CCR Update

January 8, 2003 Shaw drops Scream from its digital cable lineupShaw Communications Inc. pulled the digital specialty TV channel Scream from its digital cable lineup on January 2, sources tell Canadian Communications Reports. Putting Corus Entertainment Inc.-owned Scream into its digital lineup late last year without adding two unaffiliated digital channels put the cable operator in non-compliance with the CRTC’s five-to-one rule for the carriage of digital specialty channels (CCR, Nov. 22/02). The CRTC sent Shaw a letter asking the cableco to confirm by January 10, 2003 that it was in compliance with the rule (CCR, Dec. 13/02). Shaw told the commission that it had planned to launch two new Alliance Atlantis Communications Inc. digital channels, DIY and Fine Living, this month to put it in compliance. But Alliance Atlantis chair and CEO Michael MacMillan told Canadian Communications Reports that the channels wouldn’t be launched early this year (CCR, Dec. 5/02). Digital TV subscribers increase 4% to 3.2 million subscribers in Q3 2002: Decima Publishing researchThe number of digital TV subscribers in Canada rose 4% to 3.2 million subscribers in the third quarter of 2002, according to the latest report in Decima Publishing’s quarterly digital TV market overview report series. Trends include a continued slowing in satellite television growth, while cable companies inched forward in gaining digital TV market share. According to The Digital Domain: Tracking the Growth and Development of the Canadian Digital TV Market, satellite TV operators Bell ExpressVu LP and Star Choice Communications Inc. had 61% digital TV market share at August/September 2002, down from 62% at May/June 2002. Cable’s share was 37% at August/September, up from 36% at May/June. The report estimates that digital TV subscribers topped 3.4 million at December 31, 2002. For more details about the report, click on the banner ad at the bottom of our home page or contact Ryan O’Neill or Mario Mota at (613) 230-1984. Digital boxes in service up 45.2% at Rogers in 2002, according to preliminary year-end resultsDigital cable set-top boxes deployed by Rogers Cable Inc. rose 45.2% to 456,200 in 2002 from 314,100 in 2001, according to preliminary 2002 fourth quarter and year-end subscriber results released by the cableco. Rogers announced that net additions of digital boxes in the three months ended December 31 rose 35.9% to 37,600 in 2002 from 27,600 during the same period a year earlier. The cableco also reported having 401,500 digital households at December 31, 2002, up from 272,100 a year earlier. CRTC grants licence to second Whistler cable operatorThe CRTC has approved an application from David Reid for a competing cable system to serve Whistler BC – Broadcasting Decision 2003-5 (CCR, July 18/02). The Class 2 cable licence will expire on August 31, 2009. The CRTC ruled that granting the licence was consistent with its view that consumers should have increased choice among broadcast distributors. The application was opposed by the incumbent cable operator Whistler Cable Television Ltd., the Canadian Cable Television Association and the mayor of the resort town on the grounds that the proposed service would have a negative competitive impact on the incumbent cableco (CCR, Aug. 29/02). The applicant responded that the size of the market, given the tourist industry in the region, was not as small as it appeared when considering the roughly 48,000 beds in hospitality units, over and above the approximately 7,500 households in Whistler. Bell ExpressVu plans expanded channel lineup with launch of Nimiq 2Bell ExpressVu LP will expand its channel lineup this spring as a result of the launch of the Nimiq 2 satellite late in December, the direct-to-home (DTH) satellite TV distributor announced January 2. The new satellite capacity will be used to expand Bell ExpressVu’s high-definition TV offerings, add new Canadian local TV channels, new English-language and French-language specialty channels, third-language channels, as well as to expand its interactive TV offerings and roll out a video-on-demand service. The new digital channels to be added include Leafs TV, BBC Kids and MSNBC. "Nimiq 2 makes Bell ExpressVu the only Canadian DTH service provider with two dedicated, high-power DBS satellites," Bell ExpressVu president Tim McGee said in a media release. Nimiq 2 is owned by Telesat Canada and is being used exclusively by Bell ExpressVu. Both companies are owned by BCE Inc. Telesat will take