TORONTO – Reports swirling around all weekend long after the Liberals’ cabinet retreat in Regina suggest that Heritage Minister Liza Frulla is hoping to get her fellow cabinet ministers on-side to ask the CRTC to review or rescind its June 16th decision to license a pair of satellite radio companies.
Both companies are taking the reports seriously, executives told www.cartt.ca on Monday. Cabinet has until September 14th to decide what it may do.
“From the outset Madame Frulla has been worried about the overall number of French stations. No surprise,” said SIRIUS Canada president Kevin Shea. “In fairness, she made that very clear some time ago.” (SIRIUS Canada is a partnership between U.S. company SIRIUS Satellite Radio, Standard Broadcasting and the CBC)
Reportedly, Frulla buys the argument made by CHUM Ltd. and Astral Media, among many others, that the amount of required Canadian content (eight channels) is not enough and the promise of three of those eight channels in French also misses the mark.
CHUM and Astral were granted a terrestrial subscription digital radio license but have said in the past that with the two satellite systems already running, that it would likely not launch. In fact, the companies want the licenses rescinded and say that grey market subscription radio is not necessarily a bad thing.
“CHUM has had a major disinformation campaign on a whole bunch of things, so what we are busy trying to do is… ensure that cabinet fully understands all the benefits of satellite radio and – more importantly – that if they send this back, there may not be any interest from either ourselves or Bitove (to continue),” cautions Shea, referring to the other license-holder, John Bitove’s Canadian Satellite Radio. CSR is a partnership with U.S. company XM Satellite Radio.
Backers of the decision (which outnumber opponents by a wide margin) say that the CRTC got the decision just right, balancing the interests of our Broadcasting Act and its Cancon language with a new technology that is growing here already and that regulators are probably powerless to stop. It also empowers two new Canadian companies to grow and employ people while giving back to Canuck musicians – and exposing them to a North American audience.
There simply isn’t a business case for a Canadian company to build its own satellites for such a venture. As well, the grey market in satellite radio in Canada is estimated at 100,000 and retailers such as The Source and Best Buy are itching to sell the receivers here. In fact, Canadians can purchase new cars with the satellite receivers already factory-installed.
The only bit of budging that SIRIUS Canada is considering is to bump its number of French channels from three to four, a full 50% of its required Canadian radio channels. However, no decision on that is yet close, says Shea.
“This is just the wrong time to be turning back the clocks on our broadcasting system,” added CSR president Steven Tapp when he talked to www.cartt.ca Monday afternoon.
The licensing was a well-considered decision that was over a year in the making that politicians shouldn’t be sticking their noses in at this late date, Tapp and Shea added. Both are working hard to make sure ministers understand the issue fully.
“There’s been a very full and complete CRTC hearing on this matter and there’s been no new information since then,” said Shea. “The Commission, in its wisdom, said that if we don’t do something, Canadians will be left out (of satellite radio).”
What’s been sometimes ignored by opponents is that many Canadian artists back the Canadian satellite license holders because their music will gain a new outlet beyond conventional radio – one that will gain them North American exposure. “I talked to a buddy of mine, Mike Timmins from the Cowboy Junkies, and he told be they get more play in the States right now on XM than he gets in Canada since his last hit,” says Tapp.
“We want to get out and offer the service before the grey market eats this market potential alive,” adds Tapp. “It’s appalling that our opponents think that a better solution for Canada is to let the grey market take hold.”
A recent study released today by SIRIUS Canada shows that Canadians are very interested in satellite radio, and that 76% of Canadians support the CRTC’s decision to grant satellite radio licenses to Canadian providers.
Furthermore, only 21% of Quebecers think the federal cabinet should overturn the CRTC decision and not allow the current satellite radio options while 69% of Quebecers support the CRTC ruling.
"With satellite radio, Quebecers will get the opportunity to listen to French radio wherever they are in North America," added Shea.
Awareness of satellite radio appears to be increasing among Canadians. While a survey last fall reported that 44% of Canadians were aware of the service, this survey finds 63% indicating some level of awareness and 36% say they have a reasonably high level of awareness of the service.
More than 71% of Canadians surveyed responded positively to the fact that Canadian artists will now be featured on satellite radio throughout Canada and the U.S. to more than 6.2 million current subscribers.
Additionally, 69% of Quebecers agree (31% strongly agree) that having four commercial-free 100% French radio stations broadcast throughout North America will provide Quebec artists with great exposure.
In fact, Quebec respondents are more interested in the prospect of having Quebec artists heard all over North America than they are about the prospect of American English channels threatening Quebec culture (27% strongly agree.)
"At a time when Quebec artists such as Gregory Charles or Jonas are beginning to receive worldwide attention, but still finding current radio formats somewhat restrictive, satellite radio will open the door to a huge North American listening audience," said Shea.
In terms of market potential, 22% of Canadians said that they would be interested in subscribing to a satellite radio service with 21% interest in Quebec. But by far the strongest interest comes from younger Canadians, with one third of Canadians under the age of 35 interested in becoming subscribers to satellite radio.
The study also looked at the current "grey market", that is existing subscribers and potential of Canadian subscribers to a U.S. offering. While only 2% of respondents currently were subscribers, more than 9% knew someone who already has a subscription. Furthermore, 12% of Canadians say they would be interested in subscribing to the service in the U.S. if satellite radio was not licensed in Canada.
"We believe that there are currently over 100,000 Canadians already subscribing to satellite radio in the U.S.," said Shea. "If 12% of Canadians would be interested in joining the grey market through the U.S., that’s close to three million Canadians."
The national study, conducted by Veraxis Research and Communications in August of this year, consisted of a sample of 1,200 Canadians, including 500 in Quebec.
