Steve Ladurantaye

CBC

Canada’s broadcast regulator has cleared the way for the Canadian Broadcasting Corp. to transform itself over its next five-year licence term, in a ruling that allows for changes across much of the broadcaster’s operations. The licence, the first renewal since 2000, runs until 2018, and covers a time when the broadcaster is under financial pressure thanks to a $115-million reduction in the amount of money it receives from the federal government.

“All Canadians will continue to receive the quality services they expect from their national public broadcaster,” said Jean-Pierre Blais, chairman of the Canadian Radio-television and Telecommunications Commission, as he announced the renewal last week. “In the ever-changing media landscape, the Canadian Broadcasting Corporation will continue to play a key role for the vitality of Canada’s French- and English-language culture, throughout the country.”

Here are some highlights from the renewal.

Radio advertising

The biggest change to CBC’s licence allows the broadcaster to put ads on Radio 2 and the French-language Espace Musique. The request wasn’t altogether new – CBC was allowed to advertise on the radio until 1975 when its licence was renewed and asked the commission to allow sponsored ads at its last renewal (it was denied).

The CBC said adding advertising could help it make up to $25-million a year by the end of the five-year licence.

The CRTC decided advertisements wouldn’t ruin the services, but didn’t share CBC’s enthusiasm. It only gave the broadcaster three years to experiment with advertising, and limited it to buying national ads (which only account for about 30 per cent of all radio advertising in Canada).

It also decided that musical quirkiness was at the heart of both services, and that it didn’t want to see that change as the services tried to make themselves more attractive to advertisers. So it wrote some conditions into its new licence: Espace Musique must “broadcast a minimum of 3,000 and Radio 2 a minimum 2,800 distinct musical selections each broadcaster month.”

“The commission’s research demonstrates that a key measurable characteristic that distinguishes the programming of Espace Musique and Radio 2 is that they broadcast a far greater number of distinct musical selections than commercial stations.” the CRTC wrote. “This practice helps ensure that these services contribute to the diversity of programming available to Canadians.”

Mandatory carriage

While almost two dozen television channels appeared in front of the commission in late May to ask to be included in basic digital cable packages across the country, commissioners were already considering a similar request by CBC for its English and French language news networks.

Mandatory carriage means that a channel is broadcast into every home. It is a highly coveted designation because it comes with subscription revenue and the ability to charge more for advertising because of the potential number of viewers.

The two networks, RDI and CBC News Network, already enjoy this privilege, but only in certain markets – the French-language RDI is mandatory in English markets and CBC News Network is mandatory in French markets.

The CRTC decided to leave this as-is, something the CBC likely made easier by not asking for an increase to subscriber rates. (RDI costs English-market subscribers 10 cents a month, CBC News Network costs French-market subscribers 16 cents a month).

Read the rest at the Globe and Mail

CBC 013-263

George Burger

Cable and satellite companies, already dealing with competition for subscribers from companies such as Netflix Inc., have a new threat to worry about as a handful of technology-heavy startups prepare to launch rival television services at lower prices.

Internet protocol television (IPTV) – which delivers television signals into homes through the Internet over existing network infrastructure – has created an opportunity for a new type of company to get in on the country’s $17-billion television distribution industry that is dominated by a few large players such as BCE Inc. and Rogers Communications Inc.

While several small companies have for years considered offering television subscription packages, they have been frustrated by bandwidth caps that make their services too expensive for the average viewer and have had difficulty securing access to the channels that viewers demand be part of any television package.

That’s about to change Toronto-based VMedia Inc. has developed technology that compresses signals, reducing the required bandwidth and making its service a viable alternative to traditional cable and satellite packages. It will begin selling subscriptions in the Greater Toronto Area on Wednesday, after two years of planning. Zazeen Inc., another Toronto-based provider, recently began offering its service on a test basis after years of development.

The Canadian Radio-television and Telecommunications Commission has granted about 20 IPTV licences to small companies such as VMedia, it said, but most have small, regional ambitions and only a few are likely to make it to market owing to the barriers they face in securing access to channels and developing the technology needed it to make it into living rooms.

“We learned the hard way how difficult it would be to license content when you are a no-name company,” VMedia chief executive officer Alexei Tchernobrivets said.

For the incumbents, the startups represent a new front in the cord-cutting battle that has seen customers move to cheaper online alternatives such as Netflix and iTunes. But the new companies face a host of challenges, including the huge marketing budgets of established players and a lack of trust for new entrants, that could be difficult to overcome.

The companies – mostly centred in Montreal and Toronto – have been working out deals with content providers such as Bell Media and Rogers Media for the past two years, and building the set-top boxes customers will need to subscribe to their services. A few are ready to challenge the incumbents’ hold on 11 million households, who pay an average of $50 a month for their subscriptions. (Federal rules require broadcast companies like Bell and Rogers to sell access to their channels, even to rival TV distributors.)

Read the story in the Globe and Mail

CRTC IPTV

Global News’ new digital sites are about more than breaking news – they are an attempt by one of Canada’s largest broadcasters to get in on one of the only bright spots in an otherwise stagnant advertising market for media companies across North America.

The company said Monday its new website  and its related mobile sites will feature editorial content commissioned by advertisers, but produced by journalists. As other forms of digital advertising recede, companies have shown a willingness to spend on branded content as they try and engage consumers who often ignore more obvious forms of advertising.

The content can take various forms – one model sees a company buy ad space around a “broad theme of interest to an advertiser,” but the company doesn’t have any control over the editorial content that ultimately appears on the site. Companies can also directly commission stories, but they would be produced by “an independent writer/producer who is not a member of Global News editorial staff.”

