Tag Archives: CRTC

Posted in Radio

CRTC approves purchase of CJMS 1040 AM

CJMS

CJMS 1040 AM St-Constant, Montreal’s French-language country music station, has been given the go-ahead for a new life.

On Thursday, the Canadian Radio-television and Telecommunications Commission approved a change in ownership of the station, from 3553230 Canada inc., a company owned by Alexandre Azoulay, to Groupe Médias Pam inc., owned by Jean Ernest Pierre. The latter also owns Montreal Haitian station CJWI 1410 AM, CPAM Radio Union.

The sals is for $15,000 plus an hour’s worth of advertising airtime a week for a year (52 hours total). Because it’s a purchase of a station that was losing money, and will require investments to bring it into compliance with its obligations, the CRTC did not impose additional tangible benefits on the transaction.

Much of what the station will look like under the new owners has already become evident. It launched new branding and a new website, and is simulcasting a news show from CJWI during rush hours (6-9am and 4-6pm weekdays). The new owners promise that the rest of the schedule will be unique to CJMS, that it will not air ethnic programming, and that it will continue to serve the community of St-Constant.

The new owner also told the commission that the plan is to modernize the music at CJMS and bring in more contemporary country.

The sale follows a bizarre hearing last year in which Azoulay blamed serious and repeated failures to comply with CRTC licence obligations on his father’s dementia, a statement that left commissioners dumbfounded.

The commission responded by imposing mandatory orders on CJMS requiring it to come into compliance with its licence, with the threat of contempt-of-court charges if they don’t. Those orders have been maintained under the new owner.

The change in ownership comes with a new licence and de facto renewal until Aug. 31, 2017. The three-year licence term reflects the fact that CJMS has repeatedly failed to meet its regulatory obligations.

Posted in Opinion, TV

24 myths about the CRTC, TV and Netflix

CRTC chairman Jean-Pierre Blais has had to answer for decisions that the CRTC hasn't made or positions it hasn't proposed.

CRTC chairman Jean-Pierre Blais has had to answer for decisions that the CRTC hasn’t made or positions it hasn’t proposed.

Over two weeks of CRTC hearings over the future of television in September, I monitored discussion over Twitter. And I saw a lot of crazy ideas being thrown out about the commission, some of which I might simply disagree with, but much of which is just plain inaccurate or misinformed. Since then, the volume has died down, but the same points keep getting brought up.

So to try to clear things up, here are some things people are saying about the CRTC and how television is regulated in Canada that could use a reality check.

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Posted in TV

Bell files CRTC complaint over GamePlus feature on Rogers NHL GameCentre Live

One of Rogers’s attempts to use its $5.2-billion NHL rights purchase to drive subscriptions to its telecom services has prompted competitor Bell to file a complaint with the CRTC.

The complaint is about GamePlus, a feature of the new Rogers NHL GameCentre Live online streaming app. While GameCentre Live is available to anyone for purchase (though free for Rogers customers until the end of the year), GamePlus is exclusive to Rogers Internet, TV, home phone and wireless subscribers. It offers additional camera angles like the ref cam (a camera mounted on a referee’s helmet), sky cam (a wide-view camera that goes up and down the length of the ice at the Air Canada Centre) and star cam (a camera always focused on an individual player).

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Posted in Radio

CRTC denies application for FM retransmitter for CHOU 1450 AM

Realistic pattern of the new CHOU retransmitter

Realistic pattern of proposed CHOU FM retransmitter

An application from Radio Moyen-Orient (CHOU 1450 AM) to improve its reception in St-Michel and St-Léonard by adding a 50-watt FM retransmitter at 104.5 FM has been denied by the CRTC.

The reasoning didn’t relate to interference with other stations, but rather the commission finding the station did not meet the requirement of showing a compelling technical need for a second transmitter. The commission found that many of the complaints about poor coverage came from areas at the edge or outside of CHOU’s secondary service contour, which were never expected to receive the station well, and that local interference to AM signals is to be expected.

The application only had one opposing intervention, from CHCR, the owner of FM ethnic stations CKDG 105.1 and CKIN 106.3. That group warned that the new transmitter would cause interference to CKDG and would impact their advertising. Both those arguments were essentially ignored by the commission because the two stations are far enough in frequency to not have any interference problems and because CHOU is already a licensed station and market issues have already been dealt with.

Interesting, though, is that the CBC, which owns CBME-FM-1 at 104.7, did not intervene in this case, even though there was a big potential for interference. This could open the door to another application for 104.5, provided it only interferes with 104.7 in the eastern part of the island where people could hear CBC Radio One better on 88.5 anyway. (Such a transmitter would still have to protect Boom FM at 104.1 in St-Jean-sur-Richelieu and Espace Musique at 104.3 in Trois-Rivières.)

