March 19, 2003 CRTC reviewing change in Category 2 digital channel application process following complaintsThe CRTC is reviewing its decision to require a commitment of carriage prior to examining and granting licences for Category 2 digital specialty and pay TV channels, following complaints by potential applicants (Broadcasting Public Notice 2003-14). To reduce the time it spends processing Category 2 applications, last year the CRTC began asking applicants to "provide clear evidence of a reasonable likelihood" of carriage (CCR, Oct. 10/02). But Category 2 applicants – particularly small, independent players – stressed that they needed commission approval for their channel concept before distributors would begin carriage talks. They also pointed out the gate-keeping role that could be played by distributors in selecting which Category 2 services they provided letters to, and that the new requirement caused problems for them in protecting their concepts prior to the gazetting of their applications.  The CRTC is asking for comments on the licensing of Category 2 channels, including the question: Is the requirement that a reasonable likelihood of carriage be demonstrated before an application is deemed to be complete the most appropriate way to balance the commission’s objectives of ensuring an open and flexible licensing framework, and making the best use of its resources? The CRTC also asks if there are alternative approaches that would permit it to better balance resource demands with the objective of a fair and more open-entry licensing framework. Comments are due by June 16. Star Choice raising prices on four programming packages on April 1Satellite TV distributor Star Choice Communications Inc. is raising the monthly price of four of its premium programming packages by $3 on April 1, according to information posted on the company’s web site. The English Platinum Choice Plus package (basic package, movies package, and nine specialty channel theme packages) will rise to $66.99 from $63.99; the English Titanium Choice Plus package (basic package, movies package, and 11 specialty channel theme packages) will increase to $71.99 from $68.99; and the English Ultimate Choice Plus package (basic package, movies package, and all specialty channel theme packages) will jump to $77.99 from $74.99. Finally, the Bilingual Diamant Plus (bilingual basic package, 11 specialty channel theme packages, and the movies or films package) will rise to $72.99 from $69.99. Star Choice competitor Bell ExpressVu LP will introduce a $2.99 monthly system charge for all customers effective April 28 (CCR, March 13/03). Despite intense competition, cable and satellite TV rates have been on the rise (CCR, Jan. 30/03). Star Choice inks five-year deal with OpenTVSatellite TV operator Star Choice Communications Inc. has inked a five-year licensing agreement with interactive television (iTV) software company OpenTV Corp. to use the company’s technology to launch iTV services. Star Choice will use OpenTV’s Core Middleware and Open TV Streamer to offer iTV services, which are expected to be launched in mid-2003. "Star Choice has always been committed to providing our customers across Canada with a rich, engaging television viewing experience and we’re pleased to add interactive services to our cutting edge digital service," Brad Shaw, senior VP of operations for Star Choice, said in a media release. Star Choice parent company Canadian Satellite Communications Inc. had announced an agreement in May 2000 with OpenTV rival Liberate Technologies to use Liberate’s iTV software. A news release announcing the deal indicated that Star Choice would begin deploying Liberate software early in 2001, but a launch has not occurred. Star Choice rival Bell ExpressVu LP also uses OpenTV software for its iTV services. Star Choice closing New Brunswick call centreSatellite TV distributor Star Choice Communications Inc. is closing its Fredericton NB call centre effective July 2 in a cost-cutting measure that will see 253 employees lose their jobs. With the closure of the New Brunswick call centre, all call centre operations will be carried out in Star Choice’s existing Montreal and Calgary centres. "By restructuring and aligning our operational resources, we are in a better position to succeed in a highly competitive environment," Peter Bissonnette, president of Star Choice parent company Shaw Communications Inc., said in a media release. "…Our decision today (March 12) was based on today’s economic realities and the need to streamline operations in order to expand our customer base and services in the most cost effective manner." Look Communications’ TV subscriber base continues to declineDigital wireless cable operator Look Communications Inc. saw its TV subscriber base decline to 46,500 at the end of 2002, according to fiscal 2002 fourth quarter and year-end financial results released last week. The company’s TV subscriber base dropped from 47,500 at September 30 and 60,000 at Dec. 31, 2001. The decline in TV subscribers comes despite contentions by Look president and CEO Paul Lamontagne that the company was on track to begin growing its digital TV subscriber base after nearly two years of decline (CCR, Nov. 7/02). Look says that it has adopted a more stringent policy regarding accounts receivable, leading to it dropping 8,120 non-paying TV subscribers and more than 10,000 delinquent dial-up Internet subscribers. Shutting off non-paying customers represents about 40% of the net decrease in total subscribers in 2002. At the end of 2002, the company had 96,500 Internet subscribers, including 82,500 residential dial-up customers, 2,600 residential high-speed customers and 11,400 business customers. The company also noted that it was successful in 2002 in launching several new digital specialty TV channels and migrating TV customers to higher-value packages, resulting in higher average revenue per subscriber. New bundled packages comprised of TV and high-speed Internet services were also introduced to the market.  