CANADA’S CABLE AND SATELLITE companies want one thing when it comes to high definition television: More.
More HD channels. More HD content. More HD Canadian content. In the larger markets at least, HDTV set owners are increasingly tuning to their HD channels only, taking advantage of their big, bright, new toy. They, in turn, are beginning to apply some pressure on their cable company or satellite provider to make more channels available.
“Demand is high,” says the Canadian Cable Systems Alliance’s legal counsel Chris Edwards. “Everyone is looking to get as much high def as they can get.” The CCSA represents over 90 member cable companies, an impressive number of whom now carry HD.
In rural settings, the push isn’t quite as hard, however.
“It hasn’t really taken off,” Tim Stinson, general manager of Bluewater TV Cable (7,000 subs) told cartt.ca. Offering eight HD channels in its territories in and around Goderich, ON, Bluewater has just under 40 HD customers.
After customers shell out for an HD set, they stumble across another expense, the HD set top box. “The biggest problem for the customer now is the actual box,” says Stinson. “Motorola’s box is so darn expensive, we have to subsidize through our ears to make it work.”
Bluewater pays $820 for each HDPVR box from Motorola, “and that’s tough to pass along to a customer,” he added. When Bluewater launched HD over a year ago, it had a $6.95 charge on the channels it offered but soon eliminated that fee.
Dean MacDonald, president and CEO of Persona Communications backed Stinson’s view of the HD market. In Persona’s many rural markets, where the nearest Future Shop is a long drive away, HD is not top of mind among customers. However, in Persona’s largest market, Sudbury, where it has an interconnect arrangement with Rogers, customers are plenty interested in high definition.
So far, neither operator is able to pull in any HD content over the air – a common problem among most smaller cable operators in Canada since Canadian broadcasters have launched digital broadcasting in only the largest markets.
However, says MacDonald, most Canadians get their TV from satellite or cable anyway, so the fact the broadcasters covering Timmins, for example, are years away from installing a digital transmitter – or may never – is unimportant. “Given the proliferation of cable and satellite, over-the-air HD is almost a moot issue,” he said.
Also holding back distant cable operators from adding more high def channels is their reliance in many cases on Cancom. Many small operators went with what’s known as a HITS QT system when they upgraded their headends to digital, making them almost totally reliant on what Shaw Communications-owned Cancom delivers. Those operators which spent the $250,000-plus on a full HITS system are able to take advantage of Bell ExpressVu’s SRDU package, however.
“Cancom’s nine-pack (of HD channels) is good enough for now,” said Cable Cable’s general manager Mike Fiorini. “But we’ll need more than what Cancom offers and we’re working on it.” Cable Cable (4,000 subs), in Fenelon Falls, ON, could interconnect with Cogeco or Rogers, and the company is exploring that. “We need to be less reliant on Cancom,” he added.
Calls to Shaw Communications for comments on their HD strategies with Shaw Digital Cable, Star Choice and Cancom, were not returned.
Hmm… 13 paragraphs into an HD story about distributors and we haven’t discussed the Rogers or ExpressVu strategies yet. Well, they’re both the same: Carry any and all HD they can get their hands on – and then claim superiority. The companies each put out releases last week touting their high def content and to tell the truth, they’re pretty close. They are clearly the HD leaders.
An HD customer at this point couldn’t really go wrong picking either one for service. “To me (HD) now is a lot like when Ted (Rogers) launched FM radio, where in the early days just a small percentage of the base has it, but very quickly you find out it’s the right percentage, or the right part of the base that has it,” says Dave Purdy, vice-president and general manager, television, for Rogers Cable, pointing to the attractive demographic with HD sets. When Ted Rogers bought CHFI FM in the 1960s, very few had an FM radio, but when people heard the new, better sound, they were quick converts.
Pat Button, the former Samsung executive who is now vice-president sales and marketing at Bell ExpressVu said that on Grey Cup Sunday, there were actually nine football games available to its customers in high definition, including the NFL games and Sunday Ticket matchups.
“We don’t count that as nine channels of HD, but if we changed to the way Rogers is counting, we would be above 40 that day,” Button said, needling his competitor.