“Brands are willing to spend money on branded and sponsored content because their message is more likely to be heard via content than advertising,” said Chris Hogg, chief executive officer of branded content specialists Digital Journal Inc. “If done well, branded content can be presented in a consumption format consumers are accustomed to – so engagement, sharing and click-through rates will often outperform traditional banner ad responses.”

The strategy is increasingly common – news outlets including The Globe and Mail and Toronto Star are also trying to court advertisers for similar projects.

Global already works with advertisers to produce branded and sponsored content on its television newscasts, said Ron Waksman, senior director of online and current affairs. Some examples include a series on women’s health and another on immigration – both were sponsored by large corporations.

He said there are strict editorial rules imposed to ensure advertisers can’t meddle with content, and that the television network “turns down a lot more sponsored series than we accept.”

“There is an opportunity here,” said Mr. Waksman. “Quite frankly, we need to monetize our online properties effectively and this offers a diversified revenue stream and can bring in some digital dollars instead of digital dimes. I don’t think anyone can rely on display ads anymore.”

Read the story in the Globe and Mail

Tens of thousands of Canadians wake up early each day to watch Mass on Vision TV, but when Catholics around the world were learning about their new Pope, the only channel in Canada dedicated to matters of faith was showing a 13-year-old rerun of a short-lived television series.

The channel, part of Moses Znaimer’s ZoomerMedia empire, has enjoyed a guaranteed spot on Canadian televisions for the last 25 years, but could lose the designation as the Canadian Radio-television and Telecommunications Commission takes a new look next month at which channels must be included in basic cable and satellite packages. That placement is vital to Vision’s survival – $8.6-million of its $26-million in revenue comes from mandatory subscription fees from Canadian television subscribers.

“Twenty-five years ago, it was determined that this service was essential and necessary to the kind of country we would like to evoke and it was given the privilege of inclusion on basic,” says Znaimer, whose ZoomerMedia Ltd. bought the channel in a deal that closed in 2010. “So why remove it? It would be a piece of vandalism.”

The cable and satellite companies that deliver the channel to more than 10 million homes say they are tired of Vision straying from the religious content it is required to broadcast in exchange for its licence – Murder She Wrote is its highest-rated show and Downton Abbeyfollows close behind – and want the channel to live or die in the 500-channel universe on its own merits.

“Vision TV is a classic example of a programming service that has been granted numerous regulatory advantages … but has failed to ensure it has maintained a strong audience base,” wrote Rogers regulatory director Peter Kovacs in a filing to the CRTC.

Shaw Communications’ Dean Shaikh took a similar approach in Shaw’s letter to the regulator: “The applicant has not demonstrated that its business model justifies mandatory distribution under the terms proposed.”

It’s an argument that resonates with many Canadians, who are tired of subscribing to dozens of channels they don’t want in order to access the few that they do. Thousands of people wrote to the CRTC during a public consultation period into so-called mandatory carriage – and many of them have said they don’t want to pay for any channels they don’t watch. (Many also sent letters specifically supporting Vision.)

Some of the channels looking to be included on the basic tier at a hearing next month include Sun News Network and Starlight: The Canadian Movie Channel. Others, such as Aboriginal Peoples Television Network, already have a home on basic but are asking for more money to fund operations.

Of all the applicants, however, Vision is unique in that it already has mandatory carriage and doesn’t want to increase the fee charged to viewers.

The CRTC will need to determine which, if any, of the channels provide a unique service.

Read the full story at the Globe and Mail

Vidéotron Ltée is saying non to Netflix Inc.’s Canadian ambitions.

The Montreal-based cable giant, owned by Quebecor Inc., plans to launch Illico Club Unlimited, a Netflix-like service that will offer hundreds of movies and television shows a month to its subscribers for just under $10. While several of Canada’s cable and satellite companies allow subscribers to access content online, this service will be available to anyone with an Internet connection and will allow the Quebec company to compete for viewers outside its traditional markets for the first time – starting with Ontario, when it launches this weekend.

“We bought Canadian rights so we could go across Canada if there is demand,” said Manon Brouillette, consumer market president at Vidéotron, adding that up to 10 per cent of the service’s content could be in English. “Netflix was not a big threat at first but we’ve seen their percentage quietly growing and we decided we must do something or else the market would be open only to them.”

While the vast majority of Netflix content is offered in English only, the U.S.-based company signed a deal with Radio-Canada last year to offer more French-language content and said Thursday “it has made every effort to acquire Canadian titles that reflect the rich cultural, geographic and liguistic diversity of this country.”

While Canada has not seen the same level of cord-cutting as the United States as viewers look for less-expensive ways to access content, cable and satellite companies are anxious to develop their own products that enhance their offerings. About 10 per cent of adult Canadians subscribe to Netflix, the Canadian Radio-television and Telecommunications Commissioner reported in September, and the number is expected to increase.

So far, however, that hasn’t caused them to give up on traditional television packages. Those without the service watch roughly 16 hours of regular and Internet TV each week, while those with Netflix watch about 21 hours a week, including TV, Internet TV and more than five hours of Netflix programming.

One thing keeping Canadians tied to their cable and satellite companies are the data caps on their Internet connections – some viewers have found that their Internet bills increase prohibitively when they cancel their traditional television services and try to download all of their favourite shows and movies.

Vidéotron hopes to address this by introducing a flat-rate price for unlimited downloads – $10 a month for any customer with at least three services with the company (cable, cellphone and Internet) and $30 a month for those with fewer services. Any of its digital customers – there are about 1.4 million digital subscribers out of 1.8 million – who use one of their set-top boxes won’t be charged for data when using the service.

Read the full story at the Globe and Mail