Posted in Montreal, Radio

TTP Media says news-talk stations are six to nine months until launch

From left: Paul Tietolman, Nicolas Tétrault and Rajiv Pancholy, partners in 7954689 Canada Inc., aka Tietolman-Tétrault-Pancholy Media

From left: Paul Tietolman, Nicolas Tétrault and Rajiv Pancholy, partners in 7954689 Canada Inc., aka Tietolman-Tétrault-Pancholy Media

Every now and then people ask me about the Tietolman-Tétrault-Pancholy group, which has licenses for three high-power AM talk radio stations in Montreal, the first one granted in 2011, but hasn’t made any announcements in more than a year.

Rumours abounded that something was wrong. That the group had bitten off more than it could chew. That there was a problem with the three-way partnership and that one or more partners would be bought out by the others. It’s been a year since I posted a story because people were wondering what happened to them.

Now we have some more news. On Sept. 19, the CRTC approved applications from the group for extensions on the deadlines to launch its two news-talk stations, a French one at 940 AM and an English one at 600 AM, for another year.

Because the group had already asked for an extension on the 940 station last year, this extension is the last one the commission will give. If the station does not launch by Nov. 21, 2015, its license becomes void.

The English station, which was first approved in 2012, gets an extension until Nov. 9, 2015. That extension could be extended another year if needed, consistent with CRTC precedent on these matters.

The group also has a license for a French-language sports talk station at 850 AM. That licence was granted in June 2013, so they have until June 2015 to launch it or ask for a first extension.

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Posted in TV

CRTC approves making Videotron’s Canal Indigo bilingual as Viewers Choice PPV shuts down

Only 13 hours before Viewers Choice Pay-Per-View shuts down for good, the CRTC has approved an expedited application from Videotron to convert its Canal Indigo into a bilingual pay-per-view service to replace it.

The service would meet all of the regulatory requirements for bilingual pay-per-view systems, with one notable exception: Rather than adhere to a 3:1 ratio of English to French channels that is clearly designed for bilingual pay-per-view services operating in English Canadian markets, Indigo would reverse that ratio, offering four French channels for each English one, not including barker/preview channels. And it would offer at least two English channels. Videotron said in its application it planned to operate eight French-language and two English-language channels, which would fit its proposed ratio.

Since Videotron operates almost exclusively in Quebec, having more French channels makes sense for its pay-per-view service. The CRTC agreed, implementing the exception.

But it didn’t like the idea of reducing the number of channels that much. Indigo currently offers 11 standard-definition and three high-definition channels, while Videotron carries eight SD and one HD channel of Viewers Choice. Under Videotron’s proposal, the total number of PPV channels would drop from 23 to 10.

“So to maintain a number of signals comparable to that currently offered, the Commission requires that Indigo offer at least 3 English-language signals. With this minimum of English-language signals, Videotron must offer at least 12 French-language signals to meet the ratio. Accordingly, Videotron will be able to maintain a level of service comparable to that currently offered by its French-language service.”

(This whole system seems to be unnecessarily rigid. It’s one thing to impose minimum ratios to protect minority-language markets, but the ratio as it’s worded isn’t just a minimum, but a maximum as well. And setting a minimum number of English channels on top of that means the CRTC has imposed a minimum of 15 channels for Videotron’s pay-per-view service.)

English channels could start “very quickly”

The CRTC’s alteration of Videotron’s application is a bit of a curve ball. Videotron had already begun trimming Indigo, taking away six of its 11 SD channels. With this decision, it will need to start four of them back up (or start up four new HD feeds).

But adding English service to Indigo won’t take that long, Videotron president and CEO Manon Brouillette told me. For movies, “we already have all the rights in English,” she said. It’s just a question of getting deals done for PPV events like wrestling and UFC events. But “it wouldn’t be that complicated.”

With the rise of paid video-on-demand services on digital cable, the appeal of pay-per-view for events that aren’t live has diminished significantly. “When we look at the tendencies of consumption of cinema, it’s much more on demand,” Brouillette said. “So the Indigo channels, the rate of orders is not very high, it’s a segment in decline.”

“The potential for us, and the reason the channel is doing well financially, is because of events, sports, concerts, etc.”

Brouillette pointed to the Quebec City amphitheatre, which Videotron has a management contract for once it opens next year, with everyone hoping it will one day be home to an NHL team.

“There won’t just be sports in this theatre,” she said. “There will be concerts, events. We’d like to broadcast live shows on Indigo like we did for Céline Dion (on the Plains of Abraham in 2008). It’s an event channel.”

Videotron has a bit of time to get its English service running. It’ll be about three weeks until the next major UFC and WWE pay-per-view events.

Viewers Choice goes out with a whimper

There’s no big fanfare for the end of Viewers Choice, which began in 1991 and is being replaced by in-house services run by Bell and Rogers. On its straight-from-the-90s website, a simple notice is posted:

Dear Viewers Choice Customers — As of September 30, 2014 Viewers Choice Pay Per View will no longer be broadcasting.

Thanks to all of you for allowing us into your homes for so many incredible events and making the last 23 years successful and memorable

Sincerely, The Viewers Choice Team

The service’s programming will go dark starting around 10:30pm, and the last movies will end at midnight. Those final movies include Winter’s Tale, The Quiet Ones, The Grand Seduction, The Other Woman, Rise of an Empire and, of course, porn.

