Tag Archives: V

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 TV

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.

Posted in Montreal, TV

CTV Montreal to reduce (but continue) local news during Olympics

CFCF’s anchor desk will sit empty until 6pm during the Olympics

Television changes during the Olympic Games. It’s like the usual rules get thrown right out the window. Canadian television stations relying mainly on rebroadcasting American shows in primetime? Not during the Olympics. NBC provides Olympic coverage, but CTV is doing its own thing entirely, focusing on Canadian athletes. TSN and Rogers Sportsnet in fierce competition? Not during the Olympics. They’re coordinating their coverage to give Canadians more choice, and some events (like the opening and closing ceremonies) will be carried on both simultaneously. Spending the bare minimum on Canadian content? Not during the Olympics. CTV and the other broadcasters are spending millions creating their own live, remote, high-definition programming that will dominate the airwaves throughout the Games.

It’s this domination of the schedule that has led to one change that requires approval by the broadcast regulator.

CTV asked the CRTC to temporarily relieve it from some local programming requirements during the Olympics. Currently, CTV’s stations in large markets (Toronto, Ottawa, Montreal, Calgary, Edmonton and Vancouver) are each required to air 14 hours of local programming during each week. Other stations are required to air seven hours of local programming a week. CTV asked the commission to, in light of how much time it needs to devote to the Olympics on its schedule, reduce that to seven hours a week for the entire network.

The CRTC agreed to this in a ruling issued June 27. That ruling lowers the minimum of local programming to seven hours for all stations, solely during the period of the Olympics (July 27 to August 12), and says it expects CTV to make up for the shortfall later in the year. (CTV said it would do so.)

CTV also asked for relief from a license condition requiring four hours a week of described video programming. Since described video is usually applied to things like dramas, sitcoms and documentaries, which won’t air much during the Olympics, the CRTC also relieved the CTV network from this obligation, again with the expectation that CTV would compensate for the reduction with an excess during the rest of the year.

No noon newscasts during Games

CTV Montreal (CFCF) normally airs 16 hours of local programming every week, including commercials (all of which is its newscasts – noon, 6pm and 11:30pm weekdays, 6pm and 11:30pm weekends).

The Olympic broadcasting schedule released Wednesday shows Games coverage throughout the day between the opening and closing ceremonies. Because the Olympics are in London, which is five hours ahead, live coverage begins as early as 4am and ends around 5-6pm Eastern time. This is the opposite of the Vancouver games, which were three hours behind and meant a lot of live broadcasting in the evening.

With the exception of the opening and closing ceremonies, the 6-7pm Eastern hour is left clear on CTV’s network, which leaves room for local news. This is followed by a four-hour Olympic Primetime recap of the day’s events from 7 to 11pm, which can then be followed by CTV National News and late local newscasts.

Mary Anne Gyba, programming manager at CTV Montreal, confirms to me that local newscasts will air daily from 6pm to 7pm and at 11:30pm throughout the Olympics, with the exception of the opening ceremony (Friday, July 27) and the closing ceremony (Sunday, August 12), which both run through the 6pm hour.

This means it will air 11 hours of local news the first full week and 10 hours the second week, far exceeding the reduced minimum requirement. (An alternative way of meeting the quota would have been to repeat local newscasts at 6am the next day, which CTV and Global both use regularly in underperforming markets, but with Olympic coverage starting at 4am, even this option doesn’t work for them.)

V stations get similar relief

In a similar decision issued the day after the CTV one, the CRTC also offered relief to two television stations – CFGS in Gatineau and CFVS in Val d’Or/Rouyn Noranda – from local programming during the Olympics. Both stations are affiliates of the V network, which is the French-language conventional television broadcaster in the consortium, and both are owned by RNC Media.

In its brief application, RNC said it was “highly likely” that V would not offer enough free time in its schedule during the Games for local programming, even though each station must broadcast only one hour and 15 minutes a week of local programming, which averages to about 10 minutes a day.

