Source : Ottawa Citizen

But they've also fragmented the TV audience

by Tony Atherton

Ten years ago, the CRTC and the cable industry figured out a way to make specialty channels a sure-fire success in Canada. All they had to do was force Canadians to pay for them.

That was the substance of a series of decisions which, over the course of the ensuing decade, changed the way we watch TV and redesigned the structure of Canadian broadcasting.

The CRTC's force-feeding policy was behind the remarkably successful launch of YTV, Vision TV, and The Weather Network ten years ago this week, and Newsworld the following spring. It was what brought TSN and MuchMusic into most Canadian homes by the fall of 1989, and introduced U.S. services, A&E, CNN, TNN and TLC as part of the first 'extended basic' package on major cable systems in 1992.

As pricey stand-alone specialty channels before 1988, TSN and MuchMusic had lived a hand to mouth existence; available to a tiny minority of Canadian viewers, they barely made a dent in weekly ratings.

The CRTC's decision to allow cable companies to fold some specialty channels into basic-cable packages, and the commission's willingness to look the other way when cable linked old and new services, or used negative-option marketing strategies to sell "optional" cable packages, meant new life for existing specialty channels.

It also meant guaranteed success for any channel that managed to get a licence before the 1995 consumer backlash sent the cable industry into fits of contrition over its most successful marketing practices.

By then, however, we had become hooked on the specialty channel experience. So when a huge but entirely optional package was introduced last fall, it was still picked up by almost half of the subscribers to which it was offered.

As a result, Canada now has more TV viewing options and more homegrown specialty channels than any country in the world other than the U.S.

In many ways, the specialty channel revolution has met the policy goals that the CRTC set 10 years ago. The expansion of specialty channels has inspired an unprecedented boom in low-budget, information-oriented Canadian programming, and a corresponding surge in the viewership of Canadian content.

By this spring, tuning to specialty channels accounted for about 30 per cent of all TV viewing, and more than two-thirds of that figure was for Canadian specialty channels.

Research shows that Canadian programming accounts for about 64 per cent of the viewership for English-language Canadian specialty channels.

The figure is even higher in primetime. That is a reversal of the usual experience of English language TV in Canada, where about 75 per cent of the viewing has traditionally been foreign programming.

But the specialty channel boom has come at a cost. It caused cable prices to soar (the most popular cable package in 1988 cost about $13 and included about 15 channels; now it has 50 channels and costs more than $30 a month), it fragmented the national audience, and it made it harder for broadcast networks to assemble the kind of mass viewership need to justify expensive Canadian drama and entertainment series.

"TV is now like a newsstand," says Carleton University communications professor Paul Attallah. "Its more like going to a store and finding a bunch of magazines or a bunch of newspapers. You say, 'I want this on, this one and this one. and I'm not interested in this other.'"

"We've gone from a (broadcast) system in which it was possible to have kind of a national conversation, to one in which that is really just not on the agenda."

The whole concept of appointment television, the idea of TV programming as a must-see weekly ritual, has been watered down by the flood of viewing options, says Attallah, Ironically, specialty TV has made TV less special.

"All the specialty channels all seem to get two per cent of the audience all the time, day or night, winter or summer," says Attallah. "There's this big river of TV; people dip into it, watch a bit of this, a bit of that and like the song says, 57 channels and nothing to watch. That's because because it's not appointment TV anymore, it's not special. (Specialty TV) has kind of flattened out the fun."

Before 1988, there was little to suggest that specialty television was poised to changed the landscape of Canadian broadcasting.

True, niche programming services such as ESPN, Nickelodeon and MTV were making waves in the U.S., but it was assumed that Canada's population, barely big enough to support free, over-the-air, mass-appeal networks, couldn't find enough willing subscribers to underwrite narrow-market channels.

Certainly the Canadian public had not been kind to the seven pay-TV services licence in 1982. Some, like the arts-oriented C-Channel, folded before the CRTC restructured pay-TV as a series of regional monopolies. First Choice (now TMN) became the pay-movie channel for eastern Canada, while Superchannel, an amalgam of smaller services, was given exclusive domain in the west.

The arrangement allowed the services to hang on, but not exactly prosper.

In the mid-80s, the CRTC licensed the first true Canadian specialty channels: MuchMusic and TSN, the short-lived Life Channel, and two ethnic-language services, Telelatino and Chinavision (now Fairchild Colorvision). The Citytv-affiliated MuchMusic, which cost less than a dollar month as a stand-alone service, soon became the most popular specialty, but even it had fewer than 200,000 subscribers.

"Some of the conventional broadcasters thought we were foolish putting all these resources and all this attention in the little tiny world of specialty television, which was really very small audiences, very small revenues, and not significant compared to the so-called foundation broadcasters," says CHUM/CityTV vice-president Jay Switzer.

