Last week’s announcement that Canada’s two competing pay TV networks,
First Choice and Super-channel, would merge as First Choice/Superchannel and split up the Canadian market came as no surprise. Well before pay TV began in Canada in February, 1983, industry observers warned that the Canadian market was too small to support more than one network.
Still, the Canadian Radio-television and Telecommunications Commission awarded seven national and regional licences because, in the words of former CRTC head John Meisel, it was “our last chance to get Canadian content right.” Most of those networks have since floundered or died because of cutthroat competition, a lack of diversity in their offerings and an unreceptive audience. Indeed, only 11 per cent of the potential market, an estimated 530,000 homes, subscribed to the new service. Now, financially troubled First Choice and the slightly healthier Superchannel are confident that, by dividing the national market between them, their fledgling industry will finally find its economic footing.
Last week the CRTC announced it would hear the networks’ proposal in July. If it approves the new plan, Torontobased First Choice Canadian Communications Corp., whose Ontario vice-president, Jon Sian, was pivotal to the deal, will provide a movie-dominated service east of the Manitoba border. Meanwhile, Edmonton’s Superchannel will relinquish Ontario operations and transmit a similar service to British Columbia, the Yukon and the Prairies. In November the CRTC will decide on another proposal from the new firm—to own jointly and operate a new national service featuring programming similar to the U.S. Disney Channel.
Even if the CRTC approves the co-operative survival plan, the new services will face vigorous competition for audiences. Beginning in September, viewers will be able to choose from a more attractively priced range of services, including the newly licensed Action Canada Sports Network and the rock video MuchMusic Network. Market fragmentation is not
the only threat to pay TV’s health. Some observers maintain that it will continue to falter unless the networks also manage to convince the public that the convenience and variety of their offerings are superior to the advantages of video cassette tapes in the home. Said Finlay MacDonald, president of the Halifaxbased Star Channel pay TV network, which went into receivership last No± vember: “There was a a limited market, and we I operators limited it furjjjj ther because we never ex| plained what pay TV is.” z At last the battered inii dustry and its regulator are trying to tune into what the public wants from the service. Said John Grace, a former CRTC commissioner: “The lesson is that you should make sure you have a cow before you decide to milk it.” Now that the nature of the beast is better understood, pay TV may have a fighting chance.
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