CCR Update

January 7, 2004 Rogers expects to add about 100,000 digital households in 2004Rogers Communications Inc. stated that its Rogers Cable Inc. subsidiary expects to gain between 100,000 and 120,000 net digital cable households by the end of 2004. The company also noted January 5 in its release of selected preliminary fourth-quarter subscriber results and initial 2004 guidance that it added 43,200 net digital households in the three months ended Dec. 31, 2003, bringing the total number of digital households to 535,300. Rogers expects basic cable subscriber levels to be flat or decline by up to 1% in 2004. Regardless, Rogers Cable anticipates generating revenue of about $1.91 billion to $1.95 billion and having an operating profit before management fees in the $710 million to $730 million range for the full 2004 fiscal year.Rogers reaches agreement with former Cable Atlantic shareholdersRogers Communications Inc. announced December 22 that it had reached an agreement with the former shareholders of Cable Atlantic regarding a disagreement surrounding its $232-million purchase of Newfoundland-based Cable Atlantic in February 2001. Terms of the settlement were not disclosed. In January 2003, Rogers filed a lawsuit seeking the court’s help in interpreting a portion of the purchase agreement. Rogers paid for Cable Atlantic partly with Rogers shares, but its share price declined drastically since the purchase agreement. There was disagreement over interpreting the agreement to determine how many new Rogers shares should be issued to the former Cable Atlantic shareholders to make up for the decline in the value of the stock.Star Choice to add 18 new TV channels by end of February 2004Direct-to-home (DTH) satellite TV distributor Star Choice Television Network Inc. will add 18 new TV stations, including two additional high-definition channels, to its channel lineup by the end of February 2004. Many of the TV channels that are being added, such as CTV’s Kenora station (CJBN), CBC’s Kamloops station (CFJC), Radio-Canada’s Ottawa station (CBOFT), have been mandated by the CRTC. In a ruling dealing with out-of-market TV signals, the CRTC mandated that both Star Choice and Bell ExpressVu LP would have to add more small-market stations to their channel lineups by December 31, 2003 (CCR, July 31/03). Star Choice applied for an extension to the deadline, stating that it didn’t have the satellite capacity until the launch of its Anik F2 satellite. But the CRTC on December 5 ordered Star Choice to have the signals in its lineup no later than Feb. 29, 2004, or 30 days after the launch of its Anik F2, whichever came first (Broadcasting Decision 2003-596). Star Choice will likely drop some pay-per-view channels to make room for the small-market stations. Star Choice also said that even more stations would be added this summer, after the Anik F2 goes into service. The DTH operator also announced that it would offer a new digital video recorder (DVR) satellite receiver, the Motorola DSR530, to customers in the latter half of 2004. It had previously announced that the receiver would be offered by the first quarter of 2004.Cogeco Cable to introduce PVR early in 2004Cogeco Inc. indicated last month that its Cogeco Cable Inc. subsidiary would offer a personal video recorder (PVR) that includes high-definition TV capability early in 2004. Cogeco will offer its customers the DCT-6208, the same Motorola box that Utica ON-based Compton Communications introduced in November 2003 (CCR, Nov. 28/03) and that other cablecos including Shaw Cablesystems plan to introduce soon.Unions condemn Alliance Atlantis’ decision to close Slater StreetThe Canadian Coalition of Audio-Visual Unions has criticized Alliance Atlantis Communications Inc. for closing Salter Street Films, and for getting out of the domestic film and TV production business. “A Canadian company like Alliance Atlantis shouldn’t be able to buy up independent production houses, the engines of our production industry, and then pack up and abandon their commitment to the Canadian industry after being nurtured for years by government support,” said Pamela Brand, national executive director of the Directors Guild of Canada, which belongs to the coalition. Alliance Atlantis bought Salter Street in 2001, primarily because it had been awarded a Category 1 digital specialty TV channel licence for the Independent Film Channel (CCR, Dec. 19/01). Alliance Atlantis announced December 10 that it was conducting a “wide-ranging review” of its Entertainment Group, and that it would reduce its staffing levels by between 60 and 70 positions, and close certain offices. The review