CHUM becomes third player applying to CRTC for subscription radio licence

CHUM Ltd. has quietly filed a surprise application with the CRTC to join two other parties seeking licences to provide subscription digital radio in Canada, as first reported by Canadian Communications Reports (CCR Update, Feb. 19/04). Only three applications had been received by the CRTC by the February 16 filing deadline. The two other applicants are a joint venture involving Sirius Satellite Radio Inc., Standard Radio Inc. and the Canadian Broadcasting Corp., and a partnership between XM Satellite Radio and former NBA Toronto Raptors owner John Bitove. Both those proposed ventures have announced publicly that they have filed applications. Unlike the other two applicants, CHUM is not looking to distribute its subscription radio service via satellite, a company executive indicates. "I can confirm that CHUM has filed an application for a terrestrial digital subscription radio service," Peter Miller, VP of planning and regulatory affairs of radio and television at CHUM, tells CCR. "And again it’s subscription terrestrial, not satellite. I use my words carefully. I can add the word over-the-air to that." Miller would not disclose any further information, including whether or not the company has partners, as the CRTC process looking at the possibility of licensing subscription radio is just getting underway. None of the applications have yet been gazetted. The process is currently in the interrogatories stage. If CHUM is planning a national terrestrial subscription radio service, it will likely need to expand its existing broadcast tower infrastructure. U.S. satellite radio providers Sirius Satellite and XM Satellite, which are hoping to enter the Canadian market with domestic partners, already have satellite constellations with footprints that cover most of the North American market. "Our satellites cover most of Canada and certainly they cover several hundred miles at the very minimum north of the Canadian border, where a very substantial portion of the Canadian population is," notes Ron Rodrigues, media relations officer with Sirius. He adds, "There is a likelihood that we will have to install repeater stations in some of the large markets, like we do in the United States." Sirius initially announced its intentions to enter the Canadian market in partnership with the CBC in a December 10 media release (CCR Update, Jan. 7/04). On February 10, it was announced that Standard Radio would join the duo. Standard Radio will provide financial support, but remains mum on its contribution in terms of the supply of content. "At this point in time, we’re a partner in the business. In terms of what we will be providing in terms of content, we are still working on that," Gary Slaight, president and CEO of Standard Radio, tells CCR. "We are still dealing with the CRTC on the application and going forward to the hearing process, that’s the time when everything will be revealed in terms of what the plans are." But Slaight did indicate that Standard Radio decided to join the Sirius-CBC partnership rather than hooking up with XM because the terms were better. "We went with this group as opposed to the other because it is a better deal for us. But I think they are both viable businesses and hopefully they will both be licensed," he notes. He adds that satellite radio is "a viable business for the future and fits with our strategy in terms of expanding on our conventional radio business." CBC has also indicated that it views satellite radio as a way to broaden its radio programming reach. "By expanding the choices available to Canadians, this new service will enable the national public broadcaster to better fulfill its mandate by extending its reach and enhancing its services to Canadians," said CBC president and CEO Robert Rabinovitch in a media release. CBC plans to distribute two of its main radio channels, Radio One and La Première Chaîne, via subscription radio. While stating that no price has been determined for the service in Canada, Sirius’ Rodrigues indicates that the programming on the Canadian satellite radio service would be similar to that offered in the United States, with the addition of some Canadian stations. In the United States, XM has about 1.4 million subscribers to its US$9.99 per month radio service, and Sirius has about 261,000 to its US$12.95 per month radio offering. Recently, XM deleted commercials from its music channels offered on its service south of the border to take away an advantage previously touted by Sirius, which doesn’t run ads on its music channels. Rodrigues says studies show that there is a market for satellite radio in Canada, but he would reveal no further details on the research. "We’ve come to the conclusion that there is a big market for satellite radio and we feel that we can do well," he says. Rodrigues doesn’t feel threatened by the XM bid and points out that Sirius has programming not offered by its rival, such as play-by-play sports, including NHL, NBA, and the NFL games. He notes that the service will offer other add-ons, such as sports scores and stock market quotes on the radio dial. "There’s a display that shows the song title and artist that’s playing. There are other lines for other information, such as sports scores, stock information and even local traffic and weather conditions to specific markets," he says. Sirius also announced earlier this year that it was working on bringing satellite television to cars in the United States. Using the same satellites, antennas and infrastructure as its audio networks, the company can transmit video to screens for back-seat viewing in cars. The company announced it hopes to offer about three or four video channels within 18 months in the U.S. market. "We haven’t looked at the Canadian market (for the satellite video) at this time," Rodrigues says. "We expect that we will have something to announce later on (for the U.S. market). But the earliest that we could do something is early 2005. We haven’t made any firm commitments about what we’re going to do with video in the United States, so it would be a way to premature to even discuss the issue of video in Canada. Right now, our main goal is to get the audio service up and running in Canada." XM and Bitove filed their application for a satellite radio licence under the name Canadian Satellite Radio in August 2003. But it was the Sirius group that received a trademark for the term Canadian Satellite Radio on Oct. 2, 2003. No one at XM in the United States or from Bitove’s Toronto office had returned CCR’s calls at press time. Bitove’s company, Prizsm Brandz Properties Ltd., currently has an application before the CRTC for a licence to operate an English-language radio network for the purpose of broadcasting the program Live from Wayne Gretzky’s during the NHL season, including the playoffs. The deadline for comments on that application is March 24, and the matter will be heard at a CRTC public hearing on April 19 in Gatineau QC (Broadcasting Notice of Public Hearing 2004-1). CRTC chair Charles Dalfen mentioned the XM-Bitove satellite radio application in a speech November 11 at the Canadian Association of Broadcasters convention. "The commission will take the necessary time to consider this application - and any others that may be filed for similar services - and the questions that they raise," he said. "What will be the impact of satellite radio on Canadian consumers, on existing licensees, and on the development of digital audio broadcasting in this country? We will also want to be satisfied that the proposals have fully taken into account the Broadcasting Act’s objectives with respect to Canadian expression." The CRTC issued a call for applications for multi-channel subscription radio programming undertakings on December 23. The deadline for filing a formal application for a broadcasting licence for subscription radio was February 16.

CHUM becomes third player applying to CRTC for subscription radio licence

News | 02/27/2004 5:00 am EST

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