V to buy MusiquePlus and MusiMax, the last of the Bell-Astral castoffs

The announcement Tuesday from both Bell Media and V that the latter has won the bidding to purchase music specialty channels MusiquePlus and MusiMax means that all of the assets that the CRTC forced Bell to get rid of as a condition of the Astral acquisition now have prospective new owners.

Neither company revealed the amount of the sale, but we’ll know it when the matter comes before the CRTC. La Presse reports it’s $15 million total, which is low for a well-known specialty channel (much less two), and well below the price it was evaluated at when Astral acquired CHUM’s 50% share of the channel for $34 million in 2007.

To recap, here’s what is being sold, and the status of those sales:

To Corus Entertainment:

  • 50% interest in Teletoon (includes four Teletoon channels and Cartoon Network Canada), for $249 million total (Corus already owns the other half)
  • 50% interest in Historia and Séries+, for $138.6 million total (Corus is also acquiring Shaw’s 50% interest for the same amount)
  • CKQB-FM Ottawa (106.9 The Bear) for $10 million
  • CJOT-FM Ottawa (Boom 99.7) for $3 million

All of the acquisitions listed above (with a total purchase price of $400.6 million) were dealt with at a CRTC hearing that began Nov. 5. We are now awaiting a decision. The acquisitions were approved in December and January.

To Jim Pattison Broadcast Group:

These acquisitions were announced on May 16. The purchase price is unknown. The CRTC has not yet set a hearing date for this acquisition. UPDATE (Jan. 15): The total purchase price is $25.5 million (but valued by the CRTC at $29.8 million). The transaction was approved without a public process.

To Newcap Radio:

These acquisitions, total price of $112 million, were announced on Aug. 26. The CRTC has not yet set a hearing date for this acquisition.

To DHX Media:

These acquisitions were announced on Nov. 28. The CRTC has not yet set a hearing date for this acquisition.

To V Media:

  • MusiquePlus Inc. (MusiquePlus and MusiMax). Price unknown (La Presse reports $15 million).

The CRTC has not yet set a hearing date for this acquisition.

V, turnaround artist

It’s been a bit over five years since a company effectively owned 50% each by Maxime and Julien Rémillard got CRTC approval to take over the bankrupt TQS network. Thanks in part to a successful reboot that banked on a counter-programming strategy, and in part to getting the CRTC to agree to virtual elimination of its news department, the Rémillards got the network that has never made money to finally make some money.

The road hasn’t been easy, though. As competitors like Bell Media, Quebecor Media, Radio-Canada and others can make liberal use of other sources of funding, V had only advertising revenue to go on. It had no money-making specialty channels or lucrative cable distribution networks.

Remstar does have licences for three unlaunched specialty channels:

Each of these has four years (so until 2015) to launch before their licences are taken away.

It also had a licence for a user-generated-content channel, which has since expired because it never launched.

Launching new specialty channels is difficult for various reasons, but a big one is that you need to get carriage. And unless you own a cable provider, that can be an uphill battle.

Getting control of MusiquePlus and MusiMax means V doesn’t have to go through that process. MusiquePlus already has 2.4 million subscribers. MusiMax has 1.9 million. They’ll already have the audience. It’ll just be a question of turning that into profits.

Unlike most popular specialty channels, MusiquePlus and MusiMax are not highly profitable. MusiMax has been hovering around the break-even mark, and MusiquePlus has lost more than $5 million since 2009. (This is probably why Bell decided to let them go.)

Media critics blame this unprofitability on the channels having lost their way. There’s no music on MusiquePlus, they complain, but rather a series of reality shows about pregnant teenagers, models, carswashed-up celebrities, people who are famous for being famous and whatever Criss Angel is.

Sure, there’s Rajotte, but MusiquePlus has a long way to go to make itself a music channel again. On the bright side, V has already shown that it can revitalize a television channel and keep it young at heart. If it can do the same with these channels, while also keeping them tied to their raison d’être — music — then they should be able to win a lot of fans, and hopefully make a good amount of money too.

4 thoughts on “V to buy MusiquePlus and MusiMax, the last of the Bell-Astral castoffs

  1. Dilbert

    With the “Boom”, “Flow”, and “Virgin” stations getting split up between different owners, it seems fairly likely that they will over time adopt other monikers and rename the stations. With Bell retaining stations in the Boom and Virgin brands it’s likely they will stick with them. The “Boom” format is a Bell Media format, while Virgin traces it’s roots back to Virgin radio in the UK, which it is VERY loosely based off of.