did not include its CSI franchise. Among the people to go are Entertainment Group CEO Peter Sussman and Seaton McLean, president of the group. “This is the next logical step in our clearly articulated strategy of reducing our financial and operational exposure to the production business and focusing on the abundant growth opportunities in the broadcast and motion picture distribution sectors,” Alliance Atlantis chair and CEO Michael MacMillan stated in a media release. It is the second round of cuts at the production unit, with the first coming last March (CCR Update, March 19/03). Last year, MacMillan told Canadian Communications Reports that the reduction in domestic production was a reaction to trends in the marketplace.CBC workers choose to go with Media GuildUnionized workers at the Canadian Broadcasting Corp. have voted to be represented by the Canadian Media Guild, ending a long battle between it and the Communications, Energy and Paperworkers Union of Canada (CEP) (CCR, Jan. 30/03). In a vote ordered by the Canadian Industrial Relations Board, 58% voted for Guild representation and 42% for representation by the CEP. Some 30% of CBC employees, many technicians, were members of the CEP and 70% were represented by the Guild. The CBC asked to deal with one union for its English-language operations as it moves toward more integrated newsrooms.Bell ExpressVu launches multicamera iTV service for CBC NHL hockey broadcastsSatellite TV provider Bell ExpressVu LP has introduced a new iTV service that allows viewers to choose from alternative camera angles and video feeds of NHL hockey games broadcast by the CBC (CCR, Oct. 16/03). Dubbed Hockey Night in Canada Plus, the new iTV service available on channel 276 launched with the December 20 Hockey Night in Canada double header. The new iTV application is on free preview until January 10, and afterward will be priced at $4.99 per regular season game, and $7.99 per playoff game, or $109.99 for the entire regular season and the playoffs. Viewers have access to the Alternative-Cam (view from around the nets), Player-Cam (coverage of individual players), Second Look Cam (a video stream with a 45-second delay), Highlights (a continuous loop of highlights from the game), Stats, and Menu (shows the game on a primary screen while providing the alternative feeds and camera angles).CRTC calls for satellite radio applications; CBC partners with SIRIUS in satellite radio ventureThe CRTC has put out a call for applications for a licence to operate a subscription radio programming undertaking, following the receipt of applications for such a service (Broadcasting Public Notice 2003-68). While the CRTC didn’t identify the companies that filed applications, both XM Satellite Radio Inc. and Sirius Satellite Radio Inc. have already said they submitted, or would soon submit, applications with the commission. Sirius will form a joint venture with the Canadian Broadcasting Corp. and XM will work with Canadian entrepreneur John Bitove.Rogers invests in CTV’s Dome Productions to help boost HDTV contentRogers Broadcasting Ltd. has signed an agreement to invest in 50% of CTV Specialty Television Inc.’s mobile production and distribution business, operated through Dome Productions Inc. The partnership will grow and expand as it invests in and operates high-definition (HDTV) production equipment, the two parties indicated.UBS exercises option that gives it majority control of LookUnique Broadband Systems Inc. announced December 30 that it had exercised its fully-paid option to acquire ownership of the remaining shares held by Telesystem in wireless cableco Look Communications Inc. The acquisition of the shares, representing 21.16% of the outstanding common shares of Look, gives UBS control of Look with a 51.06% stake in the company. Craig Wireless International Inc. is also vying for control of Look (CCR, Oct. 31/03).Groundbreaker Fund-supported Corner Gas premieres January 22 on CTVCorner Gas, a new 13-part comedy series set at a gas station in the fictional town of Dog River SK, will air Thursdays at 8 p.m. on CTV, beginning on January 22. The multimillion-dollar series stars comedian Brent Butt and was supported by the controversial Groundbreaker Fund (CCR, July 17/03, Oct. 24/02). The show will have a complementary web site (www.cornergas.com), on which viewers can become virtual residents of Dog River and seek a spot on the show, become mayor of the online community, or win a piece of Saskatchewan.1.9 million Canadian viewers watch World Idol, CTV begins Canadian Idol 2About 1.9 million viewers tuned in to CTV on December 25 for the two-hour World Idol special (CCR