jobs at one of the stations are often terminated as the consolidation takes effect.

Similarly, if both of the stations maintained separate news departments prior to the duopoly's creation, they are often consolidated into a singular operation, resulting in the sharing of anchors and reporters for newscasts on both stations (including those previously employed with junior partner's news department prior to the creation of the duopoly); in some cases (like with WHDH and WLVI in Boston, Massachusetts, when the former's owner Sunbeam Television formed a duopoly with WLVI after purchasing the station from Tribune Broadcasting in 2006), even resulting in the complete shutdown of the junior partner's news department and subsequent takeover of news production by the senior partner.

The use of digital subchannels has been termed an "instant duopoly" because of the ease by which a single digital station can deliver multiple channels of programming from different networks into the same market at the same time. One station can carry four or more standard definition digital channels (multiple HDTV feeds are typically too large to be carried on different subchannels of the same station simultaneously without resulting in the loss of image quality).

Virtual duopolies[edit]

Some broadcasting companies have used loopholes to establish duopolies in smaller markets by way of a local marketing agreement or shared services agreement; where a station effectively brokers its entire airtime to another station in the market, who becomes responsible for handling its programming – and in effect, operations. These are termed as "virtual duopolies" as the station's license is held by one company, while its operations are handled by another.

Some larger broadcasting companies have controversially built business models around the practice by funding the acquisition of stations by what are effectively shill companies or shell corporations; for example, Sinclair Broadcast Group operates the stations of Cunningham Broadcasting and Deerfield Media under LMAs or SSAs. Nearly all of Cunningham's stock is held by trusts in the name of Sinclair's founders and owners, the Smith family.[4] Similarly, Nexstar Broadcasting Group funds the purchase of stations by Mission Broadcasting, who forms duopolies with their stations through shared services agreements with a Nexstar station.[5]

In some cases, the use of an adjacent-market city of license has been used on a secondary station to avoid a limit on the number of stations controlled by the same broadcaster in the same market. Occasionally, those arrangements cross international borders. For instance, radio station WLYK in Cape Vincent, New York in the United States is operated from the Canadian studios of Kingston, Ontario's CIKR-FM, a broadcaster already at the two-station limit in its own market, under an LMA.[6] Broadcasters such as Entravision have often entered into local marketing agreements with Mexican border stations (such as Tijuana's XETV-TV for content directed at San Diego).

Failing station waivers[edit]

It is also possible to obtain a "failing station waiver", which can exempt a broadcaster from some portion of the existing restrictions on common ownership in order to acquire and operate a station which otherwise would be economically non-viable or would be forced to cease operations.

Requests for failing station waivers have historically met with variable reception; in general, a prospective buyer is on the same wavelength with the FCC on failing-station policies if it can demonstrate to the Commission that:

  • The failing station consistently received less than 4% of all local all-day audience share,
  • The station is in poor financial condition, normally operating at a loss for at least the previous three years,
  • The merger will produce public interest benefits, and
  • The in-market buyer is the only suitable candidate as a sale to an out-of-market buyer would result in an artificially depressed price.[7]

Waivers under these criteria were granted to sell WASV-TV in Asheville to Media General, owner of WSPA-TV in that market,[8] and KWBA in Tucson to the Journal Broadcast Group, owner of that market's KGUN-TV.[9][10] A similar waiver was refused to KNIN-TV in Boise as the station appeared to have reasonable prospects of financial break-even without a takeover by Journal-owned KIVI-TV;[11] that decision was subsequently appealed.

