TORONTO – Four new pay television license applications are set to be made public today, one of which tugs on the Commission’s Cancon heartstrings – and if approved, would yank open the existing pay TV channels’ purse strings.
New pay television applications from Allarco Entertainment, Groupe Archambeault, Spotlight Television and Channel Zero will be made public at 11 a.m. this morning, www.cartt.ca has learned.
The Allarco application is backed by Dr. Charles Allard and his family, who used to own WIC and Superchannel and who still own several smaller broadcasting assets in radio in western Canada. Groupe Archambeault is the retail video rental and sales division of Quebecor Media. Spotlight’s application was made by former Alliance Atlantis executive Charles Burger and is backed by Insight Sports and its owner Larry Tanenbaum (the operating partner of the Toronto Maple Leafs).
But the application sure to get tongues-a-wagging is the one from Channel Zero called the Canadian Film Channel. Channel Zero currently owns and operates short film channel Movieola and old film channel Silver Screen Classics – as well as the AOV-branded adult digi-nets.
CFC will feature nothing but Canadian films. One hundred percent Canadian, one hundred percent of the time.
The most interesting part of the application (or maybe the scariest, if you own The Movie Network and Movie Central) is CFC’s proposed funding model. “The Canadian film channel’s mandate should be supported by an additional contribution of gross revenues from all current and any future pay licensees in the general interest English language pay arena,” it says in application-speak. (It would be a cable and DTH must-carry, too.)
In real terms, CFC says that 100% of its annual budget, or $24 million should come directly from the top line of the existing pay services, TMN and Movie Central. “We propose that 12.9% of the gross revenues of TMN and Movie Central be directed to the Canadian Film Channel to provide 100% of its revenues,” Channel Zero’s president Cal Millar told www.cartt.ca.
Does he expect Corus Entertainment and Astral Media (owners of Movie Central and TMN, respectively) to be supportive? “We don’t expect them to be thrilled right out of the box,” said Millar. “On the other hand, is this the worst thing that could happen to them? Absolutely not. Is it reasonable to think at their next license renewal the Commission will raise their Canadian production expenditures like they did with the pay services that were licensed in 1996 – when they were renewed? Yes.”
(In January 2004, when the CRTC renewed the licenses of channels which launched in 1997, such as Teletoon, it raised the required level of spending on Canadian productions for those earning fat profit lines by up to 7%.)
With the recent solid returns now being earned by TMN (which owns a pay-TV monopoly east of Manitoba) and Movie Central (which has the west), an increased Canadian production spending requirement from the CRTC is certainly not out of the question.
A full 50% of CFC’s revenue would be driven back into programming of original Canadian content, where the channel would hold first window rights for everything, except for a flick that ended up with a theatrical release.
CFC plans to give out numerous $5,000 grants for experimental films, fifty-two $100,000 awards per year for what it terms mini-features and a dozen $500,000 awards annually for new original films.
Plus, the channel will have an acquisition budget and a huge promotional budget in order to market the channel and its new Canadian content. “We believe if you create it, promote it and exhibit it, CPE – the same acronym we use for Canadian production expenditures – you will create an audience,” says Millar, who adds that with 100% Cancon, a Canadian film will always be on in prime time.
Millar pointed to the enormous promotional work CTV does in hyping Corner Gas and that Alliance Atlantis does with Trailer Park Boys as examples of how it’s nice to have great shows, but they must be promoted and shown in good prime time slots in order to draw an audience.
“We didn’t just want to put in an application that was just more of the same,” added Millar, where there would just end up being more competition for buying Hollywood blockbusters and other American series – and then more promotion of that content – in the hopes of getting people to stick around on the channels and watch the few Canuck movies.
In fact, adds Millar, he doesn’t think there’s room in the marketplace for pay services similar to what’s already there. “I think that Canadians are well-served by getting the best of American programming, combining it with the best of other nations’ programming, and then the best of Canadian programming, on TMN and Movie Central as is,” he says. “We don’t think there are a million extra subs out there clamoring to subscribe to pay television.”
Astral Media and Corus Entertainment executives declined comment when contacted by www.cartt.ca on Wednesday, pending official release of the applications.
One additional point of interest is that the 100% Canadian Channel Zero application probably caught the attention of one Charles Dalfen, chair of the CRTC. Back in 1983, after completing a stint at the Commission, he was a minority owner of C-Channel, the ill-fated, all-Canadian pay TV channel which died less than four months after launch due to lack of revenue and lack of interest. (An earlier edition of this story suggested Dalfen was president of C-Channel, which was not the case. www.cartt.ca regrets the error.)
Look for a public hearing on these applications to be set for October or November.