possession of Nimiq 2 by February following standard in-orbit testing and will turn the capacity over to Bell ExpressVu by March 1. TSN’s coverage of World Junior Hockey Championship gold medal game strikes goldSpecialty sports network TSN’s live coverage of the Canada vs. Russia gold medal game at the World Junior Hockey Championships held in Halifax on January 5 drew the largest audience in the network’s 19-year history. The national average minute audience was 3.466 million viewers (aged 2+). Audience levels peaked during the final 30 minutes of the game at 4.158 million viewers. Telefilm to support 21 new media projects in 2002-03Telefilm Canada announced January 6 that it would support 21 of the 168 applications submitted by the September 23 deadline for new media funding. Five projects are new media television or feature film convergence projects, which offer tie-ins between television and film projects and such media as wireless products, interactive games and web sites. For a complete list of accepted projects, click here. Corus receives greater voting interest in Food Network CanadaThe CRTC has approved an application increasing Corus Entertainment Inc.’s voting interest in specialty TV channel Food Network Canada to 22.59% from 10% – Broadcasting Decision CRTC 2002-465. The transaction does not alter the control of Food Network Canada, which is still controlled by the licensee Alliance Atlantis Broadcasting Inc., which holds 57.61% of voting shares. The CRTC policy that restricted cable-affiliated ownership of analog channels to 10% of voting shares was altered in 2001 in Public Notice 2001-66 (CCR, Aug. 2/01; March 14/01; Feb. 28/01; Feb. 14/01). As a result, Food Network Canada has asked the CRTC to delete a condition of licence restricting Corus’ stake to 10% – Broadcasting Public Notice 2002-79. Canal Évasion is also seeking to have a condition of licence amended that restricts to 10% TVA Group Inc.’s stake in the French-language channel. TVA says the condition of licence is redundant with the change in the CRTC’s ownership rules for analog channels – Broadcasting Public Notice 2003-1. CRTC denies W.A.V.E.S. licence application, initiates proceeding on exemption ordersThe CRTC has denied the low-powered television licence requested by World Audio-Visual Entertainment Systems Inc. (W.A.V.E.S.) on the grounds that the Department of Industry hasn’t issued a broadcasting certificate – Broadcasting Decision 2002-467. The department says it can’t issue the certificate because W.A.V.E.S. has not filed the required technical specifications, since not all the events and locations it plans to broadcast are known. W.A.V.E.S. proposed offering an on-site broadcast service via wireless devices to spectators attending sporting and cultural events (CCR, May 23/02). Canada’s broadcasters opposed plans by W.A.V.E.S. to sell advertising during the broadcasts (CCR, July 4/02). In its decision, the CRTC stated that it is unable to issue a broadcasting licence unless the Department of Industry has issued a certificate. While not granting the licence, the commission did simultaneously begin a process looking at possible exemption orders. One of four exemptions proposed by the CRTC is for low-powered encrypted television: limited duration special event facilitating undertakings – Broadcasting Public Notice 2002-80. The three other proposed exemption orders are for radio undertakings for tourist and traffic information in national parks and on historical trails, atmospheric environment services from Environment Canada, and trucking/logging and road maintenance vehicles. The deadline for comments on the proposed exemption orders is February 18. W.A.V.E.S. has told Canadian Communications Reports that it has already received Federal Communications Commission approval and run a pilot in the United States (CCR Update, Nov. 28/02). CRTC issues proposed distribution regulations aimed at introducing regional licensingThe CRTC has issued proposed amendments to the Broadcasting Distribution Regulations in order to implement a regional licensing approach for cablecos – Broadcasting Public Notice 2002-81. The CRTC proposes that the amendments to the regulations come into force on the date they are registered. The commission intends to begin the process of renewing licences on a regional basis in 2003. The CRTC indicates that the process will begin in the Atlantic region, starting with Class 1 systems and any remaining licensed Class 3s. Application forms for those wishing