Low-power TV stations[edit]

Low-power and Class A television services are not subject to ownership caps in the United States, as their over-the-air signals do not reach as many homes as regular stations. In high-penetration cable areas, this distinction is essentially meaningless. LPTV stations are also exempt from digital television transition requirements imposed on full-service broadcasters.[12][13]

As such, they can also be formed to create duopolies; for instance, Weigel Broadcasting maintains triopolies in three markets surrounding the southern part of Lake Michigan (Chicago, Illinois, Milwaukee, Wisconsin and South Bend, Indiana) using a combination of full-power and low-power television stations. In Chicago, it maintains one full-power signal (independent station WCIU-TV) and two low-power stations (WWME-CA and WMEU-CA, the flagship stations of the Me-TV digital subchannel network). In Milwaukee, Weigel has two full-power stations (CBS affiliate WDJT-TV and full-power independent station WMLW-TV) and two low-power stations (Me-TV station WBME-CD and WYTU-LD, a Telemundo affiliate, though that station uses a WMLW subchannel as their main conduit for cable carriage). Weigel also takes advantage of digital subchannel broadcasting heavily and airs their This TV and Bounce TV networks in both markets Previously it also executed time share agreements on other subchannels with ethnic broadcasters, and in Milwaukee, a local real estate agency to air programming.

A similar situation exists in Lima, Ohio, where Block Communications controls a quadropoly of stations owned by itself (WLIO, a full-powered NBC affiliate who carries Fox and MyNetworkTV on a digital subchannel) and low-power stations owned by West Central Ohio Broadcasting, Inc. (who owns ABC affiliate WLQP-LP/WOHL-CD, and CBS affiliate WLMO-LP) under an LMA. One of the latter company's heads, Allan J. Block, is the chairman of Block Communications.[14] The group is the sole over-air provider of secular network television programming in the Lima market, though area cable systems also carry out-of-town affiliates from Toledo, Columbus, and Dayton.

In Canada[edit]

Officially, Canadian Radio-television and Telecommunications Commission (CRTC) policy mandates that a broadcaster may only own one television station in a particular language in any given market.[15] However, there are two types of exemptions which may be granted:

  1. small markets, in which one or more stations may be in financial jeopardy due to limited advertising revenue;
  2. large markets, in which one or more stations may be in financial jeopardy due to audience fragmentation or the cost of programming rights.

The policy does not prevent companies from owning multiple stations in a market provided that the stations broadcast in different languages. In recent years, this has been interpreted as meaning that a single company may own both an English-language station and one or more multicultural stations with some English-language content, which in itself may be considered a form of "exemption". CBC/Radio-Canada owned-and-operated stations (O&Os) are also often deployed in pairs in major cities on both television and radio, separated only by language. Also, the policy is not interpreted as preventing a single company from owning both a "commercial" general-interest station and an educational station in the same market, even if the latter airs advertising, as with Access in Alberta.[16]

Although the small and large market exemptions have a financial criterion in common, there are notable differences between the two. A small market twinstick may involve major network affiliates licensed to the same community, and is not obligated to provide distinct local news programming on the two stations, while in a large market the stations must be licensed to serve different communities or different programming niches, and cannot merge their news programming into a single operation. Small market twinsticks commonly share their branding across both stations, while twinsticks in large markets generally do not. As well, while small market twinsticks generally involve private affiliates, major market twinsticks are virtually always owned-and-operated stations of their associated networks or systems.

In a few isolated cases, the CRTC has permitted "triple-sticks", or triopolies, where a single broadcaster operates three stations in a market. These are only possible under unusual circumstances which are discussed as they arise below.

History[edit]

Twinsticks were first allowed in 1967, as a way to help expand CTV service to smaller markets. In the original twinstick model, the second station was a rebroadcaster of a CTV station in a larger market, to which the small market's existing CBC affiliate would be granted the advertising sales rights.

As the company's advertising revenue grew, the CTV transmitter would eventually become an originating station in its own right, and in theory would eventually be sold to another broadcaster. However, in many cases the subsequent sale never happened, as the community's economic growth failed to lend itself to competition between multiple television broadcasters. In other markets where the CRTC had licensed competing broadcasters, such as Northern Ontario, twinstick mergers were subsequently allowed to permit the survival of both television stations after similar economic difficulties were encountered.

With the cross-national consolidation of media ownership, many of the original twinstick stations no longer share ownership with their former twin stations. However, the second type of twinstick, involving media consolidation in larger markets, began to arise in the 1990s.