Besides the big Christmas push on now, Button believes that springtime, otherwise known as NHL playoff time, will spawn further fast growth in HD numbers. TSN has already said it will carry playoff games in HD and Button said he expects CBC to follow suit, carrying as many post-season matches as it can in high definition.
“Hockey will be the thing that really will drive the message,” says Button. “You’ll see customers in droves connecting boxes in the spring.”
The remaining gap that distributors are working hard to overcome is that of customer education. Throughout 2004 and 2005, many HD set buyers took their new TV home without any set top from either satellite or cable, meaning all they could watch on it are wide-screen DVDs, unless they had a proper antenna. In September 2005, said Button, research showed that while 17% of Canadian homes have an HD or HD-ready set, just 4% had the right digital decoder.
The education, therefore, is ongoing. With nearly all major sporting events and the majority of prime time programming in HD, “everything of relative importance is available in HD,” says Button. “And, if you paid that with an HD PVR, you’re pretty well positioned to watch HD all the time.”
While “100% more is being done today that 12 months ago,” on the consumer schooling front, said MacDonald, “it’s still way less than what needs to be done.”
However, in his own experience as of December 2005, MacDonald said you’d be hard-pressed to leave a major electronics retailer not knowing you needed a digital box of some kind in order to take best advantage of the HD set. “It’s just bad customer service to send someone home without that knowledge.”
What else will drive HD, says Stinson? Cancon. “If there was more Canadian content… CTV I understand has a lot of content on there, but lots of it is the American programming… I think people want to see more of this Mike Holmes guy (Holmes on Homes) in HD, for example, and I think that kind of stuff would be a real seller for us – original Canadian HD programming that’s actually popular.”
“We’re lobbying both the programmers themselves, the CAB and the CRTC for minimum thresholds of HD programming,” added Rogers’ Purdy, who doesn’t want to add duplicate channels with little new HD to show for it, since HD takes up a lot of bandwidth. “If it’s going to take up all that space, needs to have the content to justify it.”
Button agrees, since Bell’s satellite transponder space is very good for now, but could quickly be limited with additional rules, which “could be at a real challenge with limited capacity.”
Going forward, look for the new telco TV competitors in 2006 to add as much high definition as they can, Aliant, Sasktel, MTS and Telus have all said 2006 will see them add HD.
Finally, Rogers has said it will launch HD On Demand in the coming 12 months.
———–
The following is a list of what we found for sale to consumers on the HD side when talking officials of these companies, or by visiting each company’s web site to see how many channels they’re offering their HD customers. (If we’re missing your company, please let us know and we’ll add you to the list)
Access Communications (Regina): 11
Amtelecom (Aylmer): 6
Aurora Cable Internet (Aurora, ON): 21
Bell ExpressVu (national): 30 *
Bluewater TV Cable (Goderich, ON): 8
Cable Cable (Fenelon Falls, ON): 9
Cable TV Camrose (Camrose, AB): 9
Campbell River (B.C.) TV: 4
Cogeco Cable: 12 ***
Compton Communications (Port Perry): 8
Delta Cable (Delta, B.C.): 8
EastLink (Nova Scotia and PEI): 7
Mountain Cable (Hamilton): 18
Norcom Cable (Kenora, ON): 13
Persona: 15-plus ****
Rogers Cable: 30 *
Seaside Cable (Cape Breton Island): 6
Shaw: 9
Source Cable (Hamilton): 16
Star Choice (national): 6
Sun Country Cablevision (Salmon Arm, B.C.): 6
Videotron (Montreal): 16 **
Westman Communications (Brandon): 6
Wood Lake Cable (Wood Lake B.C. and area): 7
* Rogers and Bell ExpressVu both claim HDTV superiority at around 30 channels and each thinks the other counts their channels in a funny way, so we’re rounding it off at 30 HD channels and calling it a draw.
** Videotron’s HD offering is in English.
*** Cogeco offers 12 HD channels in its Ontario markets, three in its Quebec territories. All English.
**** Persona is interconnected with Rogers in Sudbury and Timmins but we were unable to determine from their web site how many HD channels they offer.