Vidéotron adds four more digital specialty channels to lineupQuebec cable operator Vidéotron ltée has added four more digital specialty TV channels to its digital cable programming lineup – Lonestar, DejaView, Scream, and Drive-In Classics. A free preview of the channels runs until April 15. Vidéotron and striking workers making progressMedia giant Quebecor and the Canadian Union of Public Employees (CUPE) say talks are continuing and that an end to the 10-month-long strike by 2,200 workers at Quebecor subsidiary Vidéotron ltée is getting closer. On March 11, both Quebecor and CUPE stated that they were close to reaching an agreement in principle for a new contract. CRTC approves licence amendment calling for separate accounts for Country CanadaThe CRTC has approved a licence amendment that requires the Canadian Broadcasting Corp. to maintain separate accounts for the Category 1 digital specialty TV channel Country Canada. The purpose is to ensure that the channel, funded primarily through subscriber fees, is not underwritten by the public broadcaster’s parliamentary appropriations (Broadcasting Decision 2003-96). Corus Entertainment Inc. sold its 70% ownership stake in the channel to the CBC for an undisclosed amount in July 2002 (CCR, Aug. 15/02). Another new condition of licence approved, which was requested by the CBC, is that at least 80% of the programming aired on the channel be Canadian by the end of its seven-year licence term, up from 60%. Audio-visual unions call for CRTC hearing on Canadian drama A coalition of audio-visual unions is recommending that the CRTC hold a proceeding on Canadian drama this year, following the release of a report being prepared by broadcast veteran Trina McQueen (CCR, Feb. 13/03). The suggestion was included in a report on drama, which contains a number of short- and long-term recommendations, prepared by the union coalition. Other short-term recommendations contained in the report include not diluting the contributions of broadcast distributors to the Canadian Television Fund, and requiring broadcasters to broadcast at least two hours per week of 10-point Canadian drama. The report also suggests allowing the 150% credit in priority programming to be applied not only to the eight hours a week of priority programming during prime time, but also to the 50% Canadian content requirement during evening hours. "The effect of this would be to allow an extra half hour per week of U.S. simulcast programming to be broadcast for every new 10-point Canadian drama that is run in prime-time that week. This is a major financial incentive for broadcasters to commission 10-point Canadian drama," states the report, entitled The Crisis in Canadian English-language Drama. The coalition also wants specialty broadcasters to be able to air new Canadian dramas. The report notes that many specialty services, such as TSN, The Discovery Channel, and HGTV, are prohibited from airing any Canadian drama. The coalition also wants broadcasters’ financial information to be released, as well as the scheduling of priority programming by major station groups. Among the long-term recommendations made are a review of drama expenditure requirements, and having licence renewal hearings for CBC, CTV and Global in early 2005. As well, the coalition wants CRTC priority programming rules tightened so that a certain percentage of prime-time Canadian priority programming be drama, and that the number of hours of dramatic programs that must be aired during peak periods be first-run shows and that they be calculated on a quarterly basis. The report points out that the amount of priority programming aired by private conventional broadcasters from September to November was well below the eight hours per week. "It is likely that the shortfalls are and will be made up in the summer period when viewing levels are significantly lower," the report states. The coalition of unions consists of the Alliance of Canadian Cinema, Television and Radio Artists; American Federation of Musicians; Association des réalisateurs et réalisatrices du Québec; Syndicat des techniciennes et techniciens du cinéma et de la vidéo du Québec; Directors Guild of Canada; Société des auteurs de radio, télévision et cinéma; Communications, Energy and Paperworkers Union of Canada; Writers Guild of Canada; and Union des artistes. An executive summary of the report is available here. Alliance Atlantis cuts 33 jobs at Entertainment GroupAlliance Atlantis Communications Inc. announced on March 18 that it was cutting 33 permanent full-time positions from its Entertainment Group. The staff reductions, amounting to 4% of the company’s overall workforce, will be implemented by March 31 and are in line with production level reductions. The streamlining