UDPATE (Oct. 23): Videotron has re-applied to the CRTC to reduce the minimum number of channels from three English channels to two (and hence French channels from 12 to 8). It argues that information the commission used in its decision was erroneous. The CRTC quoted Videotron’s website saying there were 14 French-language Indigo channels, but in fact there were only eight in use. This new application is open to comment until Nov. 21.

 

Posted in TV

Global News 1 would add 100 journalists, 8 new local newsrooms including Quebec City

Updated with a correction about stations being offered to participate.

After being tight-lipped about it for months, Shaw Media has made the first announcement about its plan for a new national news channel called Global News 1, first mentioned in a CRTC filing in June.

In a press release issued Monday, Shaw Media says it has submitted its application for the new all-news channel to the CRTC (which hasn’t published it yet, so we don’t have details). The timing is deliberate, coming just after the commission concluded its Let’s Talk TV hearing. Reeb said the submission was made several weeks ago, but Shaw wanted to wait until the proceeding was over to respect that process.

Hybrid format

Shaw explains its unique blend of national and local news this way:

Global News 1 will feature a national newsfeed bookended by local news segments tailored specifically for each of the markets it serves. Using next-generation technology, the service will be framed by a continuous data feed of hyper-local headlines and community events. With the ability to cover live, breaking news at the local, regional or national level, Global News 1 will be like no other service on the dial.

Shaw says that each of the 12 markets with owned-and-operated Global stations (Vancouver, Kelowna, Calgary, Edmonton, Lethbridge, Regina, Saskatoon, Winnipeg, Toronto, Montreal, Saint John, Halifax) will have its own feed, but there will also be eight additional communities getting “local newsrooms” — places with “either no local television news or limited competition”:

  • Fort McMurray, Alta.
  • Red Deer, Alta.
  • Sault Ste. Marie, Ont.
  • Niagara, Ont.
  • Mississauga, Ont.
  • Ottawa, Ont.
  • Quebec City, Que.
  • Charlottetown, P.E.I.

And on top of that, “Shaw Media is also proposing to open the channel to eight small-market, independent broadcasters who would have the opportunity to add their own local content to the service and retain all local advertising in their markets.”

Troy Reeb, senior vice-president of Global News, tells me these stations are:

  • CKPG in Prince George, B.C. (Jim Pattison Group) — City affiliate
  • CFJC in Kamloops, B.C. (Jim Pattison Group) — City affiliate
  • CHAT in Medicine Hat, Alta. (Jim Pattison Group) — City affiliate
  • CKSA/CITL in Lloydminster, Alta./Sask. (Newcap) — CBC and CTV affiliates, respectively
  • CHFD in Thunder Bay, Ont. (Dougall Media) — already a Global affiliate
  • CHEX in Peterborough, Ont. (Corus) — CBC affiliate
  • CKWS in Kingston, Ont. (Corus) — CBC affiliate
  • CJON in St. John’s, N.L. (NTV)

(An earlier version of this post also listed CHEK in Victoria, B.C. Reeb actually referred to CHEX, the Corus station. CHEK is not on the list because it competes directly with Global B.C.)

Reeb specifies that there has been no discussion with these stations. Rather, the offer is being made because Global does not want to compete with them. “We didn’t want to threaten any of the small stations that are already struggling,” he said. “We didn’t want to go in and say hey we’re going to open up a competitor. We’re looking for a solution not just for us but for the system overall.”

Assuming it adds all of these stations, that would mean up to 28 different markets getting a hybrid national/local news channel.

Notably absent from this list is CJBN, a station owned by Shaw (but separate from Shaw Media, its acquisition predated the Global purchase) in Kenora, Ont. Its tiny market and limited local programming means it doesn’t have the resources to contribute to this service, Reeb said.

Reeb told me that, if the proposal is approved, Global would add about 100 journalists across the country, between those working at the regional newsrooms and those working nationally. This would mean about a half-dozen people working in each regional newsroom.

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Posted in Radio

Two new radio stations to launch in Montreal region by end of 2014

The last regulatory hurdle to the Montreal area getting its newest commercial radio company has finally been passed. On Thursday, the CRTC approved a technical change for CHSV-FM Hudson/St-Lazare, a new English-language music station first approved two years ago.

As a result, it and a sister station, Radio Fierté (approved in 2011), will launch by the end of 2014, owner Evanov Communications says.

Former (orange line) and new (red line) pattern of CHSV-FM 106.7 Hudson, with interference zones of 106.9 Ottawa (Jump) and 106.7 Burlington, Vt. (The Wizard)

Former (orange line) and new (red line) pattern of CHSV-FM 106.7 Hudson, with interference zones of 106.9 Ottawa (Jump) and 106.7 Burlington, Vt. (The Wizard)

CHSV-FM 106.7 St-Lazare (The Jewel)

Evanov (through its subsidiary Dufferin Communications) had applied for the change to CHSV-FM because the Bell tower it had planned to use in Hudson had run out of space and would have required expensive upgrades to support another antenna.