The CRTC encouraged various kinds of packaging to improve sales, allowing cable companies to mix approved U.S. specialty channels with the struggling Canadian cable networks. But since the approved list of imports didn't include the most popular U.S. networks, such as HBO and ESPN, the marketing schemes had limited affect.

By 1986, CRTC commissioners began to worry that if Canada didn't cultivate its own successful specialty channels, the rising popularity of such services in the U.S. would eventually force the commission to ease restrictions. So when it called for new specialty channel applications in 1993, it announced that it was willing to consider the possibility of including the new channels as part of basic cable.

The proposed change was styled as another form of packaging, but it had the distinct whiff of coercion. If accepted, cable subscribers who wanted to keep watching the major U.S. network affiliates, which were the chief attraction of cable in the '80s, would have to pay for certain Canadian specialty channels, too.

Even with this possibility on the table there were relatively few applications for specialty services, and almost none from conventional broadcasters (CBC's Newsworld application was a singular exception). Broadcasters, in general, criticized the concept of specialty services, saying that the new channels would steal away advertising revenue.

Instead, the licence seekers were a mixed bag of entrepreneurs -- cable companies, private consortiums, an engineering firm (The Weather Network), and an idealistic collection of ecumenical-minded spiritual leaders and social justice workers (Vision TV).

"The conventional wisdom on Bay Street was that if you don't have an over-the-air VHF transmitter with a million watts, if you don't have cable simulcasting (of popular U.S. series), if you don't have unrestricted access to buy whatever you want, (television) is a fool's game," says Switzer.

But the launch of the new basic-cable services proved almost shockingly successful. The Weather Network was earning such obscene profits the CRTC forced it to reduce its subscription fee. YTV, which launched with wall-to-wall reruns of Bonanza and You Can't Do That on Television, was soon able to underwrite original series like The Black Stallion or its current homegrown hit, The Adventures of Shirley Holmes.

As a result of this initial success, and given the largely muted subscriber backlash, applications from broadcasters predominated in the next two rounds of specialty-channel licence hearings. Formerly wary networks such as CTV and Global decided it made more sense to spin off their own specialty channels, rather than give up the field to others.

It was just as well, because as cable began to repudiate the controversial marketing practices that had guaranteed subscribers to channels in 1988, organizations with deep pockets, such as established broadcasters, were needed to make sure the new channels were viable even if they weren't instantly adopted by the majority of Canadians.

Though conventional broadcasters are now a major player in specialty TV, they've lost their once exclusive position as TV's gatekeepers, says Jane Logan, president of the Specialty and Premium Television Association. Now production companies such as Alliance and Atlantis have their own distribution network through specialty channels, and other media, such as newspapers and magazines, are finding opportunities in TV.

"The composition of the industry has changed dramatically. Specialty services provided a platform for new players to enter the broadcasting system in what initially was a small way and then grow to be important programming sources in the country," says Logan.

Ian Morrison of the lobby group Friends of Canadian Broadcasting, praises specialty channels for their commitment to Canadian content, but has some reservations about the effects of the specialty channel revolution.

"The specialties are very Canadian, much more so than conventional television. They are bringing Canadian images to Canadians."

"One the downside ... very few of the programs are big-budget programs. Specialties seem to be chasing cheap things -- second and third runs of dramatic programming, or cheaper documentaries and such. They're not making as big a contribution as they ought to be to the creation of expensive Canadian content, higher quality Canadian content."

Specialty TV's concentration on low-budget fare is not all bad, says Linda Schuyler, chairwoman of the Canadian Film and Television Producers Association.

"What it has provided is a real opportunity for young, beginning producers to get a start."

In the mid-80s, when conventional networks were encouraged by a new federal TV-programming fund to commission more work from independent producers, there was no established production industry in Canada. Broadcasters turned to largely untried production companies who have since become such industry leaders as Atlantis, Alliance, and Sullivan Films.

Conventional broadcasters no longer have to take a chance on neophyte producers, but specialty channels, with smaller budgets and a need to be noticed, are more interested in innovation and spunk than extensive track records. Specialty channels have given a leg up to such local productions as The Tom Green Show and Y B Normal? and such production companies as Sound Venture (Bravo's Footnotes, Life's Homes By Design) and Almadon Productions (Discovery's Lifespace).

Attallah agrees that this development aspect of specialty channels is one of its key contributions to the industry. It encourages people to be involved in the new information-based economy.

"Consumers pay more for TV, but there are a lot more people working in the TV industry, and that's a good thing. It creates employment, but it also trains people in how do you make TV which is internationally saleable."

The Decade of the Specialty Channel – 1988 to 1998 <?XML:NAMESPACE PREFIX = O />

Number of Canadian specialty channels: (French and English): 5 (1988) 35 (1998).