Small upstart broadcaster claims Movieola diginet is already making money

A small upstart broadcaster claims to be making money from its Category 2 digital specialty TV channel Movieola. "We’ve been cash flow positive for 18 months," says Cal Miller, VP and CFO of Channel Zero Inc., which operates the short film channel and Silver Screen Classics. "We’ve had realistic expectations of the channels from the start. Our projections were much more conservative than a lot of the other channels were initially. We’re a small, lean operation," he says. If Miller is right, then he’s proving wrong the incumbents who stated that an existing infrastructure and cross-branding from established conventional television stations and specialty channels was a key ingredient to making it in the digital channel world. The official launch party of Silver Screen Classics was held recently and it is currently on free preview on Bell ExpressVu LP and on Rogers Cable Inc. The channel is also available on some smaller systems, such as NorthwesTel Cable Inc., Manitoba Telecom Services Inc., and Westman Communications Group (CCR Update, Sept. 24/03). Miller says Channel Zero’s broadcast centre can be upgraded to include more channels as desired. He tells Canadian Communications Reports that the company has submitted an application to the CRTC for a third Category 2 digital channel. He would not give specifics about the channel until the application is gazetted. "We don’t want to start channels just for the sake of it," he states. "But we’ll launch as many channels as we think will be profitable." He adds that Channel Zero has been able to make a go of it because the company’s smaller size allows for flexibility. There are 10 employees working on the two channels, he says. For the most part, Channel Zero has remained out of the limelight, except for a very public break with Stornoway Communications LP (CCR Update, April 3/02). Stornoway and Channel Zero had formed a partnership prior to the launch of Movieola in September 2001, with the four partners in Movieola apparently on the Stornoway payroll. But as Stornoway’s own two digital channels - i channel and bpm - struggled, the company cut staff, including three of the employees working on Movieola. That’s when Miller and his partners pulled up stakes. Channel Zero also has a Category 2 licence for RetroTV, but Miller says that the company has decided not to launch it as originally conceived because the "space is a little crowded" with Global Television Network’s DejaView and Craig Media Inc.’s TV Land already on the digital dial. Paperwork was filed with the CRTC and RetroTV was rebranded Silver Screen Classics, with commission approval for the new channel coming on September 23. The change in focus was sparked by focus groups, in which TV viewers indicated that they wanted the opportunity to see old movies, Miller says. He further notes that since the company had initially intended to launch RetroTV, discussions had proceeded at an early date with distributors. Those discussions shifted from carriage of RetroTV to that of Silver Screen Classics. The Silver Screen Classics licence allows the channel to carry "Golden Oldies" feature films and "B" movies spanning all genres. So far, Miller says about 1,000 movies, including those of Buster Keaton and Charlie Chaplin, have been acquired for Silver Screen Classics. There have been concerns expressed by some in the industry about the channel’s ability to fulfill its Canadian content requirements due to a limited library of domestic films from the 1920s to 1930s. But Miller says Silver Screen Classics has managed to acquire some Canadian programming from that era, including footage from the Canadian Pacific Railways’ library. The rest of the Cancon requirements can consist of "B" movies, which according to its licence must be 30 years old, and therefore can come from as late as 1973. That would mean that some of Silver Screen Classics’ schedule may be similar to that offered on CHUM Ltd.’s "B" movie channel Drive-In Classics, which is apparently close to breaking even (CCR, Nov. 28/03). Peter Miller, CHUM’s VP of business and regulatory affairs, says that is simply the nature of the digital environment.

Small upstart broadcaster claims Movieola diginet is already making money

Broadcast | December 10, 2003

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