    My personal guess is that once all the dust settles and everything works itself out, you will see Bell start to roll national formats out to many of their stations, so that the can get economy of scale on their like marketing and branding materials. In the same manner that they turned stations into TSN Radio, it’s a good bet you will see them convert music stations with similar formats into a more common name set. It’s good bottom line cost effective way to operate – and would potentially allow stations all over the country to run a similar overnight package or to syndicate certain musical programming all over the country.

    In TV, not much of what Bell agreed to sell is a surprise. The Musicplus thing is a great example, they pretty much handed V a money losing station that has lost it’s way. That the CRTC permitted MP and MuchMusic to move so far away from the music video channel gendre is a real problem. V can perhaps save the station in part by returning it back to what it was, or an updated version of what that is, rather then relying on what must be pricey US import / reality show content. They have good subscription numbers overall, but that too could shift with fewer channels in distributors “forced” packages and such. with Bell no longer in the game, there is always the chance of losing prime distribution or being removed from basic packages, replaced by other Bell products.

    Reply
    1. Fagstein Post author

      My personal guess is that once all the dust settles and everything works itself out, you will see Bell start to roll national formats out to many of their stations, so that the can get economy of scale on their like marketing and branding materials.

      Astral tried that with Virgin Radio, and Bell with TSN Radio. It’s not as easy as it might sound. Astral rebranded Ottawa’s The Bear as a Virgin Radio station, only to reverse that decision two years later. And Bell took years to roll out TSN Radio branding to all its stations (Vancouver is still waiting).

      The reality is that every market is different, and each station has its own musical focus, so national rebrands of established stations in large markets are more difficult.

      That the CRTC permitted MP and MuchMusic to move so far away from the music video channel gendre is a real problem.

      Depends how you define “problem”. I don’t think anyone really expects that airing nothing but music videos is a viable option for these networks in an age where music videos are free on demand online. The CRTC is actually looking at opening up the music genre to direct competition like it did news and sports channels, so if someone thinks we should have more music videos on TV, they can start up their own channel.

      Reply
      1. Dilbert

        ” I don’t think anyone really expects that airing nothing but music videos is a viable option for these networks in an age where music videos are free on demand online.”

        I don’t think so either. However, it doesn’t mean it shouldn’t be part of the programming, especially considering video flow programming is local programming and can also aid local artists to get exposure. There is still a market for music videos, as part of the overall package.

        At one time, their programming was ALL music videos, now it is NO music videos. I doubt that a general “french voice over or subtitle US reality show” channel would get a nod from the CRTC these days, yet that is what the “music” stations morphed into.

        You can look at MTV as a great example of how this sort of programming is mostly destructive. They have huge distribution (more than 350 million homes) and generally have a viewership under a million. A few shows and specials do well, and not surprisingly, the best ratings are generally for MUSIC award shows. Go figure! MTV fails to deliver music (they have other channels for that) and has spend much of the last decade in decline as a result. Only a couple of shows like Jersey Shore have managed to keep them out of the ratings dump.

        Musicplus survives a much because of manditory carriage as anything else. Without the free pass, would it really have that many “subscribers”? Do you have any information regarding viewership for this channel? With that many subscribers (mostly in Quebec) you would think they could get some decent ratings… but if they are losing money under their current system, perhaps not.

        Reply
        1. Fagstein Post author

          I doubt that a general “french voice over or subtitle US reality show” channel would get a nod from the CRTC these days

          Sure it would, though like any other channel it would have to meet Canadian content requirements.

          Musicplus survives a much because of manditory carriage as anything else. Without the free pass, would it really have that many “subscribers”?

          Technically, MusiquePlus doesn’t have mandatory carriage, though it’s included on analog cable and in many basic digital cable packages.

          Do you have any information regarding viewership for this channel?

          Not directly. But MP makes about a third of its revenue, about $4.4 million a year, from advertising.

          With that many subscribers (mostly in Quebec) you would think they could get some decent ratings… but if they are losing money under their current system, perhaps not.

          Subscribers don’t necessarily translate into ratings. And MusiquePlus also gets less money through subscriptions than other French-language channels like Canal D and Canal Vie.

          Reply

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