Industry Update – CRTC: Mandatory Carriage vs. Channel Drift

On April 23, 2013, the CRTC began a public hearing on “distribution orders under section 9(1)h) of the Broadcasting Act” – in other words, mandatory carriage orders. Mandatory carriage automatically adds a service to a cable/satellite/IPTV provider’s basic package, and – unless the service is distributed for free – requires distributors to pay that service a wholesale fee per customer. This is a privilege ten services currently enjoy. A new or existing service granted mandatory carriage is the CRTC equivalent of winning pole position in a horse race. It practically guarantees that service some form of subsidy.

New and/or unlaunched services applying for mandatory carriage, such as Starlight: The Canadian Movie Channel, ACCENTS, and FUSION, are forward-looking statements in search of stable funding. Starlight, in particular, has made some noise in the media about its commitment to Canadian film. Existing services, such as Sun News Network and Vision TV, see mandatory carriage as the way to secure their futures.

At the other end of the spectrum, there’s a Steve Ladurantaye Globe and Mail piece about four services — Blue Ant Media’s Travel + Escape, OUTtv Network Inc.’s OUTtv, Stornoway Communications’ ichannel, and ZoomerMedia’s ONE – asking the CRTC for licence amendments. To that end, the Independent Broadcast Group — the four previously mentioned broadcasters, plus APTN, Channel Zero, Ethnic Channels Group, TV5 Quebec, and ZoomerMedia — lobbies to protect the independent broadcasters’ interests.

ichannel, OUTtv, ONE, and Travel + Escape’s renewals are part of the same CRTC Broadcasting Notice of Consultation as the applications for mandatory distribution orders. To demonstrate what a new “basic” service could become in the future, I point to two current services on differing prosperity levels — OUTtv and Vision TV — as they have at least one thing in common.

OUTtv debuted as lesbian/gay/bisexual/transgender (LGBT) service PrideVision, and struggled to attract viewers in its early days – it aired pornographic content in the late night hours, and lacked a West Coast feed. Shaw Communications, in particular, resisted PrideVision. Headline Media Group (later Score Media Inc.) sold the service in 2004, to a consortium led by broadcaster William Craig.

PrideVision, by then doing business as HARD on PrideVision, briefly aired porn between 9:00 PM and 6:00 AM. In 2005, HARD on PrideVision spun off into a separate service (now Playmen TV), making the “new” OUTtv a full-time, general-interest LGBT service. Today, OUTtv is almost fully owned by Shavick Entertainment (Re:Source Media owns 4.16%), and has 939,200 subscribers as of 2012. Arguably, it took a decade, two ownership changes, and the “spinoff” of a questionable program block for OUTtv to find its footing.

Vision TV began in 1988 as a multi-faith religious service, initially owned by a company that evolved into S-VOX Foundation. ZoomerMedia acquired the service in 2010. Under ZoomerMedia ownership, Vision TV is more of a general-interest service for older audiences. ZoomerMedia’s chief argument is that cable and satellite companies want to remove Vision TV from their basic tiers, in part due to Vision TV straying from its original mandate. In the event Vision TV is bumped off basic cable, ZoomerMedia will attempt to amend Vision TV’s licence.

Where OUTtv and Vision TV intersect is their desire to amend their licences, and reduce Canadian content levels. This is why I don’t see a future for Starlight, EqualiTV, Dolobox TV, or other unlaunched services vying for mandatory carriage. The history of Canadian specialty services suggest that a service will rebrand, and/or amend its broadcasting licence, at some point. Even well-established, profitable services like The Comedy Network want to reduce their Canadian content levels.

Canadian television is littered with services that failed – C Channel, WTSN, The Life Channel, Edge TV, Cool TV, X-Treme Sports, Fox Sports World Canada, etc. Other services have new storefronts – Drive-In Classics is now Sundance Channel, TV Land is now Comedy Gold, mentv/The Cave is now H2, and so on. Services might wrap themselves around noble goals – engaging youth, reviving the Canadian film industry’s fortunes, appealing to underserved minority groups. What matters is whether the services are managed well enough to survive on their original mandates, and whether channels will still be maintained, if their preferred source of funding doesn’t materialize.

In the end, I don’t think CRTC’s current mandatory carriage hearings will produce much of value. In 2013, there are too many examples of services that meant well, but gave in to the pressures of commercial broadcasting. I rarely see a CRTC licence amendment that increases Canadian content, or strengthens a service’s mandate – maybe AUX’s 2011 application to play more music videos, which the CRTC denied.

I neither want to see overfunded services that can’t sustain themselves, nor services using mandatory carriage orders as a substitute for venture capital. In the wake of CRTC’s second round of Bell-Astral hearings, there are more pressing matters in Canadian television.


One thought on “Industry Update – CRTC: Mandatory Carriage vs. Channel Drift”

  1. what about the application by SUNNEWS – for an amendment to its license? You did not mention it at all

Comments are closed.