Update, Nov. 19/03) The private TV network also announced that it would be holding auditions from mid-February to April 2004 for Canadian Idol 2, a sequel to the high-ratings earner Canadian Idol.Film, video and audio-visual production and distribution hurting: StatsCanCanada’s 728 film, video and audio-visuals producers finished 2001 with a profit margin of only 1.2%, well below the margin of 3.2% in 2000 and 4.7% in 1999, according to figures released December 19 by Statistics Canada. Total revenue for the production industry increased 10.5% to $2.59 billion from the previous year, but operating expenses grew at a faster pace of 12.8% to $2.55 billion. Film producers in British Columbia were hit harder than those in any other province or region as their production revenue fell 28.9% from 1999 to 2001. On the distribution side, sales of homegrown films and videos abroad fell for the first time in a decade in 2001-02, according to StatsCan figures released December 15. American and other foreign films, mostly in the television and theatrical markets, led the way in 2001-02, with 91% of domestic sales, almost unchanged from the 90% in 2000-01. At the same time, Canadian products lost in the domestic conventional TV market, accounting for 14% of revenues in 2001-02, down from 16% in 2000-01.CRTC grants year extension to November 2004 for launch of many Category 2sThe CRTC has extended the deadline for the launch of many Category 2 digital specialty TV channels given the go-ahead by the commission three years ago until Nov. 24, 2004 (Broadcasting Decision 2003-599). When the CRTC licensed a number of Category 2 digital channels in November 2000, it indicated that they had to launch by Nov. 24, 2003.Crossroads Television and OMNI.2 win approval for London, Ottawa transmittersThe CRTC has granted approval for Rogers Broadcasting Ltd.’s ethnic TV channel OMNI.2 to add transmitters at Ottawa and London (Broadcasting Decision 2003-602) and also for Crossroads Television System to add transmitters in those same cities for its Burlington-based TV channel devoted to religious programming (Broadcasting Decision 2003-601).CRTC to hold public hearing on TV licence renewals for local and regional French-language stationsThe CRTC has set February 16 as the date of a public hearing to examine the TV licence renewal applications of local and regional French-language TV stations owned or affiliated with Radio-Canada, TVA and TQS (Broadcasting Notice of Public Hearing 2003-11). The deadline for written interventions is January 22.Tri-Vision sells V-chip patent to PhilipsToronto-based Tri-Vision International Ltd. announced January 6 that it had signed a non-exclusive licensing deal with Koninklijke Philips Electronics, Netherlands for its V-chip technology to be used in all TV sets produced for sale in Canada. The deal carries through until 2016, the expiration of the V-chip patent. Tri-Vision CEO Najmul Siddiqui has complained in the past about the lack of awareness by consumers of the availability of the V-chip (CCR, Feb. 1/01).Canadian radio revenue increases 6.5% in 2003Canadian radio revenue increased 6.5% to $1.15 billion for the broadcast year ended Aug. 31, 2003 from the same period a year earlier, according to the Radio Marketing Bureau. By the end of the third quarter, Canadian radio revenue was up 7.4%, but a difficult fourth quarter affected by SARS, mad cow disease and the power blackout brought the yearly average down to 6.5%. Advertising revenues for all media in Canada grew by about 3%.INTERNATIONAL NEWS1,129 U.S. television stations broadcasting in digitalAccording to the National Association of Broadcasters (NAB), 1,129 TV stations in 202 markets, serving 99.35% of TV households in the United States, are broadcasting in digital.TiVo files PVR patent lawsuit against EchoStar CommunicationsPersonal video recorder (PVR) maker TiVo Inc. has filed a patent infringement suit against EchoStar Communications Corporation in federal district court in Texas alleging the satellite television service provider is violating a TiVo patent, known as the “Time Warp” patent. “Key TiVo inventions protected by the Time Warp patent include a method for recording one program while playing back another, watching a program as it is recording, and a storage format that supports advanced TrickPlay capabilities (i.e. pausing live television broadcast, fast-forwarding, rewinding, instant replays, and slow motion),” TiVo said in a news release. EchoStar supplies Canadian satellite TV provider Bell ExpressVu’s PVR receiver.

CCR Update

Broadcast | January 7, 2004

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