Posted in TV

CRTC looks at ending MuchMusic/MusiquePlus monopoly

Want to sit down and watch a TV channel that just airs music videos all day? Your options are actually artificially limited, but the CRTC could soon be making it a lot easier for people to start up music-based specialty channels.

In April, the CRTC opened a call for comments about allowing more competition in channels devoted to popular music, in the same way it opened up competition for two other genres it deemed mature enough – sports and news.

Background

Way back at the beginning of cable television, when televisions couldn’t tune higher than Channel 69, each specialty channel had to be about something different. The industry wasn’t nearly healthy enough to take competition, and so the CRTC helped to protect them from it. At first, there was one Canadian news channel (CBC NewsWorld), one youth channel (YTV), one weather channel (The Weather Network), one national sports channel (TSN), one science channel (Discovery), one history channel (History), one comedy channel (Comedy Network), etc. There was a similar situation in French, and some American cable channels as well (so long as they didn’t duplicate any Canadian ones).

As the number of cable channels exploded once they started really making money, the CRTC decided that new channels would be deregulated (or, more accurately, less regulated). They could compete directly with each other, set their wholesale rates directly with cable and satellite companies, and would no longer have genre protection. But the CRTC grandfathered the genre protection for existing channels, which meant new channels would still have to ensure they would not compete directly with protected ones.

Various methods are used to get around this protection. Sportsnet got around it by setting up regional sports channels so it technically wouldn’t compete with a national one. Other channels narrow their focus further (like Country Music Television, focusing only on that type of music, or sports channels that focus on less popular sports). Some have strict limits on how much of their schedule can be devoted to a specific type of programming (usually movies, to avoid competing with The Movie Network/MovieCentral).

In 2008, when it reviewed the entire system of specialty channels, the CRTC decided that it would slowly open up certain genres to competition. At the time, it decided to start with news and mainstream sports. This meant that new channels could start up directly in competition with existing ones (like Sun News Network … you’re welcome). Each could set their wholesale rates, and consumers could decide which of them (including none, or all) to carry in their packages. (CBC’s news channels continue to have special protections of their own).

In that ruling, the commission set criteria for opening up further genres to competition:

economic health of the services in a genre – includes profitability and revenue over a period of time, which will serve in determining the financial capacity of the service(s) within that genre to withstand competition and continue meeting programming commitments;

popularity – includes audience and subscriber information and degree of brand recognition, which will serve in identifying genres that are most popular with viewers and that would arguably attract more viewers, rather than fragment existing viewing;

programming availability – relates to the availability of programming within a genre – to the extent that there are large libraries of programming in that genre (Canadian and non-Canadian); it is possible that more services could be supported by that programming, without undue program duplication or competition for program rights;

diversity that exists within a genre – includes the extent to which the genre is already open to a degree of competition and the risk that, without some genre exclusivity, services might “rush to the middle,” seeking programming with the highest margins, rather than maintaining a specific nature of service and/or serving a specific audience; and

other consequences that might result from relaxing genre exclusivity – for example, whether exclusivity enjoyed in one language cross-subsidizes programming in the other.

We can assume that the popular music genre would be judged in the same way.

Is music ready for competition?

There’s clearly a demand for more music-related channels, if you judge recent applications to the CRTC:

  • AUX TV, a French-language channel that would offer programming” devoted to emerging music and its creation including programming intended to help emerging artists.” Denied in 2010 (with one dissenting vote) because it would compete with MusiquePlus. This despite the fact that a similar channel exists in English. Owner GlassBOX tried again with a similar channel called GlassBOX Créneau musical : musiques émergentes, which was Approved in 2012 without objection.
  • Clovys TV, a French-language channel “devoted to urban, world and Latin music and black culture.” Approved in 2008 because its nature of service limits itself in genre. The channel did not commence operations before the 36-month deadline set by the CRTC.
  • Live Music Channel, an English-language channel (owned by the owner of Leafs TV) “dedicated predominantly to live music concerts, including live-to-air and live-to-tape concerts and concert-related programming.” Approved in 2011 without objection from incumbents. The channel’s license limits music videos and music video programs to 10% of its schedule.
  • The Karaoke Channel Français (yeah, that’s what they called it), a channel … well, you get it. Approved in 2011 without objection from incumbents. The channel is limited to karaoke programming.
  • AUX 2, an English-language channel “devoted to emerging music and its creation, including programming featuring emerging music and aimed at helping emerging musicians.” Approved in 2012 without objection from incumbents.
  • Canyon.tv, an English-language channel devoted exclusively to music videos. Denied in 2012 because it was not sufficiently different from MuchMusic.

There are also plenty of existing channels devoted to music, including Aux TV (devoted to emerging artists), bpm.tv (dance, electronic, etc.), CMT (country music) and all the Much-branded channels (MuchMoreMusic, MuchMoreRetro, MuchVibe, MuchLOUD and Juicebox).

