CRTC ushers in new world of digital TV with licensing of 21 Category 1 channels

The cable industry has scored a major breakthrough in its campaign to own more television channels, following a Dec. 1 CRTC decision granting digital specialty licences to three large cablecos. The commission’s decision to license 21 of 87 Category 1 applications – more than double the number initially suggested – is partly designed to entice cable operators to speed up their roll out of digital. "We’re very pleased that the CRTC followed through on what they said they would do, which is to allow cable operators to own equity in the new digital services," said Janet Yale, president/CEO of the Canadian Cable Television Association. "I think the CRTC felt we would be very focused on (rolling out digital) if we actually owned services." The CRTC awarded a licence for the Biography Channel to Rogers Communications Inc, Shaw Communications Inc and A&E. Rogers and Shaw, along with partner TechTv (formerly ZDTV), won another Category 1 licence for Techtv Canada. Cogeco Inc also scored a licence for its Issues channel in partnership with Stornoway Communications Inc. While there were some surprises in the licensing decision, industry analysts believe the CRTC took a balanced approach to choosing the winners. "The commission recognized that they had to licence services that Canadians are going to want to watch. As I look at the list, in most cases I think that’s the case," says Gerry Wall, an Ottawa consultant who helped Stornaway with its application. Stornaway is one of the new companies to enter the specialty TV business in Canada. Other new entrants are Halifax-based Salter Street Films and Triptych Media, which won the highly coveted independent film channel. Craig Broadcast Systems Inc was licensed for its youth channel Connect. Among the surprises in the ruling, were that Astral Media Inc and Alliance-Atlantis Communications Inc weren’t more successful. Astral failed to win a single Category 1 English-language channel, including its application for the Cinefest film channel. "In the commission’s wisdom, they wanted new entrants into the field," says Karen Spierkel, VP of Communications at Astral Media. Corus Entertainment, an affiliate of Shaw, got licences for two Category 1 channels which it had partnered on – The Canadian Documentary Channel and Land & Sea. "It was certainly part of our strategic plan to grow the specialty television business, so this is very good news for us in terms of long-range plans," states Corus’ director of corporate communications Kerry Morgan. Chum Television Ltd’s win of three Category 1 licences came as a surprise to several people. Despite filing sketchy business plans, few projections and little consumer research, it ended up with Fashion-Television, the French-language Perfecto, La Chaîne and BookTelevision, through Learning and Skills Television of Alberta, in which it has 60 per cent equity. Ironically, one Chum official believes it was their lack of projections that helped win their case. "Unlike others, we didn’t promise too much," says Peter Miller, VP of business and regulatory affairs at Chum Television. "One of the things we said very strongly (during the hearings) is that you can’t just take the high Cancon commitments and take them for granted if they are based on overly optimistic business models. You know that those services are going to run into trouble and they are going to come back two or three years from now and ask for a reduction in their Cancon level." BCE Media, with partners CTV Inc and TVA Group Inc got Travel TV, while The Sports Network, which is partly owned by CTV-owned NetStar Communications Inc, was licensed for the Women’s Sports Network. The licence is being viewed as somewhat of a gift to NetStar, which as part of its tangible benefits package to the CRTC promised more coverage of women’s sports. Part of that pledge is expected to shift over to WSN. "There’s a demand for a women’s sports network. We’re going to fill a void, create interest and build the profile of women’s sports," says Rick Brace, president of NetStar Sports (TSN/RDS). CanWest Global Communications Corp didn’t get the health channel it wanted, but it did win licences for the mystery channel 13th Street, its French counterpart 13ième rue, and Men TV. "We thought we had the strongest application; it’s all Canadian content and Canadian partners and we seem to be beaten out by a group that was partnered with an American team, so we were pretty disappointed. We don’t really understand the decision," said Dr. Michael Pezim, chair/CEO of Medbroadcast Corp, which partnered with Global on a health channel. "From a digital point of view, we have a strong web site; we’ve got substantial traffic and over 15,000 pages of mostly Canadian content." While Alliance Atlantis failed in its bid for its Independent Film and Documentary Channel, it was approved for Health Network Canada, the U.S. version of which is currently available in parts of Canada. Alliance Atlantis also holds a stake in the alternative lifestyle channel PrideVision, another Category 1 winner. Alliance Atlantis Broadcasting president Phyllis Yaffe says the U.S. Health Network channel would be converted into the newly licensed Canadian service, a strategy the company pioneered with its Food Network channel. "We always thought that one or two channels were the most we would get, so we are pleased with that," says Yaffe. French-language producer and distributor TVA is a partner in a number of Category 1 winners, including 13th Street, 13ième rue, Men TV, and the French-language channels LCN Affaires, Télé Ha! Ha! The CRTC also licensed two pay-per-view and four video-on-demand services.

CRTC ushers in new world of digital TV with licensing of 21 Category 1 channels

News | 12/07/2000 5:00 am EST

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