Small markets[edit]

Up until February 2010, twinsticks of this type outside of Quebec involved CTV and CBC affiliates. Currently, the Lloydminster stations are CTV and CBC affiliates, while the Thunder Bay stations are Global and CBC affiliates.

Within Quebec, twinsticks may consist of any combination of SRC, TVA and V affiliates:

From 1997 to 2002, CTV directly owned several CBC twinstick stations it had inherited from Baton Broadcasting (CKNC, CHNB, CJIC and CFCL in Northern Ontario, which were part of the MCTV system, and CKBI and CKOS in Saskatchewan), but these were sold to the CBC in 2002.

One "triple stick" also exists, in which a single company, Télé Inter-Rives, operates all three licensed stations in Rivière-du-Loup: CKRT, CIMT and CFTF. An unofficial triple stick also exists in the Rouyn-Noranda area, as RNC Media, the licensed owner of that city's twinstick, also operates CFVS, the sole station licensed to the nearby city of Val-d'Or; in actual practice, all three stations serve both cities. These unusual situations arise because of the unique circumstances of francophone television stations in Quebec: with virtually no sources for syndicated programming, the stations are effectively constrained to network programming at all times, and both TVA and Radio-Canada maintain direct editorial control of local newscasts on all of their affiliates[citation needed] – meaning that despite being owned by a single company, the stations are still able to meet the guiding principles behind the CRTC's policies on media ownership.

As noted above, historically twinstick operations were locally owned. With the cross-national consolidation of media ownership in Canada, however, most twinstick operations are now owned by major media conglomerates. The Thunder Bay Television stations (CHFD/CKPR) are the sole remaining locally owned twinstick anywhere in English Canada. The aforementioned Télé Inter-Rives is similarly unique in Quebec, although it is itself partially owned by Quebecor.

Until August 2008, Cogeco owned three twinsticks in Quebec: CKTV and CFRS in Saguenay, CKSH and CFKS in Sherbrooke and CKTM and CFKM in Trois-Rivières. These twinsticks were dissolved when Radio-Canada decided to acquire its former affiliates (CKTV, CKSH and CKTM), while the V affiliates (CFRS, CFKS and CFKM) were acquired by Remstar Corporation, the new owner of V (then known as TQS).

Major markets[edit]

In the mid-1990s, the CRTC also began to allow private companies operating in large markets to acquire smaller stations. In all such cases, the twinsticks are permitted because a diversity of broadcast voices already exists in the market,[17] and the stations are normally licensed to serve different communities in the metropolitan market or different programming niches. The stations must also be operated independently of each other, although they are permitted to cross-promote each other's programming. They may also air a very limited amount of common programming, although in practice this privilege is rarely used.

Currently Bell Media operates twinsticks in three major markets, using the CTV and CTV Two brands:

In addition to these "true" twinsticks, in some areas, Bell Media has taken a twinstick-type approach with two stations deemed to be in adjacent media markets, but which in practice serve both markets. For example, Bell operates both CTV station CKCO-DT in Kitchener, Ontario and CTV Two station CFPL-DT in London, about 100 kilometres (62 mi) away. Both have been carried on the VHF band of basic cable throughout much of southwestern Ontario for several decades. Hence, presumably as a result of this duplicated coverage, their current owner has elected to continue airing distinct programming on both stations (on the other hand, Kitchener is also about 100 km from Toronto; nevertheless both CKCO and Toronto's CFTO operate as CTV stations).

Finally, in some markets, Bell Media operates both a local over-the-air CTV station, and a provincial or regional cable channel that broadcasts CTV Two programming. In Alberta, CTV stations CFCN Calgary and CFRN Edmonton co-exist with CTV Two Alberta, which is officially licensed as the provincial educational broadcaster and is therefore technically exempt from the CRTC's common ownership policy[16] (prior to September 2011, CTV Two Alberta also operated over-the-air transmitters in Calgary and Edmonton). In the Maritime Provinces, Bell Media operates both the over-the-air CTV Atlantic group of stations and the cable-only CTV Two Atlantic, which have been jointly owned (under various parent companies) since the latter's launch in 1983.

