BUSINESS

Cashing in on cable

ANN WALMSLEY October 21 1985
BUSINESS

Cashing in on cable

ANN WALMSLEY October 21 1985

Cashing in on cable

The episode of TVOntario’s awardwinning children’s show Polka Dot Door was playing on television in the Gloucester Hotel suite in London, England. But the audience was a lone buyer from Children’s Channel, one of Britain’s new cable programming companies, who was considering buying the series from the Toronto-based educational TV company. The special showing took place earlier this month during an international TV production trade show, and it is an increasingly familiar occurrence as Canadian companies fight for a toehold in the new, lucrative world of British and European cable and satellite broadcasting. Said TVOntario’s sales manager, Janice Currie: “We cannot afford to ignore this market.”

Although North America has had cable TV for 35 years and about 53 per cent of all homes carry cable, only eight per cent of European homes have cable TV. And governments in Western Europe and Great Britain are only now taking a serious interest in technologies that can bring dozens of channels and services, such as teleshopping and telebanking, into the home. West Germany, for one, is spending $1.6 billion over the next three years on four pilot projects. France has earmarked $8.5 billion to launch its first nationwide cable TV network. In Britain 16 companies have received franchises to operate the first regional cable systems and five more will gain franchise rights by January.

Political and regulatory snarls have delayed some of the schemes. But many Canadian companies are moving ahead now to ensure that they get a share of the first sales. Said Peter Lyman, a managing partner with the Ottawa communications consulting firm of Nordicity Group Ltd.: “It is a tough market, but Canada could get a decent chunk.” The Canadian government has launched an aggressive marketing strategy in Europe to assist Canadian firms. Since 1982 Ottawa has invested $400,000 helping Canadian companies compete against such major European suppliers as Siemens AG of West Germany and Phillips Electronics of Holland. And at cable TV trade fairs in Basel, Switzerland, in 1984 and Birmingham, England, last April, the government erected an elaborate flag-bedecked pavilion to house the displays of Canadian companies. Those fairs led to an estimated $12 million in business for Canadian firms. Last April five Montreal-based companies, including the consulting and engineering company SNC Group Ltd. and Le Groupe Videotron Ltée., a cable system operator, formed Cablon Telegroup specifically

to capture business in Europe.

Cablon has already invested about $200,000 competing for several projects, including consulting contracts for new London-area cable systems and for the installation of model systems in Basel and Geneva. Like many Canadian firms, Cablon is forming joint ventures with companies in each country in order to improve its chances in the face of nationalistic buying policies. Said Cablon’s president, Rainer Kölmel: “In the next three years we anticipate $5 to $10 million in business.”

Other companies have already found a niche. Lindsay Specialty Products Ltd., a cable electronics supplier in Lindsay, Ont., is installing cable systems in Ireland worth about $750,000 and is bidding for another $2-million contract in that country. It has also set up distributing subsidiaries in England and Sweden.

Still, private-sector executives say that technological change is always expensive and that to succeed in new markets it is important to find a foothold early. Indeed, as early as this fall that persistence may bring the Canadianmade Polka Dot Door to British children.

ANN WALMSLEY with PAULETTE ROBERGE in London and MICHAEL SALTER in Toronto