Not all new digital channels will survive, cable executives tell CCTA delegates

The cable industry is projecting that 50 or so channels will launch this fall and attract at least four million Canadians to digital over the next three years – a number the industry warns will result in not all Category 1 and 2 channels surviving. Last week’s conference by the Canadian Cable Television Association in Toronto was dominated by such doom and gloom projections, although not everyone was convinced having some channels fail is a bad thing. "I think it would be terrible if there was no failure rate because one of the things about empowering consumers, I think, is that they see if a channel isn’t accepted and is weak, that it will go off the air and die," says CTV Inc president and COO Trina McQueen. "That will strengthen the other packages and it will strengthen the whole notion of digital if there is some competition for actual survival." Alliance Atlantis Communications Inc chair and CEO Michael MacMillan isn’t expecting high failure rates. He pointed out that established industry players will concentrate only on channels that have the best shot at surviving, and independent players with Category 2 licenses will only proceed if they believe they have a unique idea. "There will be some failures, but I think people are going to exert a lot of discipline before they launch. I really do," says MacMillan. On the French side, for example, the CTV-backed headline sports channels is expected to be the only Category 1 to launch. McQueen notes that, "We selected four from the 19 possible Category 2s that we could offer. …What we’ve gone for is high-quality, high-concept, easy to understand and market concepts. And we’ve gone for things that we know how to do." With 17 English- and French-language Category 1 services and 30-odd Category 2s forecast to launch this fall, Canadian consumers will have more choice than they’ve ever had in the past. But is it too much? A cable veteran warned that in a market the size of Canada, the death of the digital launch could well be too much consumer choice. Vaughn Tozer, currently retired from Videon Cablesystems, said the cable industry should use some of the marketing practices that have worked with past analog launches, particularly those that give consumers a chance to sample the new channels for free. "Are the consumers really going to choose?" he asked. "If the consumers are really going to choose, the world is going to look a lot different. …I have a feeling consumer choice to the extreme is really going to hurt a lot of people because I think there are channels on our system now that survive only because they are force fed." Cable executives such as Rogers Communications Inc vice chair Phil Lind and Vidéotron Communications Inc president and COO Guy Beauchamp warned that consumers, at least in the short term, wouldn’t be putting any new money into the system. According to Lind and Beauchamp, studies show consumers will reallocate their television viewing dollars. Nonetheless, most of the predictions were more optimistic than the one presented by Shaw Communications Inc CEO Jim Shaw, who suggested that 50 per cent of the channels would fail, and that achieving a digital penetration level of 15 per cent would be admirable. In contrast, Corus Entertainment president Paul Robertson estimated there will be 5 million digital subscribers in three years time, with half of them opting for some of the new digital channels. Global Television VP of specialty affiliate relations Bill Hunt set the mark at 4 million with 60 percent to 65 per cent tuning in to the new services in three or four years.

Not all new digital channels will survive, cable executives tell CCTA delegates

Broadcast | June 7, 2001

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