If you judge by the CRTC’s criteria:

  • economic health: The numbers here are split. On one hand, MuchMusic has a profit margin of about 30%, and has made money in each of the past five years, according to CRTC figures. The other Much channels have even higher profit margins, three of them above 50%. On the French side, MusiquePlus had a slight loss in 2011 and a larger one in the two previous years, but made money before that. Sister channel MusiMax has had single-digit profit margins since 2007. CMT has had profit margins between 30% and 40% in each of the past five years.
  • popularity: MuchMusic and MusiquePlus are among the more popular channels in each language group. Much has 8.4 million subscribers, and MusiquePlus 2.5 million subscribers. CMT has more than 10 million subscribers (thanks largely to how little they charge in subscription fees). MuchMoreMusic has 6.3 million subscribers, and the other Much channels have between 100,000 and 500,000 subscribers.
  • programming availability: Music videos are everywhere, and they’re cheap. That’s why CJNT Montreal used them to fulfill its quotas while under Channel Zero.
  • diversity within a genre: Like with radio stations, there are plenty of options when it comes to music television, even when dealing with just popular music.
  • other consequences: I can’t think of any off the top of my head.

But what’s not factored in here is the flip side of the equation: MuchMusic, MusiquePlus and CMT have protection over programming that they have each been moving away from.

Look at their schedules:

  • On MuchMusic: Malcolm in the Middle, Sabrina the Teenage Witch, Kardashians and American Pie movies
  • On MuchMoreMusic: Saturday Night Live, Gilmore Girls, Buffy the Vampire Slayer, Late Night with Jimmy Fallon
  • On MusiquePlus: Pimp My Ride, Criss Angel, Jersey Shore, America’s Next Top Model, Jackass and shows about Paris Hilton and the Kardashians
  • On CMT: Just for Laughs, America’s Funniest Home Videos, ER Pets, Extreme Makeover: Home Edition

And in most cases, these programs are during prime time, with actual music taking over the less popular daytime hours. They can air these programs because each of these channels has repeatedly asked the CRTC to reduce the amount of music videos and music video programming they air. MuchMusic and MuchMoreMusic are now down to 50% music-video programming. CTV asked to reduce MuchMusic’s music-video programming to 25% of its schedule, but this request was denied in 2010. MusiquePlus and MusiMax were at 50%, but dropped down to 30% in their latest license renewal in April. CMT started out with a requirement that 90% of its programming be music videos. Now that’s down to 50%.

Meanwhile, efforts to put more music videos on other channels are failing. Aux TV applied to remove an upper limit on music video programming on its network, but the CRTC denied that, because of MuchMusic’s genre protection.

So on one hand you have the incumbents wanting to reduce their music video programming because it doesn’t make them enough money, and on the other hand you have new entrants wanting to increase their music video programming to fill the gap but are being denied.

It really sounds kind of silly, doesn’t it?

The standard conditions

So the CRTC is asking if they should just stop trying to protect the music stations and open it up to competition, allowing people to broadcast as many music videos as they want.

To level the playing field, standard conditions of license are being proposed. These include:

  • Not less than 35% of programming be music video clips or music video programs
  • No more than 10% of the programming month be devoted to theatrical films
  • No more than 10% of the programming month be devoted to sitcoms, comedy sketch shows, stand-up comedy or drama
  • No more than 15% of the week be devoted to music-related drama series or animated series/films
  • No more than 10% of the month be devoted to music-related long-form documentaries
  • No more than 10% of the week be devoted to sports
  • Canadian content must make up 60% of the broadcast day and 50% of the evening, and 30% of the music clips aired must be Canadian (with the expectation that they be used evenly throughout the day)
  • French-language channels must broadcast 35% of music videos in French (25% in the first year, 30% in the second year)
  • No more than 12 minutes of advertising an hour
  • No local ads

These conditions are similar to what existing services are subject to.

The deadline for comments has been extended to July 3, 8 p.m. Eastern Time. You can file a comment on the CRTC website by clicking “Submit” next to notice number 2012-246.

3 thoughts on “CRTC looks at ending MuchMusic/MusiquePlus monopoly

  1. DraicKin

    Real competiton for crying out loud, A REAL Competition not with those criteria …

    Economic Health : Musiqueplus has ceased to be a Music channel a long time ago so it’s meaningless to conclude anything in the music genre based on their financial loss.
    Much channels are … well Much Channels so they benefit from having a protected big sister.

    Popularity: Of course that MuchMusic and Musiqueplus are popular channels, Videotron include nearly all french channels in their packages and Muchmusic is in Bell’s basic package .
    Degree of brand recognition… well I’m sure that they still got some degree of recognition left (ha!) but it’s more a nostalgia thing , today’s recognition if there’s such a thing has nothing to do with music.

    Reply
  2. Marc

    MuchMusic still airs music videos? I thought all they aired now was reality shows geared towards 15-25 year olds.

    Reply

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