will also see Peter Sussman, CEO of the Entertainment Group, relocate from Los Angeles, where he has been based since 1991, to Toronto. He will continue to run Alliance Atlantis’ Los Angeles office. The Score asking for rate increase in licence renewalHeadline Media Group Inc.’s The Score specialty TV channel has asked for a wholesale rate increase in its licence renewal application to the CRTC, senior VP David Wetherald said at the company’s annual meeting at the end of February. The application, which has yet to be gazetted, is one of numerous licence renewal applications filed by specialty channels initially licensed in 1996. Cash-strapped Headline Media, which also operates the digital channel PrideVision TV, noted that its wholesale rate is much lower than the $1.07 per subscriber per month paid for TSN, and the 78 cents paid for Rogers Sportsnet. The Score’s current wholesale rate is 10 cents. VisionTV was unsuccessful in getting a wholesale rate increase during its recent licence renewal. However, just months after being denied an increase by the CRTC, it submitted a licence amendment asking for a 3-cent wholesale rate increase. In a contentious decision, it was awarded a 2-cent increase (CCR, Jan. 30/03). The Score’s proposal is expected to be met with opposition by broadcast distributors, particularly Vidéotron ltée. The Quebec cable operator has already used the TVA licence renewal and the Vision TV licence renewal processes to ask the CRTC to make the cost of specialty channels more affordable (CCR Update, March 5/03). CRTC retains exemption order for teleshopping channels, revokes exemption orders for experimental VOD, video games programming servicesThe CRTC has retained an exemption order for teleshopping channels, with a few minor changes, while revoking the exemption orders for experimental video-on-demand (VOD) and video games programming undertakings (Broadcasting Public Notice 2003-11). The exemption order for experimental VOD undertakings was to permit a limited field trial to test and develop the technology. But the CRTC ruled that its licensing framework for non-experimental VOD has made the experimental VOD exemption order unnecessary. The video games programming exemption was aimed at providing cable subscribers with software and related information to select and play video games at their premises. But in comments to the commission, Telus noted that there are no broadcast distributors currently providing video games services, and stated that the Internet, not cable, has emerged as the distribution network of choice for video games. Thus, the CRTC revoked the exemption order because it is satisfied "that the video games exemption order no longer has any practical application or purpose." Application filed for decertification of Shaw unionized employees in VancouverAn application for decertification has been filed for local 60 of the Telecommunications Workers Union (TWU), which represents Shaw Communications Inc. workers in Vancouver. The application was made on March 5 and asks that the TWU be removed as the union at Shaw Vancouver. The Canada Industrial Relations Board has to be convinced that a majority of members wants the union decertified before the process is finalized. "The executive of Local 60 urges members to remain calm, conduct yourselves as usual, seek factual information about decertification and its implications, watch the notice board for updates, and plan to attend upcoming union meetings," states a notice posted on the union’s web site. "…Complaints against the union include many of the usual myths and fabrications favoured by anti-union agitators." The next regular meeting of the union is March 26 at the Kings Inn in Burnaby BC. Torstar Corp. acquires 100% ownership of Toronto.comTorstar Corp. has acquired Sympatico Inc.’s 50% interest in toronto.com to bring its ownership in the online city guide to 100%. "Toronto.com fits perfectly with our strategy of being the leading media company in Toronto and southern Ontario," Torstar president and CEO Robert Prichard said in a media release. CTF changes spring and fall funding envelopes for French-language documentariesThe Canadian Television Fund’s (CTF) Licence Fee Program will increase funding resources for French-language documentary programming to 70% from 65% for the spring envelope, and decrease it to 30% from 35% for the fall envelope. The English-language documentary envelope will remain at a 65/35 spring/fall split. The CTF also announced that it had received 370 funding applications with a total demand of $291 million by its February 12 application deadline. There were 9% fewer applications and 2.5% less in demand compared with the spring of 2002. "However, demand still exceeds the funds the CTF will have available," it is noted in CTF’s March 2003 newsletter. The CTF’s projected revenues for all of the 2003-2004 fiscal year will not be more than $240 million. MuchMusic has Molson sponsorship for wireless concert listings serviceCHUM Ltd.’s MuchMusic specialty TV channel began offering concert listings via wireless text messaging in eight Canadian cities on March 17. Molson Canadian is sponsoring the wireless concert listings service. Viewers can register for receipt of the SMS text messages at www.muchmusic.com. More details. FT-FashionTelevision signs new deals, renews old onesCHUM Television International has renewed deals and signed new ones to extend the reach of its FT-FashionTelevision program into Asia Pacific, the Middle East and Europe. A deal was renewed with Chinese infotainment channel China Entertainment Television Broadcast Ltd. to continue to make the fashion program available to 33 million households in South East Asia in Mandarin Chinese. Australian broadcaster XYZ has renewed for 34 episodes for airing on the pay TV station Arena. New deals were also inked with Philippine broadcaster ABS-CNB Broadcasting Corp. to broadcast FTChannel’s The Review 2002/2003, and for FT-FashionTelevision to air on Belgian cabler Vitaya. As well, In-Flight Productions has picked up the program for broadcast on Hong Kong’s regional airline, Dragon Air. U.S.