to become regional licensees will soon be available on its web site, the commission notes. The CRTC had initially intended to implement regional licensing last year (CCR, April 12/02; Dec. 21/00). The commission will renew for a short-term the licences of cablecos in other regions. The CRTC also indicates that it will not proceed with the licence renewal of Class 2s until it has completed a process examining a proposal to extend the licensing exemption to include Class 2s – Public Notice 2002-62. Comments on the proposed amendments to the Broadcasting Distribution Regulations are due by February 6. Toronto One, Multivan get extensions for launchesThe CRTC has approved an extension for the launch of Toronto One, the new over-the-air TV station licensed to Craig Broadcast Systems Inc., to October 31, 2003 from April 8, 2003 – Broadcasting Decision 2002-453. As well, the new over-the-air ethnic TV station licensed to Multivan Broadcast Corp. for the British Columbia market has been granted an extension to August 31, 2003 from February 14, 2003 – Broadcasting Decision 2002-452. Extensions granted to launch national VOD servicesThe CRTC has approved a second request by Global Communications Ltd. for an extension in the time limit to launch its national video-on-demand (VOD) service The VOD service now must be operational no later than August 31, 2003 – Broadcasting Decision 2002-454. The commission has also granted an extension until December 14, 2003 to Corus Entertainment Inc./On-Demand Inc. to launch a VOD service – Broadcasting Decision 2002-455. Bell ExpressVu study attacks cable signal leakage, Vidéotron says it has one of the lowest piracy rates in QuebecSatellite TV operator Bell ExpressVu LP last month released a study that states that 4% of single family homes and 10% of multiple-unit dwellings of the 8.1 million Canadian cable households steal cable television service, costing cable companies over $400 million each year in lost revenues. The report, entitled Analysis and Estimate of Annual Lost Revenue Due to Theft of Service in the Canadian Cable Television Industry, also indicates another $128 million is lost annually through incorrect trap filtering and the theft of analog premium television services. The study was conducted by Pathlink Engineering on behalf of Bell ExpressVu. The release of the study follows comments by Bell Canada president John Sheridan that Bell ExpressVu was unfairly being singled out for TV piracy (CCR, Dec. 5/02). The problem of theft of Canadian TV signals is said to be the greatest in the province of Quebec because residents want French-language programming not available on U.S. satellite TV systems. Quebec’s largest cableco Vidéotron ltée responded that over the last five years it has spent $4.25 million on preventing signal leakage. The cableco noted that a program set up in 1997 has enabled it to cut the piracy rate to 1.5%, well below the estimated 18% experienced by satellite TV operators. Meanwhile, the same day as Bell ExpressVu released the study and Vidéotron defended the integrity of its system, the Federation des Cooperatives de cablodistribution du Quebec, representing 80 cable companies in smaller Quebec communities, condemned the unfair competition created by the piracy of satellite signals of Bell ExpressVu and other easy-to-pirate services. Headline Media restructures PrideVision operationsHeadline Media Group Inc. has been forced to initiate more cuts to its gay and lesbian digital specialty TV channel PrideVision TV, and is said to be seeking a buyer for the channel. "The operating performance of this subsidiary has been below corporate expectations as a result of slower than anticipated growth in the number of subscribers to its service," the company noted in a media release issued late last month. The restructuring follows previous programming and staff cuts (CCR, Sept. 26/02), and an unsuccessful marketing campaign called "Get it Up" (CCR Update, Nov. 13/02). Headline Media’s other specialty channel, The Score, has also experienced some financial difficulties, resulting in it paying $12 million to get out of a Major League Baseball deal. Sources tell Canadian Communications Reports that Headline Sports has asked for changes to the conditions of licence of the channel in its licence renewal application filed recently with the CRTC. The current licence expires in August, and its licence renewal application has not yet been gazetted. Competition Bureau announces it won’t investigate motion picture