So Evanov proposed to move to a Rogers-owned tower on Chemin Sainte-Angélique near Rue des Liserons, about 5.3 kilometres southwest of the Bell tower. In order to still cover Hudson, the change also meant a power increase, from 500W to 1420W average ERP.

Some competitors, such as CJVD Vaudreuil (a French-language station which serves the same region and wanted to use CHSV’s frequency) and Groupe CHCR (which owns CKIN-FM 106.3 in Montreal and was worried about interference), objected to this change as deviating from what was originally approved.

But the CRTC didn’t buy those objections. While the new pattern is significantly stronger toward the west and southwest, it is about the same toward Montreal, and so can’t be seen as some back-door way into getting into the Montreal market. And the situation that led to the application, and the proposed solution to it, are perfectly reasonable.

In its application, Evanov said the station, which will carry easy-listening music and the Jewel brand used at six other stations in Ontario and another in Winnipeg, would be ready to launch “within weeks of approval as all our other infrastructure and equipment are in place.”

Carmela Laurignano, vice-president and radio group manager for Evanov, said they won’t waste any time now. “It is our intention to get started on making preparations next week. It will require us to schedule installation of the transmitter, going through a testing phase to satisfy all requirements by Industry Canada and then sign-on air. We expect to be signed on by Christmas!”

When it does go on the air, for testing and then at launch, The Jewel in Hudson will cover the western off-island area, Ile Perrot, areas on the north shore around Oka, and the extreme West Island. Areas further than that may be able to pick up the station, but may experience interference from WIZN (The Wizard) from Burlington, Vt., or CKQB-FM (Jump) in Ottawa. Reception from downtown Montreal or points east of there will be very difficult because of interference from both WIZN and the Boom FM station at 106.5 in St-Hyacinthe.

CHRF 980 AM Montreal (Radio Fierté)

Evanov is also the licensee of Radio Fierté, a new French-language AM station serving Montreal’s LGBT community. The station was approved in 2011 on TSN Radio’s former frequency of 990 AM. Last December, the CRTC approved a technical change for that station, moving it to 980 AM and allowing it to have a less restrictive pattern at night.

Radio Fierté has proposed a mixed music and talk format. It’s based on Proud FM (CIRR-FM), an English-language station in downtown Toronto. Because Fierté is on AM, it will likely be more focused on talk.

Though they operate in different languages, in different cities, and have different formats, Radio Fierté and The Jewel will share overhead, including management. So this CRTC decision allows Evanov to move forward on both stations.

Laurignano said Radio Fierté should be on the air by mid-November.

Posted in Radio

CPAM owner agrees to buy CJMS 1040 for $15,000, keep it country

Almost a year after a bizarre CRTC hearing in which the owner of CJMS 1040 AM in St-Constant blamed the station’s failure to meet its regulatory obligations on his father’s dementia and announced before a surprised panel of commissioners that the station had been sold to an unnamed buyer, the details of that transaction have been published by the commission.

The CRTC has called a hearing for Nov. 12 (a technicality; the parties aren’t being asked to appear) to discuss two applications related to CJMS: Its licence renewal, which was in grave danger of not being accepted because of the repeated management failures, and a proposed sale of the station to Jean Ernest Pierre, the owner of CPAM Radio Union (CJWI 1410 AM), the Haitian community station in Montreal.

The identity of the buyer is no surprise. The two stations share an antenna in St-Constant, and after the CRTC hearing, during which CJMS’s lack of news was brought up as an issue, the station began simulcasting morning and afternoon programs from CJWI.

Documents filed with the commission show that Alexandre Azoulay, who owns CJMS, agreed on Oct. 9, 2013 (a month before the hearing) to sell it to Groupe Médias Pam Inc., a company entirely owned by Pierre, who is also the sole owner of CPAM. The purchase price is $15,000, as well as an hour a week of airtime for a year, for Michael Azoulay’s talk program connected with his family’s chiropractic business.

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Posted in TV

CRTC approves V’s purchase of MusiquePlus/MusiMax

The last piece of the Bell-Astral divestments was approved today by the CRTC: the sale of MusiMax and MusiquePlus to V Media, the owner of the network formerly known as TQS.

Even though the sale has only been approved now and hasn’t yet closed, the companies are already acting as if it’s a done deal. V and MusiquePlus/MusiMax are promoting each other, to the point where a new MusiquePlus show is a behind-the-scenes look at a show on V.

The purchase price is $15.52 million. In 2007, Astral bought a 50% of these two channels from CHUM Ltd. for $68 million, giving them a value of $136 million.

In order to raise money to pay for the channels, V itself will take on new investors: The Caisse de dépot et placement du Québec and the Fonds de solidarité FTQ will each take a 15% stake in V Media (which also includes the conventional TV network). A third “institutional investor” will take another 15% stake, and the Rémillard family will retain the other 55%, with the possibility of raising that stake up to 59% of the company performs well.