-based E! Networks has also renewed FT-Fashion Television for its fourth season, bringing the program to viewers across the United States and parts of the Caribbean. Steady increase in revenues and spending for private radio broadcastersCombined AM and FM radio revenues for private broadcasters rose 17% to $1.1 billion between 1998 and 2002, according to CRTC statistics released today. At the same time, spending increased by 13.4% to $884.7 million in 2002 from 1998, according to the report Private Radio: Statistical and Financial Summaries 1998-2002. Revenues at Canadian FM stations rose 31.4% over the five-year period, due primarily to a 39.5% rise in local advertising revenues. Fifteen new FM stations went on the air in Ontario, Saskatchewan, and Alberta in 2002. The situation was not good for AM radio stations, which saw their revenues decline by 9.8% in the five-year period and by 2.8% from 2001 to 2002.  Rooney, Ramsay tapped as keynote speakers at CCTA’s Cable SummitCox Communications senior VP of marketing Joseph Rooney will give the keynote speech at the Canada Cable Television Association’s Cable Summit this April. He will speak on April 28 during the conference, running April 27-29 in Toronto. TiVo Inc. co-founder, chair and CEO Michael Ramsay will also give a keynote address. INTERNATIONAL NEWS  CanWest’s Australian TV network completes private placement of US$125 million in unsecured notesCanWest Global Communications Corp.’s Australian TV operation Network TEN has placed US$125 million senior unsecured notes in the U.S. private placement market at a rate of 5.38% over ten years. The amount is US$25 million more than the US$100 million the company was initially seeking. TEN’s executive chair Nick Falloon said the offering was well received and significantly oversubscribed.  HDTV on rise in the United StatesAn increasing number of Americans have high-definition (HD) television, according to the National Cable and Telecommunications Association (NCTA). At the end of February, 73 of the top 100 designated market areas – including 17 of the top 20 – were served by at least one cable operator offering high-definition programming. In terms of numbers, more than 45 million U.S. television households were passed by a cable system offering HDTV programming. The NCTA said that represents growth of 20% since the beginning of the year.  Digital plant upgrades in U.S. almost completeU.S. cable operators have almost completed infrastructure upgrades and are now focused on fine tuning their digital services, according to a recent In-Stat/MDR survey. Nearly 90% of surveyed respondents already offer digital video programming and high-speed data services with cable modems. "Even as digital cable services become more widely available, there is still plenty of room for U.S. digital cable service subscriber growth," says Gerry Kaufhold, a principal analyst with In-Stat/MDR. "In-Stat/MDR’s survey highlights that the current median penetration rate for digital cable services is only between 21% and 30% of total system subscribers. This leaves plenty of room for continued long-term growth for digital cable TV." Enron executives charged in Internet VOD fraudAmerican authorities have charged two Enron executives with fraud over an Internet video-on-demand (VOD) project. The Justice Department alleges that Kevin Howard and Michael Krautz created US$111 million in bogus earnings based on a 20-year contract with Blockbuster from the company’s failed Internet VOD service. The two executives allegedly created a structured financial deal that would allow the company to immediately recognize future earnings from the deal. They reportedly created a joint venture to implement the Blockbuster deal and sold it and the projected future revenue stream to the Canadian Imperial Bank of Commerce. The Blockbuster contract, which was terminated in March 2001, never generated any money. If convicted, the pair could face up to 25 years in prison. DirecTV Latin America files for bankruptcy protectionDirecTV Latin America, LLC announced on March 18 that it had filed for bankruptcy protection. The move comes two months after parent company Hughes Electronics Corp. said it would consider filing for bankruptcy protection if it couldn’t restructure agreements with its lenders, programmers and suppliers. Yahoo to launch online video serviceInternet portal Yahoo plans to launch an online video service in the United States consisting of a package of news, sports and entertainment channels for $9.95 a month. One of the main draws of the streamed video service will be the early games of the annual NCAA college basketball competition, according to Yahoo.