In the 100-channel universe, there will be something for everybody. Video games on channel 99; science programming over on 73; children’s shows on channel 84; the latest computer news on 92. Better yet, cable subscribers will be able to pick and pay for individual services instead of having to sign up for a package of channels, some of which they may not want. Television, in this scenario, will be a high-tech, consumer-friendly product, with strong Canadian programming available cheaply, efficiently and interactively. The question is: will it ever happen?
As the Canadian Radio-television and Telecommunications Commission (CRTC) began hearings last week to consider a new batch of specialty channel applications, the answer to that question seemed to be a resounding “maybe.” The 40 applications represent a cross-section of programming choices, everything from children’s fare, comedy and mystery to headline news, regional sports and computers—and even a horse-racing channel.
But as the hearings began, there was no consensus among the applicants, the CRTC and cable companies on how many openings there would be for new stations.
“The million-dollar question,” says Glenn Suart of Nordicity Group Ltd., an Ottawabased telecommunications consulting firm, “is how many applications will be granted, and where they will be placed.”
That is up to the CRTC. But beyond the competing interests of the applicants, technology is further complicating the commission’s task. For one thing, the cable industry claims that there is little or no space for new channels on the existing television spectrum. The ostensible solution to that problem is digital video compression, or DVC, which promises to transform the TV landscape. That technology would allow the industry to transmit six or more digital channels in the same spectrum space now occupied by one analog channel. It would also make possible “pick and pay” services, freeing customers from package subscriptions imposed by the limitations of analog technology. Not coincidentally, that flexibility would increase the appeal of cable services at the very time that satellite TV services are trying to win subscribers.
But the introduction of DVC in Canada is far behind schedule because of technical complications. Three years ago, the CRTC predicted that DVC would arrive by mid-1995 and be widely used by 2000. But with digital cable boxes still unavailable, the cable industry now projects a September, 1997, launch, roughly coinciding with the start-up of the newly licensed specialty channels. And the new decoders will cost a lot more than the 1993 estimate of $300— as much as $750, which the cable industry says will translate into a monthly rental rate of about $12 for the box alone. Rogers Cablesystems Ltd., the country’s largest cable distributor, now esti mates that only about 20 per cent of subscribers will have digita decoders by the year 2000.
The prospect of digital technology leaves the CRTC with three op tions. One is to license as many as 20 channels for the digital spec trum, an approach favored by cable companies. “Everyone want; choice, and digital is the only way to give it to them,” says Harrii Boyd, a spokesman for the Canadian Cable Television Association “Plus, we’ll never go digital if we don’t have services to launch i with.” A more conservative option is for the CRTC to license only : few—perhaps five or six—channels, squeezing them into the re maining analog space. Alternatively, the commission could licens« some channels for analog distribution, but mandate others for digital.
Some applicants—especially CHUM Ltd., which has a stake in nine applications—would welcome being licensed for digital in the hopes of longterm profits. But for others, a potential market penetration of 20 per cent after three years of operation is hardly appealing. ‘To launch a whole service just based on DVC would be very difficult,” says Andrew Alexander, president of The Second City, which (along with Vancouver-based WIC Ltd. and comedians Dave Thomas and Steve Smith) submitted one of the three applications for a comedy channel. “If they said to us ‘DVC or nothing,’ I think we’d have to take a serious look at the practicality of it.” Already, the applicants face an atmosphere of diminished expectations—thanks largely to the consumers’ revolt that erupted after the last round of specialty channel approvals. Under a practice known as negative option billing, seven specialty channels launched in January, 1995—The Discovery Channel, The life Network, the New Country Network, Bravo!, Showcase, WTN and the French-language news network RDI—were bundled with existing stations, resulting in an average monthly fee increase of $4 that was waived only if subscribers wrote or called to cancel. In the face of a public revolt, cable companies abandoned that billing strategy, leaving the new specialty channels—except WTN and RDI—to fend for themselves in a new optional cable tier. Those channels now reach only about 60 per cent of cable households in English-speaking Canada, compared with original projections of 80 per cent. And their ratings range from a 0.5-per-cent share of viewers for Bravo! and life to one per cent for Discovery—far below the 3.3-per-cent share enjoyed by YTV and A&E. “Negative optioning is a dead issue” in the current round of hearings, says CRTC director of broadcasting Peter Fleming. “Applicants have to be realistic—it’s going to be a rougher world to go into.”
In that rougher world, there is pressure on the CRTC to license more popular fare. A recent study commissioned by the Canadian Cable Television Association suggested that subscribers would look favorably on four programming categories: history, comedy, children’s shows and mystery. But of the 1,300 cable subscribers surveyed, 52 per cent said they already received enough channels, and another 28 per cent said there were too many stations. Which raises the question: do Canadians really want more TV? On the path to a 100-channel universe, it is a sobering thought.
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