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Friday, July 09, 2010

Are you lost in the high channels?

I’ve been trying to get a fix on Canadian specialty channels on and off for weeks now. They proliferate like wild weeds, or disappear mysteriously from my cable menu overnight. And without my say-so. Most of it’s cheap and cheerful, mindless and mundane. But I can’t avoid these channels, since I’ve signed up for specialty packages from my TV signal provider.

Oddities abound. How, for example, does Rogers-owned Citytv’s home decorating/fashion/food program CityLine qualify for a regular slot on the Biography Channel, also owned by Rogers?

How come, when I turn in prime-time to the supposedly tech-oriented G4 (Rogers, the channel’s Canadian co-owner, is also its cable distributor, an unallowable conflict of interest just a couple of decades ago), I get back-to-back reruns of the The Office?

How does Ghost Hunters, about a group of self-styled American paranormal researchers (led by a pair of former plumbers) investigating haunted houses, and Operation Repo, a so-called reality show about the adventures of a U.S.-based property repossession outfit, qualify as the prime-time mainstays of the Outdoor Life Network?

And how did A&E — once a showcase for quality drama, performance programs and arts documentaries — morph into the home of Dog the Bounty Hunter? The show — and countless reruns — consume a disproportionate amount of the American-owned channel’s prime-time hours without raising the Canadian broadcast regulator’s eyebrows.

With a few exceptions, the wacky, wild-west world of specialty TV doesn’t have to deal with the sort of programming promises that the Canadian Radio-television and Telecommunications Commission imposes on conventional broadcasters. Some specialties (History, Discovery, MTV) must carry as much as 70 per cent CanCon, but others (National Geographic) need very little and still others (Mystery) none at all, as long as they’re not competing with existing Canadian services.

It’s like a fin-de-siècle frontier sideshow. Sudden rebranding to target a better demographic is frequent and is rarely opposed by the CRTC. What used to be the Drive-In Channel, featuring old movies, is now the Sundance Channel, a showcase for independent and alternative cinema. What used to be CBC Country Canada, focusing on rural Canadian issues, changed overnight to Bold, a mix of drama, arts, comedy and sports. The Fine Living Channel is now the DIY Network. Thriller and horror-movie fortress Scream has been replaced by the gentler, not-so-bloody Dusk.

Business is good

What’s behind the curtain isn’t always what the poster illustrates. But the question is: Should we care?

After all, one man’s rubbish is another’s treasure. And most of the 120-odd Canadian specialty channels (the numbers keep changing), accessible nationwide via cable and satellite (I pay $150 a month, including tax, for the entire cable basketload, though most subscribers opt for smaller packages costing between $80 and $100) are profitable, more profitable per dollar invested than conventional TV.

“At the top of the pile are the sports, news and children’s educational channels,” says Paul Gratton, a former CHUM Television vice-president and former chair of the Canadian Media Fund, which helps arrange funding for TV and other media productions. “In the entertainment area, Space, Bravo, Showcase and History are in a class of their own, making lots of money.”

They have are adding employees, while commercial network television is in rapid decline, says Gratton. “The collapse of conventional television, which for so long was a licence to print money, has been spectacular and fast: just five years.”

In fact, according to Friends of Canadian Broadcasting, in Canada the specialty business is now larger than the conventional-TV business.

“It’s amazingly successful, when you consider the size of the domestic market and the fact that we live alongside a cultural behemoth whose TV signals we’ve been able to get over the air for next to nothing,” Gratton says.

“It’s a model that doesn’t exist at such a level of complexity and diversity anywhere else in the world. In Europe, if you have satellite TV, you might get 15 channels — but 100? Only in Canada.”

Helping the bottom line is the fact that specialty channels can tap into niche audiences and advertisers. “Take gardening,” says Ian Morrison of Friends. “If you can get 50,000 people watching, which is nothing in television terms, somebody who sells fertilizer is interested in those people. They’re the potential customers. And they’re not wasting their advertising buy on the general public.”

Another major reason for the success: unlike conventional broadcasters, specialty channels have two streams of income, with subscription fees from viewers as well as traditional advertising dollars.

