CRTC mulling four broadcaster applications to compete in pay TV market John Mckay Canadian Press
Tuesday, July 19, 2005 TORONTO (CP) - A two-decade-old duopoly in Canadian pay television is about to face a challenge from a quartet of applications submitted to the federal broadcast regulator in recent months. Since 1984 the country has been divided in two when it comes to pay TV, with Astral Media currently operating The Movie Network in the east and Corus Entertainment holding the rights to Movie Central west of the Lakehead. But the CRTC is expected to make public this week the business plans of the broadcast groups that hope to muscle in on services that represent up to 10 per cent of Corus's and Astral's annual profits (TSX:ACM.NV.A, TSX:CJR.NV.B). The names behind the applications are: Allarco Entertainment: Charles Allard of the Allard family's Alberta-based investment firm that used to own Movie Central back when it was called Superchannel, part of their now-defunct WIC (Western International Communications) broadcast empire. Groupe Archambault: A subsidiary of Quebecor Media (TSX:QBR.SV.B) which also runs the Videotron cable network and recently acquired the Toronto 1 station founded by Craig Media. Groupe Archambault is a major music and DVD retail chain in eastern Canada. Spotlight Television: The first to submit a proposal in January, triggering competing proposals, Spotlight LP's president and CEO is George Burger, a former executive at Alliance Communications, before the 1998 merger with Atlantis. His joint venture partners include Brian Cooper, president and COO of Score Media's Insight Sports (TSX:SCR.SV), and pro-sports mogul Larry Tanenbaum, chairman of the Kilmer group and Maple Leaf Sports and Entertainment (owner of the Toronto Maple Leafs, the Raptors, the Air Canada Centre and the digital specialty channels Leafs TV and Raptors NBA TV). Channel Zero: Created in 2000 and operators of the diginets Moviola and Silver Screen Classics, which proposes a premium service called The Canadian Film Channel. President and chief operating officer is Cal Miller, former president of the Toronto ad agency and magazine publisher Impact Graffiti, and a Canadian Association of Broadcasters committee member. The chairman and CEO, and co-founder along with Miller, is Romen Podzyhun, a former retail executive for LensCrafters Canada. April 14 was the deadline for submissions, which could set the stage for another major turf battle in the Canadian broadcasting industry when hearings begin, likely in the fall. With an obvious vested interest in the status quo, Corus and Astral are expected to make the case that little has changed since 1984 when it had become clear the country couldn't sustain multiple premium subscription services and the regional monopoly idea surfaced. And besides, it was argued, competition would drive up the cost of program acquisition from such American sources as HBO. Representatives of Spotlight decline to comment for now, but in a news release last spring they vowed to bring consumer choice to pay TV. They're expected to provide details shortly on a plan that would mean major financing to the Canadian TV and feature film industry. CRTC mulling four broadcaster applications to compete in pay TV market ...Continued "Our new service will reinvigorate the premium pay TV platform to everyone's benefit, drive the consumer migration to digital TV and reduce the grey market's impact," Burger said in an April statement, noting as well that the domestic TV and film market was starving for new capital. "Our capital, and the revenue growth that competition will drive, will help satisfy that need." Perhaps the most innovative proposal comes from the Channel Zero folks who say they have no intention of having consumers pay more for their service, nor of going head to head with the Movie Network and Movie Central. Rather, their plan is to have their commercial-free Canadian Film Channel - "all Canadian, all the time" - bundled with the other premium packages, which means access to two million subscribing households. The service would be financed by a portion of the revenues of existing and future licensees and with 50 per cent of that plowed back into Canadian production. Miller says the current duopoly arrangement clearly works. "I'm not convinced that opening up the pay market to head-to-head competition is necessarily in the best interests of the Canadian broadcasting system," he says. "There's only so many pay subscribers ... and I think what it would be is a lot of market share moving around and I'm not sure it would bring new subscribers into the marketplace." Instead, he is convinced their complementary specialty service is the ideal solution to getting exposure for Canadian films and to encouraging more such production. "I don't think the current system is entirely broken, it needs a bit of improvement," he says. Ian Morrison, spokesman for the independent media watchdog Friends of Canadian Broadcasting, makes the point that the duopoly was not exactly a CRTC gift but could have been broken any time before this if competitors had stepped up. But he says it looks as if things have changed sufficiently in today's more competitive digital media environment. "We're against monopolies. We would like to see people have a choice in the delivery of pay videos into their homes," Morrison says. "If Corus and Astral think they can beat this, they're probably wrong." © The Canadian Press 2005 __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com Reply with a "Thank you" if you liked this post. _______________________________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