The board of directors of V would be composed of four representatives of Remstar and one representative each of the three 15% investors.

Licence changes — more flexibility, but not too much more

As part of the transaction, V had asked for some amendments to the licences for the channels. Some of them relate to the fact that they’re no longer owned by large media companies (particularly a requirement to spend a percentage of that group’s revenue on so-called “programs of national interest”). Others are meant to give them more flexibility in programming.

V had proposed that MusiquePlus and MusiMax have a minimum requirement of 75% of their programming be devoted to music-related programming. Currently MusiquePlus has a 90% requirement and MusiMax has no minimum. The CRTC didn’t like that number and imposed an 80% requirement for both services.

V wants to use comedy, a genre that isn’t being exploited much in French-language television (there’s no French equivalent to the Comedy Network), to draw audiences to MusiquePlus, particularly in its target demographic of people age 18-34. For MusiMax, it’s lifestyle and reality shows to draw women 35-54. But it also says it wants to have more live musical performances in studio, and more concert programs.

There were also proposals related to program categories. Both services can now include “music video programs” in the 30% of their programming month they have to devote to pure music video programs. This would allow them, I believe, to add a count a program like Cliptoman (MusiquePlus’s version of Much’s Video On Trial, where comedians make fun of music videos) toward that quota.

V also proposed to reduce the Canadian content exhibition requirement from 55% of the broadcast day and 55% of the evening (6pm to midnight) period to 45% for those two periods. The CRTC also felt this was too much, and decided on 50% for both periods for both services. This is still higher than services like Canal D and Historia, which have profit margins around 50%.

In terms of Canadian content spending, the CRTC agreed with a 31% level for the services combined, so that it must spend 31% of its revenue on Canadian programming, just slightly above what it was before.

Finally, MusiquePlus and MusiMax also have a special condition that requires them to pay 3.4% and 5% of their revenues respectively to MaxFACT, a fund that helps create and produce Canadian music videos. V proposed to create its own fund, the Rémillard Fund, that would take this money instead. The CRTC approved of this, provided it is satisfied with the new fund’s operations and independence.

Sale valued at $22.9 million, includes ad revenue guarantee

The sale price is $15.5 million, but comes with a guaranteed ad buy of up to $1.5 million (excluding commissions), which brings the net price down to $14 million. There’s also a guaranteed ad revenue floor for two years.

These guarantees make determining the actual value of the transaction difficult, because how much it will actually be depends on certain factors.

According to documents submitted in the application, the guarantee of at least 80% of 2013 revenues, or about $6.6 million a year, would last until August 2016. But this would be adjusted if viewership drops by more than 5%.

The contract also allows V to cancel the ad buy and get half of that, or $750,000.

On top of this, Bell Media would also sell third-party ads for these two services and V, for which it would earn a commission. That commission has minimums and maximums that put it in the high six-figures annually.

In fact, Bell Media would become the exclusive ad agency of MusiquePlus and MusiMax until August 31, 2016. V would be able to enter barter agreements and other exchanges, but actual ad sales would have to go through Bell.

As if that didn’t sweeten the deal enough for V to take over the money-losing services, Bell also agreed to pay off an outstanding debt imposed on Astral in 2007 when it bought the 50% of the company that owns the networks from CHUM Ltd. (which at the time also owned MuchMusic). This is $40,476 a month to be paid to the Harold Greenberg Fund. But since those payments ended Aug. 31, it’s a moot issue.

The CRTC didn’t agree that the guaranteed ads should be deducted from the purchase price, calling it “the normal course of business”. Adding in things like assumed leases, the CRTC evaluated the total value of the transaction at $22,872,086.

Hope for a turnaround

Because of the tangible benefits policy that requires that 10% of the value of the transaction goes to funds and projects that benefit the broadcasting system, V now has to propose a new tangible benefits plan. The CRTC has given them 30 days to do so. (It notes that it recently changed some policies relating to tangible benefits, and this proposal should follow those new guidelines.)

The acquisition makes sense both for V and for the two struggling music channels. The Rémillard family bought TQS out of bankruptcy in 2008, and while the decision to effectively abandon all news programming was very controversial at the time, it also helped them bring the network into the black after decades of bleeding money.

Now, people are hoping that they can do a similar turnaround with MusiquePlus and MusiMax. MusiquePlus made $867,851 in pre-tax profit in 2012-13, but lost almost $6.5 million in the four previous years. MusiMax is in the black, but has had a pre-tax profit margin of under 1% over the past three years.

The drop in revenue has come with a drop in ratings. MusiquePlus went from a 1.1% rating overall in 2006 to a 0.7% share in 2012. Both services have seen drops in subscriptions as well, of 10% for MusiquePlus and 13% for MusiMax in only three years.