Previous examples[edit]

Canwest operated the CIII/CHCH twinstick in Toronto-Hamilton and the CHAN/CHEK twinstick in Vancouver-Victoria until 2009, under the Global and E! brands. These two sets of twinsticks were separated as a result of E!'s demise in August 2009, with Canwest retaining the Global O&Os (CIII and CHAN) and selling off the E! stations (CHCH and CHEK). Additionally, Canwest previously owned the now-defunct CHCA in Red Deer, which was available on cable and via rebroadcast transmitters in both Calgary and Edmonton, where Canwest already owned CICT and CITV respectively. This was not considered a true twinstick as CHCA was not based in the larger markets, and did not have permission to solicit local advertising in those markets. It did, however, have simultaneous substitution rights.

CHUM Television operated the CITY/CKVR twinstick in Toronto-Barrie and the CKVU/CIVI twinstick in Vancouver-Victoria under the Citytv and A-Channel brands prior to its acquisition by CTVglobemedia in 2006. Following this acquisition, Rogers Media briefly held twinsticks in Vancouver (CKVU and CHNU) and Winnipeg (CHMI and CIIT), formed from its newly acquired Citytv stations and its Omni-branded religious stations; these two sets of twinsticks were dissolved in 2008 following the sales of CHNU and CIIT to S-VOX.

Unlike the situation in smaller markets, this type of "consolidation" twinstick had been increasingly common up to the late 2000s, concurrently with the rise of secondary television systems (e.g. CH/E! and A-Channel) launched by their parent companies to complement their primary networks or systems (e.g. Global and Citytv). This trend was partially reversed in 2009 with the demise of E! and the subsequent dissolution of the Global/E! twinsticks.

Multiple languages[edit]

In many major markets, the Canadian Broadcasting Corporation operates both CBC Television (English) and Ici Radio-Canada Télé (French) stations, as listed below. Prior to the CBC decommissioning all of its TV rebroadcasters in 2012, both networks were available over-the-air in numerous other markets not listed below, but one or both of the transmitters was a rebroadcaster of a station originating in a different city; these were not usually considered true twinsticks. Nevertheless, both networks continue to be available as part of the basic service on all cable and satellite providers nationwide.

In Toronto, Edmonton and Calgary, Rogers Media's acquisition of the Citytv system put those stations in twinsticks with the multilingual Omni Television stations. In Toronto, Omni Television has its own twinstick, giving the company a nominal "triple-stick" in that market. The two Omni stations in Toronto each serve different segments of the market's multicultural audience, and thus are also permitted under the language exemption.

In Montreal, Canwest owned both Global station CKMI and multicultural station CJNT until August 2009.

CTV was formerly a part owner of the francophone V network (formerly TQS) in Quebec, meaning that V's owned-and-operated CFJP in Montreal was a partial twinstick with CTV's CFCF for most of the 2000s. CFCF was, in fact, the original owner of TQS, meaning that the stations were once a true twinstick under the language exemption, although the two stations went through very different sequences of ownership changes after 1995.

Triopoly and quadropoly[edit]

Until January 2011, NBCUniversal owned three full-power stations in Los Angeles; NBC O&O KNBC, Telemundo O&O KVEA, and former Spanish language independent KWHY-TV (now owned by Meruelo Group and affiliated with MundoFox).[18][19] Los Angeles and San Francisco are the only two U.S. markets which can have a full-power triopoly (three stations) as the FCC allows common ownership if 18 television stations are in the market.[20]