V’s Olympic schedule is much like CTV’s, with nothing scheduled during the 6-7pm hour (except during opening and closing ceremonies), and nothing after 11pm. V normally offers entertainment programming at 6-7pm instead of local news, to set itself apart from Radio-Canada and TVA. Still, it seems a bit incredible that such stations can’t find 75 minutes a week for local news.

The CRTC’s decision relieves them completely of the requirement to air local programming during the Olympics.

UPDATE (July 16): The CRTC has issued a similar decision relieving Télévision MBS Inc., which owns the V affiliate in Rivière du Loup (CFTF-TV), of its local programming obligations during the Olympics.

UPDATE (July 24): And finally, a decision relieving the owned-and-operated stations of the V network (CFJP Montreal, CFAP Quebec, CFKM Trois-Rivières, CFKS Sherbrooke and CFRS Saguenay) from their obligations. That application prompted a letter in opposition by SCFP union executive Denis Bolduc, saying that there was plenty of time in the schedule for V to air local news, that it should have asked for this exemption during its license renewal hearing last fall, and that the CRTC should maintain some minimum of local programming during the Olympics.

Posted in Media, TV, Video

On tue la une: An adult conversation about the media revolution

I'm using this still of Rue Frontenac's Gabrielle Duchaine to illustrate this post because my focus groups have told me that readers respond better to pictures of young pretty girls looking really serious with their hair flowing in the breeze as a camera slowly zooms in on them than pictures of Florian Sauvageau explaining the relationship between journalism and advertising while waving his hands around

In case you haven’t seen it yet, there was an interesting documentary, shown over the past two weekends, about the revolutionary changes happening to journalism and the media. It featured interviews with (francophone) journalists from various (Montreal) media, as well as with experts and people involved in the new media journalistic ventures that are slowly taking their place.

The second part of it aired this weekend on … V? Wait, that can’t be right. … Really? OK, V. You can watch the whole thing online starting here. It’s produced by B-612 Communications, which gave us La Maison de Maxim Lapierre, of all things.

What struck me about this documentary wasn’t so much that it brought anything new to the table – if you have even a passing interest in media you probably already know what’s going on – but the serious, sober way in which it’s discussed. It consists almost entirely of individual interviews, with Nathalie Collard and Patrick Lagacé of La Presse, with Richard Martineau and Benoît Aubin of the Journal de Montréal, with Gabrielle Duchaine of Rue Frontenac, with Stéphane Baillargeon and Bernard Descôteaux of Le Devoir, with Patrice Roy of Radio-Canada, Pierre Bruneau of TVA, Jean-Luc Mongrain of LCN, Jean Pagé and Ève Couture of V, and many others.

It’s jarring to see people like Martineau, Mongrain and Pagé speak so seriously about this, considering the personalities they’ve developed on TV. Maybe it’s just an impression I got, or maybe it’s an indication that they’re putting on a show for TV that doesn’t necessarily reflect their true personalities.

The doc also features interviews with people on the other side of the equation, like Jean Trudel of 25Stanley.com, Frédéric Guindon of 33mag.com, as well as experts like Florian Sauvageau of UQAM Université Laval.

If anything, the film relies too much on interviews, combined with a little bit of voice-over and edited with extreme close-ups. It also has bite-size bits of information scrolling along the bottom – some of which is dubious, like the claim that only UQAM offers a bachelor’s degree in journalism in Quebec, by which I can only conclude that either Concordia isn’t considered in Quebec or that it doesn’t offer a bachelor’s degree acceptable to the producers.

It also confines itself – it doesn’t talk to anyone at any anglo media, nor anyone at any media based outside Montreal. (Sauvageau is the closest thing they get to a regional perspective)

And it doesn’t talk to Steve Proulx. Or me. Or a bunch of other media experts named Steve.

Still, as a balanced discussion into the future of the media, and as a way to see your favourite media personalities in high definition, it’s worth a watch.