Posted in Opinion, TV

CRTC has to begin preparing for its own irrelevance

As the Canadian Radio-television and Telecommunications Commission began its two-week hearing into television policy on Monday, the various interest groups began planting their self-serving stakes. Google doesn’t want YouTube to be regulated by the commission. The Ontario government and others want the CRTC to force Netflix and similar services to contribute to Canadian content. And funds like the Canada Media Fund and Shaw Rocket Fund want to ensure they don’t lose their funding.

It’s all so predictable, which makes sitting through hours of these presentations so boring. But, despite chairman Jean-Pierre Blais’s best efforts, we’re not getting to practical solutions here or any concrete idea of what TV is going to look like in 10 years or even five.

The CRTC’s Communications Monitoring Report shows that the adoption of Netflix alone in Canada is on a dramatic rise. Now almost a third of English-language households have subscriptions. But this hasn’t resulted in a dramatic drop in cable and satellite subscriptions. About 85% of Canadian households have some sort of regulated pay TV subscription, either through cable, satellite or IPTV (Bell Fibe/Telus Optik etc.). The percentage is falling, but not fast enough to panic. At least not yet.

As technology evolves, the difference between YouTube, Netflix and Bell TV becomes more and more irrelevant from a regulatory perspective. Internet-based television connections like Bell Fibe use the same data links to send TSN’s five feeds as they do to send House of Cards and that latest cat video. At this point, we could deliver all television services in Canada to most consumers via the Internet. We have the technology to do that.

Bureaucratic momentum

The biggest reason we haven’t moved everything online is bureaucratic. And not in the sense of regulation (though that’s part of it), but in the sense of having large media empires like Bell, Shaw, Rogers and Quebecor, that own the exclusive rights to high-value programming and deliver it through the regulated system because the regulated system pays them for it and consumers haven’t been too tempted to change that.

So long as the CRTC imposes a 5% tax on cable revenues that are to be redirected to Canadian content (including community television channels), and forces content channels to devote certain parts of their schedules and certain percentages of their revenue to Canadian content, there will be an incentive to move more content out of the regulated system and onto an unregulated one. And eventually we will pass that tipping point where there’s no must-see TV on the regulated system and consumers start abandoning it in droves.

Fortunately for the CRTC, it has time. It can prepare for this. But it has to decide now which way it will go: expand its reach to include purely online forms of video delivery, or contract its reach to eventually get out of the TV regulating business completely.

You can’t regulate Internet content

There have been some cases for the former that try their best to pass the sanity test (Jason Kee, Public Policy & Government Relations Counsel at Google, asked rhetorically if the CRTC would start regulating animated GIFs, too). Proponents of regulatory expansion say the CRTC should only regulate video that is sold, not stuff put on YouTube for free. They say there should be a minimum revenue before regulation kicks in. They say we should focus on companies like Netflix instead of trying to regulate all video.

But there isn’t really a way to do this sanely. Not without censoring the Internet, or dissuading companies like Netflix from making their videos available here, or forcing them to blackout their videos to Canada for fear of being taxed. Or creating some sort of grey market for content, where some content is legal and other content is illegal. Or creating a chill among all content creators in this country. Or just pissing off the Canadian public.

(And the federal government didn’t waste any time making it clear that it will not support any move to tax Netflix or YouTube, with heritage minister Shelly Glover issuing a statement Monday evening.)

The CRTC’s New Media Exemption Order is a policy decision in which it has convinced itself that it can regulate content on the Internet but simply chooses not to do so. It is trying to make rules out of de facto reality to maintain the illusion of control. And while it can control the online activities of companies it already regulates like Bell and Shaw, it can’t control Google, Apple and Netflix without prompting a war that might just end in those companies abandoning our country.

So the CRTC has little choice but to maintain a hands-off approach to Internet content. And that means that eventually, maybe five or 10 or 20 years down the road, it will have to take its hands off television content as well, because there won’t be any difference between the two.

The CRTC needs to start now to plan for the day when television regulation becomes irrelevant. while not allowing the telecom giants to abuse their power in the meantime.

It’s taking steps in that direction, proposing relaxing rules for specialty channels and third-language services, and giving consumers more choice in terms of channel selection. And it’s trying to find ways to encourage more competition for cable TV providers, by extending an exemption order so that smaller players like Colba.net and VMedia can set up TV distributors in big cities using IPTV without needing a licence first.

Cancon’s future

But it faces a bigger challenge in determining how to promote Canadian culture in the future. So much of the Canadian television industry is based on regulated transfers of money, from broadcasters and distributors to production funds to independent producers. That system will eventually collapse or evaporate, and we need to find a replacement.

One possibility is by doing something like taxing Internet access and sending that money to the federal government or a fund like the Canada Media Fund (which is already funded in part by the government anyway). But that creates a system where one government-appointed body acts as the gatekeeper, deciding what Canadian content is worth supporting. It discourages competition and innovation.

Or the CRTC could do nothing, and let Canadian video content stand on its own with little support from the broadcasting system. This could result in Canadian media giants collapsing or being taken over by larger U.S. giants. We could lose a large part of our identity.

It’s a scary thought for the industry, and those champions of Canadian content, but I haven’t seen a viable long-term alternative.