In 2013, through its acquisition of stations from Newport Television, Nexstar and Mission Broadcasting formed a full-power virtual quadropoly in Little Rock, Arkansas consisting of NBC station KARK-TV and MyNetworkTV station KARZ-TV (owned by Nexstar), along with Fox station KLRT-TV and CW station KASN (owned by Mission, operated by Nexstar under a local marketing agreement). All four stations were consolidated into KARK's facilities; 30 employees were laid off as part of the consolidation.[21] A similar virtual quadropoly in the Mobile, Alabama-Pensacola, Florida market was formed through another acquisition from Newport, this time by Sinclair, consisting of Pensacola-based ABC station WEAR-TV and MyNetworkTV station WFGX (owned by Sinclair and licensed to the beach community of Fort Walton Beach), along with Mobile-based NBC station WPMI and Pensacola-licensed independent station WJTC (owned by Deerfield, operated by Sinclair under a local marketing agreement). Unlike the quadropoly in Little Rock, Sinclair has not consolidated all four stations into one facility and each duopoly maintains their own studios in different parts of the market (WEAR/WFGX on the Florida side, WPMI/WJTC on the Alabama side).

In Canada, at least one community (Rivière-du-Loup, Quebec) has all three of its local French language stations, CKRT-TV, CIMT-TV and CFTF-TV, under common ownership, however such levels of common ownership are for the most part strongly discouraged unless the stations serve remote communities or are operated in different languages (such as a triopoly owned by Rogers Media in Toronto, consisting of the English-language CITY-DT and the multicultural stations CFMT-DT and CJMT-DT). In Mexico, media concentration is endemic and it is not uncommon for as many as four stations to be operated by one entity. Televisa owns four Mexico City stations (XEW, XHTV, XHGC and XEQ) while TV Azteca, Mexico's second-largest broadcaster, owns three (XHIMT, XHDF and XHTVM). These broadcasts in turn feed large numbers of full-power affiliates. The largest Mexican network is Televisa's Canal de las Estrellas which feeds more than one hundred stations nationwide.

See also[edit]

References[edit]

  1. ^ FCC revives local television ownership rules, US Federal Communications Commission, August 5, 1999
  2. ^ FCC grant of request for waiver of the duopoly rule for WCAU-TV (Philadelphia) / WNBC (New York City), July 25, 1995
  3. ^ The Business of News: A challenge for journalism's next generation, Cynthia Gorney, Carnegie Corporation of New York
  4. ^ Family's TV Clout in Bush's Corner, Howard Kurtz and Frank Ahrens, Washington Post, October 12, 2004, Page A1
  5. ^ Stelter, Brian. "You Can Change the Channel, but Local News Is the Same". The New York Times. Retrieved 30 May 2012. 
  6. ^ 102.7 The Lake WLYK
  7. ^ FCC application to assign the license for KNIN-TV (CW 9 Caldwell, Idaho) to Journal Broadcast Corp (KIVI-TV)
  8. ^ FCC application for assignment of WASV-TV, Asheville, North Carolina, Jan 15, 2002
  9. ^ Epic fail: FCC gives Tucson a "failing station" TV duopoly, ArsTechica, Matthew Lasar, June 3, 2008
  10. ^ FCC green lights sale of KWBA to KGUN owner, David Hatfield, Inside Tucson Business, June 6, 2008
  11. ^ Radio Business Report, Journal Boise duop dropped, November 9, 2008
  12. ^ http://www.dtv2009.gov/lowpower
  13. ^ FCC consumer facts: Low Power television service
  14. ^ "Phipps flips Lima low-power cluster". Television Business Report. November 29, 2008. Retrieved December 1, 2008. 
  15. ^ Decision CRTC 2000-221, para. 11
  16. ^ a b Broadcasting Decision CRTC 2007-165, para. 29
  17. ^ Decision CRTC 2000-221, para. 12
  18. ^ FCC decision on transfer of existing Telemundo O&O stations to NBC-Telemundo's TN Acquisition Corp, 2002
  19. ^ Szalai, George (26 January 2012). "NBC Universal to Sell LA Station KWHY-TV to Meruelo". The Hollywood Reporter. Retrieved 8 October 2012. 
  20. ^ "FCC adopts media ownership rules". CNN Money. June 2, 2003. 
  21. ^ "Almost 30 Lose Jobs at KARK, KLRT as TV Owners Consolidate". Arkansas Business. January 29, 2013. Retrieved January 29, 2013.