industryThe Competition Bureau announced last month that it won’t investigate any further the motion picture distribution and exhibition industry because a preliminary investigation "did not identify any anti-competitive activity." CRTC approves corporate reorganizations at Bell ExpressVu, RDS and TSNThe CRTC has approved a corporate reorganization at Bell ExpressVu that doesn’t change the overall control of the satellite TV distributor exercised by BCE Inc. – Broadcasting Decision 2002-468. The CRTC will issue new licences to Bell ExpressVu, the general partner, and BCE and Bell Actimedia Inc., limited partners, to carry on business as Bell ExpressVu Ltd. Partnership. The current licence is issued to BCE, the limited partner, and Bell ExpressVu, the general partner. In another decision, the commission approved an intra-corporate reorganization affecting Bell Globemedia’s sports specialty channels RDS inc and TSN Inc. – Broadcasting Decision 2002-449. Bell ExpressVu introduces described video serviceBell ExpressVu LP has created an enhanced video service for the blind and visually impaired, the satellite TV distributor announced last month. The service consists of a channel that provides narrated program descriptions and key visual elements such as scene changes, action, character gestures and costumes. "This is not only a technological achievement for Bell ExpressVu but a valuable development for an underserved viewership," Terry Snazel, VP of technology at Bell ExpressVu, said in a media release. CanWest settles with Citizen publisher Russell MillsCanWest Global Communications Corp. announced last month that it had reached a settlement with Russell Mills related to his dismissal as publisher of the Ottawa Citizen in June 2002 (CCR, June 21/02). Terms of the agreement were not released. CanWest let go the long-time publisher amid allegations of influence by the prime minister. The Citizen had run editorials calling for the prime minister to step down. CanWest denied the allegations of political influence. The dismissal led to calls for an investigation into media concentration in Canada (CCR, June 21/02). Telus chooses iMagicTV software to deliver its digital TV service Telus Communications Inc. has chosen iMagicTV as its software provider for the launch of its proposed digital TV service. iMagicTV and Telus have entered into a trial licence agreement for development and testing of iMagicTV software, prior to a commercial launch of Telus’ service. Telus has yet to receive a licence from the CRTC (CCR, Nov. 22/02). In other good news for iMagicTV, it was announced last month that French TV broadcaster TF1 had chosen iMagicTV’s Media Manager software to deliver broadband TV services in a field trial in Paris. iMagicTV also announced the release of its Media Manager 5.0 a day after the TF1 announcement. CRTC approves reorganization at AGI CablevisionThe CRTC has approved an intracorporate reorganization that sees the shares owned by Amtelecom Inc. in AGI Cablevision Inc. transferred to Information Communications Services (ICS), another wholly owned subsidiary of Amtelecom – Broadcasting Decision 2002-462. The transaction does not change the ultimate control of AGI, which will continue to be exercised by the board of directors of Amtelecom. AGI has licences for nine cable distribution undertakings in Ontario. OMNI renews 25 independently produced programsRogers Media’s OMNI Television has confirmed that all 25 independently produced programs currently broadcast on the ethnic TV channel have been renewed for the 2002-03 season. CBC offers archival collection free on Internet The Canadian Broadcasting Corp. has archived audio and video clips on its web site with the support of Canadian Heritage’s Canadian Culture Online Program. Paul Henderson’s famous 1972 Canada-Russia series wining goal and Terry Fox’s cross-Canada run to raise funds for Cancer research are among the images available free on the bilingual CBC archives web site. CBC opposes Bell ExpressVu-CAB out-of-market signal agreementThe Canadian Broadcasting Corp. opposes a proposed agreement between satellite TV operator Bell ExpressVu LP and the Canadian Association of Broadcasters (CAB) on the grounds that its proposed local programming fund would negatively affect the TV funds available through the Canadian Television Fund (CCR, Oct. 10/02). The CBC states in a media release that it also opposes a licence amendment sought by Star Choice on out-of-market signals, although Star Choice has