The CRTC’s future

I’m not saying the CRTC will cease to exist. It will still have a vital role to play, so long as there are aspects of telecommunications that need regulatory help. Radio is still broadcast through scarce radio frequencies which need to be regulated, though they too will eventually move to Internet-based distribution.

Internet access needs a regulator so long as there’s a finite number of cables reaching into our homes. And though the technology used to deliver it bears little resemblance to what it was at first, the telephone is still a tool we use regularly and will be with us for some time.

The CRTC has a job to do, to ensure that the TV industry plays fair with itself and keeps the best interest of consumers, workers and the Canadian public in mind. But it also has to look forward to the day when it has to decide to stop regulating the unregulateable and focus on where it can make a difference for the better.

But the commissioners are only human. So we — the industry, the public, the government — have to be part of that discussion. Through our comments and guidance, we must help the regulator build this road toward the future where choice is infinite and the only limit to content is creativity and no one but us can decide what we can and cannot watch.

Posted in My articles, TV

CRTC megahearing on TV begins Monday

10 days, 118 presentations. That’s what’s on the agenda for a CRTC hearing that begins on Monday. There’s the usual big players like Bell, Rogers, Shaw, Quebecor, Telus and Cogeco. There’s the interest groups like the Canada Media Fund, Public Interest Advocacy Centre, Writers Guild of Canada, and labour unions. And there are some individuals thrown in as well.

But there’s also Google, Netflix, Disney.

It’s hard to oversell the importance of this hearing. It isn’t about reviewing a single policy, or approving a single acquisition or new licence. It’s about everything having to do with television regulation in Canada. A working document posted Aug. 21 contains 28 proposals concerning television policy (and a 29th about when to implement changes). It ranges from how consumers choose which channels to buy from their distributor to how accessible programming is for those who can’t see or hear to things that could change the very nature of specialty channels or how you define local television.

And the CRTC is going to try to review this all in two weeks, and rather than deal with the issues one at a time, it’s going to deal with them all simultaneously as each group steps forward to present its opinions.

I put together a story in Saturday’s Gazette that lists the big issues at stake that affect consumers (the online version contains some more issues than the print one does). Packaging flexibility is the big focus of media, and simultaneous substitution is also mentioned a lot, but there are far more issues.

The commission is clear that the proposals outlined in its discussion paper aren’t necessarily what it’s going to do, but are meant to start discussions. Nevertheless, it gives a lot of insight into how it’s thinking. And even with just the changes proposed there, a lot of how we watch and pay for television would change.

For more on the issues at stake, I would invite you to read the series posted on Cartt.ca (a website I’ve written for, though not for this series) and the series posted to Media in Canada or my post from June outlining the issues as they were presented then. Or you can read all 2,552 interventions filed in this proceeding.

Unusually, the CRTC will continue accepting comments about these policies during the hearings, through that most sober and intelligent method: online discussion forums. They’ll be open until the end of the hearing on Sept. 19.

If you want to watch the hearings, CPAC will be webcasting them. The CRTC will also have audio feeds in English, French and with no translation. Or you can go to 140 Promenade du Portage in Gatineau and see the hearings in person.

For Twitter commentary, good bets are Cartt.ca editor Greg O’Brien, policy wonk Kelly Lynne Ashton, the CRTC Hearings official Twitter (which will post links to documents) and the hashtags #CRTC and #TalkTV.

Further reading

 

Posted in Media, Radio, TV

Highlights of the CRTC’s Communications Monitoring Report

Just days ahead of its major hearing on TV policy, the Canadian Radio-television and Telecommunications Commission has released the broadcasting part of its annual Communications Monitoring Report, a document filled with statistics on funding, viewership, subscriptions and more.

Most of the data is unsurprising, or shows the predictable continuation of a gradual procession. Fewer people are analog cable subscribers. Conventional television still struggles to break even while specialty channels are raking in the dough. And AM radio is on the decline while FM continues to boom.

There are still a few interesting things I noted in the report though (in most cases, these figures are for the year ending Aug. 31, 2013):

Overall:

  • Five companies (Bell, Cogeco, Quebecor, Rogers, Shaw) get 85% of total Canadian broadcasting revenues. This includes radio, television and television distribution.

TV:

  • “Netflix adoption among English speakers grew from 21% to 29%” — That’s in one year. In 2011, it was 10%. It’s true that for most subscribers, Netflix is something that complements their cable TV subscription instead of replacing it, but if the broadcasting industry isn’t already nervous about Netflix, it should be.
  • The total TV viewing share 2012-13, in English Canada: Bell 38%, Shaw/Corus 37%, Rogers 9%, CBC 8%.
  • Total TV viewing share in the Quebec francophone market: Quebecor 33%, Bell 23%, Radio-Canada/CBC 18%, Remstar (V) 9%.
  • On Aug. 31, 2011, there were 657,300 IPTV (e.g. Bell Fibe/Telus Optik) subscribers in Canada. On Aug. 31, 2013, it was 1,385,100.