Of course, specialties usually come bundled and uninvited in packages that include what we really want to pay for. Signal providers make most of the package choices for us. For instance, Bell TV customers who want to get CNN will order the “News & Learning 1” theme pack, which also signs them up for CNNHD, TLC, Discovery Canada, Animal Planet, Viva, CNBC, History, HLN, CP24, BNN, BBC World News, 680News, CTS and CJAD.

Ask your provider what a particular specialty channel costs on its own and you’ll get a stand-alone price that you might balk at paying. Still, the overall price is cheap, Gratton insists. “You won’t find buck-a-channel deals anywhere else in the world.”

Why you see what you see?

If business is that good, how much money is involved?

Well, the “pass-through” fees for packaged specialty channels — that’s the portion of your bill that cable and satellite companies collect and pass on to the channel owners in exchange for carrying their signal — are considered competitive information and are never made public. But insiders tell me it’s rarely a fixed price over a consistent period of time.

The owners of Canada’s specialty channels — the major stakeholders are CTVglobemedia, Rogers Media, Corus Entertainment, CanWest Global (now being acquired by Shaw Communications), Astral Media and CBC-Radio Canada — adjust the prices of their top performers regularly to induce signal carriers to take on new channels. Those prices, which ultimately determine what cable and satellite subscribers pay, may vary from one carrier to another and are negotiated in the greatest of secrecy.

Cable and satellite companies are the gatekeepers here. The limitations on how many channels they can carry guarantee a substantial price of entry into the distribution system. In fact, right now, more than 100 specialty licence-holders already approved by the CRTC are lined up, waiting for a home on cable or satellite. Most won’t get a pass unless their potential audience appeal suddenly becomes blindingly apparent.

Also undisclosed for competitive reasons are the numbers of subscribers who have signed on to each specialty service. You can get a rough idea from raw data — statistical and financial summaries published every four years by the CRTC — of the fiscal health of the channels (see sidebar). But because base subscription fees fluctuate and are top secret, audience numbers are known only to channel owners.

But is it good TV?

Scrolling from 01 on my cable menu through to its end, Channel 711 (I’m discounting the nearly 200 audio-only niche music and radio channels) is a hand-crippling task. There are premium-priced ethnic services, French-language Canadian channels, regionally time-shifted and HD duplicates, and the plethora of discretionary pay-TV and video-on-demand services. You’d think there’d be something worth watching in such a lavish TV buffet, the biggest in the world.

But when Alberta’s culture minister, Lindsay Blackett, told assembled TV producers and broadcasters recently at the Banff World Television Festival that Canada’s homegrown TV productions are “crap,” he drew both industrial ire and consumer praise.
He gave voice to what’s on the minds of a lot of Canadian TV viewers who are lost in the specialty channel maze.

Will the inevitable expansion of the Canadian specialty TV template enrich us, or will it simply contribute to low-budget, small-idea amusements that have diverted advertising dollars away from the production of quality programs?

“Conventional television deals a lot with entertainment programming, which is very expensive,” says Morrison. “It costs at least a million bucks to make one hour of a Canadian series. The Americans, some of their major television dramas cost $10 million an hour, and the Canadians can sort of rent them, or get them from Hollywood in the $300,000 range.” Meanwhile, he adds, many specialty channels have costs in the range of $5,000 to $20,000 per hour.

“Take the Weather Channel. You can pretty much run it with computers and one camera pointing at one person. And it just depends on the genre of programming. I mean, just go through them: how to build homes, how to fish, how to do garden. These things can be done in very simple production values and they don’t have to appeal to a mass audience.”

While specialty TV obviously isn’t the only reductive force at work on television, it’s hard to argue that it’s not a contributor. Specialties, because of their sheer volume, can each claim only small slivers of the total TV revenue pie. A few make millions, some operate on less than it costs to produce a decent made-for-TV movie and a small number are in the red.

Should some of the specialty profit go back into quality? Morrison, who says the quality of Canadian specialty TV is already improving, thinks so. “Some of these profits are so large, in a regulated industry, that the public interest might involve the CRTC saying you should be spending a little more on Canadian programming.”

Canadian-content regulations could also be tightened, he says. After all, “you and I didn’t decide who to pay a dollar to. The CRTC decided.”

If most of the channels are only capable of producing — or acquiring in the after-market — low-cost niche programming, some people will watch it, of course, while small clusters of Canadian business people make a living from it. But do we need more of it?

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