stated in its submission to the CRTC that it is less committed to the local programming fund (CCR, Nov. 22/02). For a more detailed overview of the interventions in the CRTC process, see the upcoming issue of Canadian Communications Reports. BCE outlines guidance for 2003BCE Inc., the parent company of Bell Globemedia and Bell ExpressVu, released its 2003 financial guidance last month at its annual business review conference for financial analysts and media. The company is expecting total revenue of $19.3 billion to $20 billion in 2003. BCE expects satellite TV provider Bell ExpressVu to have between 1.45 million and 1.55 million subscribers by the end of 2003. The telco giant also reaffirmed its predictions for revenue, EBITDA and earnings per share for 2002, and announced it will cut jobs. Activity on Class A shares in Newfoundland Capital Dartmouth NS-based Newfoundland Capital Corporation Limited has acquired 15,000 of its own Class A Subordinate Voting Shares on the open market at an average price of $8.47 per share, the company announced January 3. Three days later, Blavin & Company of Scottsdale, Arizona said it had acquired 410,000 Class A Subordinate Voting Shares of the broadcaster to bring its share in Newfoundland Capital to 19.8% of outstanding shares of that class. Blavin & Company said in a media release that the shares were purchased for clients and not to acquire control of the company. Newfoundland Capital owns and operates 42 radio stations representing a total of 57 licenses across Canada, particularly in Alberta and Atlantic Canada. Learning and Skills Television gets administrative licence renewalThe CRTC has granted an administrative licence renewal to Learning and Skills Television of Alberta Ltd. as it didn’t have time to rule on its licence renewal application before the current licence expired. The licence has been extended under current conditions from January 1, 2003 to August 31, 2003 – Broadcasting Decision 2002-447. INTERNATIONAL NEWS Market share of U.S. cable industry declines: FCC reportThe U.S. cable industry saw its share of the broadcast distribution market fall in 2002, according to the Federal Communications Commission’s ninth annual report on competition in the market for the delivery of video programming. As of June 2002, 76.5% of all subscribers to multichannel video programming received it from a franchised cable operator, compared to 78% a year earlier. But the report notes that in the midst of competitive alternatives, cable TV is still the dominant technology for the delivery of broadcast programming to consumers, although its market share continues to decline, much like in Canada. The number of U.S. cable subscribers reached nearly 68.8 million as of June 2002, up about 0.4% from the 68.55 million cable subscribers in June 2001. "…A number of major cable system operators have experienced significant losses and calendar year 2002 may be the first in which the cable industry as a whole experiences a net loss of subscribers," the FCC notes. Cable industry making inroads on VOD promise: In-Stat/MDR reportAfter a decade of promising that video-on-demand (VOD) was imminent, the cable industry has launched VOD services in dozens of cities and metropolitan areas throughout the United States and Canada, the high-tech market research firm In-Stat/MDR reports. However, In-Stat/MDR cautions that VOD will largely be confined to North America for the next few years. "Until cable-based VOD services expand into Asia and Europe, we expect the total number of VOD users to remain relatively modest," says Mike Paxton, a senior analyst with In-Stat/MDR. The market research firm notes that about a third of all digital cable subscribers in the U.S. with access to a VOD service became regular users of the service. Tennis channel launches online petition in hopes of pressuring distributors into carriage dealsU.S.-based The Tennis Channel is asking potential subscribers to sign its online petition in hopes of pressuring distributors into carrying the channel. Among those who have signed the petition are Pete Sampras and Andre Agassi, who have ownership stakes in the 24-hour, all-tennis network. The yet-to-launch channel has signed a 15-year deal with Time Warner Cable. Time Warner, the second largest cableco in the U.S., will offer the channel on all of its systems as part of its digital sports tier. The channel was to launch this summer, but it has been delayed. More details.

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