Radio:

  • The number of licensed third-language radio stations in Canada went from 32 in 2012 to 45 in 2013.
  • Revenues for French-language AM radio stations in Canada dropped from $11.7 million in 2011 to $4.7 million in 2013. There are only eight AM commercial French-language radio stations in Canada.  The dramatic drop in revenue coincides with Cogeco’s decision to change CKAC 730 AM in Montreal from all-sports to all-traffic in fall 2011.
  • Since 2009, the CRTC has approved 132 new FM stations, and only three new AM stations.
  • The number of Canadians subscribed to satellite radio has steadily climbed from 8% in 2008 to 15% in 2013.
Posted in TV

CRTC: Videotron doesn’t have to distribute ICI on analog cable

In what would be a precedent-setting decision if anyone was still launching over-the-air television stations, the CRTC has decided that Videotron does not have to make room on its analog cable TV service for ICI, the ethnic television station that launched in Montreal last year.

The TV distribution regulations require distributors to include local television stations, which would normally mean that Videotron must distribute ICI in analog and digital to subscribers in the Montreal area. But Videotron is in the process of phasing out its analog cable system to make room for more digital channels and more bandwidth for video-on-demand and Internet service.

Videotron told the CRTC that fewer than 7% of its Montreal residential subscribers are still on analog cable, though that number is higher if you include institutional customers like hotels and hospitals, and those residences that have digital and analog on different TVs.

Quebecor had argued that the CRTC’s recent decisions to allow analog to continue its decline, by not licensing any new specialty channels for analog TV, for example, makes it clear that the transition to digital is more important than squeezing in another analog channel which would only disappear within a few years anyway as the analog network is dismantled.

ICI argued against the application, saying it would “result in ongoing and serious harm to ICI,” which is still struggling to develop an audience:

It has become apparent to ICI since its launch that ICI’s potential audience frequently consists of individuals that subscribe to Vide?otron’s “Classic Cable” service, which is the analog service. These potential viewers do not currently receive ICI. Vide?otron’s decision not to distribute ICI in accordance with the Regulations in not in the interests of subscribers as Vide?otron suggests. These subscribers would need to pay more to receive ICI, and make the transition to a more expensive digital service far ???sooner than they might otherwise choose – and even while many other services continue to be offered on an analog basis.

ICI pointed out that Videotron’s analog service in Montreal, which is much smaller than it used to be, still carries many U.S. signals, including two PBS stations.

And it said that while 7% may be small, it is still significant for a station that relies solely on advertising for revenue, and the fact that Videotron is still offering an analog service means it does not view this number as trivial.

It also said at least one program producer “decided not to purchase airtime on ICI due to the fact that the members of the target audience and multiple advertisers have advised the producer that they cannot receive ICI on their cable service.”

Videotron countered that it has received no requests from analog clients to get access to ICI, and its contractual obligations prevent it from removing other channels from analog.

In the end, the CRTC sided with Videotron, judging that its interpretation of the commission’s intention to encourage the phasing-out of analog cable is correct. It also cited the lack of opposition from people unconnected to ICI, as well as the substantial assistance the station is receiving from Rogers as a result of the sale of CJNT, in its decision.

Videotron has already begun the process of shutting down its analog network. After dismantling the network in Gatineau, it has started in Montreal with the Ahuntsic region.

Posted in My articles, Radio

CRTC wants to crack down on cross-border stations

UPDATED below with CRTC’s notice of hearing.

Tim Thompson, centre, heads Montreal sales for 94.7 Hits FM (WYUL) and other U.S. stations targetting Montreal.

Tim Thompson, centre, heads Montreal sales for 94.7 Hits FM (WYUL) and other U.S. stations targetting Montreal.

In an office building next to the Holiday Inn Pointe-Claire, Tim Thompson and his team of 10 salespeople and four promotions people are trying to get Montrealers to tune away from the big three music stations they’re used to — CHOM, Virgin Radio and The Beat — and tune into a station beaming its signal into the city from across the border in Chateaugay, N.Y., near Malone.

94.7 Hits FM (WYUL) markets itself as “Montreal’s Hit Music Channel“. While technically licensed by the FCC to serve this tiny New York town, its real goal is to get a foothold in Montreal with its 50,000-watt signal. And it succeeds, reaching most of the western half of the island.

The advantage to being a cross-border station is regulatory freedom. CHOM, Virgin and The Beat have to ensure 35% of the music they broadcast is Canadian. They have to ensure no more than half the music they broadcast is or was hit music (a condition originally meant to protect AM stations, now used to protect French stations in Montreal and Ottawa). They’re not allowed to air advertising in French.

As an American station, WYUL doesn’t have any of those obligations. It can broadcast whatever music it wants and programming in whatever language it wants.

“We really just play top 40, and that’s the beauty of our station,” says Marketing Director Tina Paylan.

Not only does the station target Montreal listeners, but advertisers as well, with about 90% of its advertising coming from this region. (It also targets Cornwall in eastern Ontario, in addition to Malone.)

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