Source : National Post

Regulator calls for proposals to examine viability of subscriber service in Canada

The federal broadcast regulator has signalled it will hold public hearings to decide whether Canadians will have access to subscriber satellite radio services, similar to those in the United States.

The Canadian Broadcast Corp. and food entrepreneur John Bitove have already teamed up with U.S. services and filed a proposal with the Canadian Radio-television and Telecommunications Commission to begin selling a modified service to Canadians.

The attractions of satellite radio services include enhanced sound and no commercials, or at least fewer advertisements than other stations that don't have monthly subscription revenue to help cover their costs. A monthly subscription buys access to hundreds of stations of various genres.

In the United States, satellite radio services follow two financial models: one with no advertising, and a cheaper version with a limited number of commercials.

Canadian commercial radio operators are quietly gearing up for a possible fight against the multi-channel subscription services because they believe the Canada-U.S. partnerships will propose far less onerous Canadian content requirements than they are required to broadcast. There is concern in the industry that the CRTC could approve a service that would pull listeners away from commercial radio stations to avoid losing the listeners entirely to black market technology capable of pulling in the U.S. service directly.

Some 750,000 Canadian households are believed to employ such technology to bring in U.S. satellite television services that offer more U.S. and foreign programs than Canadian counterparts.

In its call for applications yesterday, which are to be received by Feb. 16, the CRTC made it clear it has not made a decision on whether to give a nod to any subscription radio service.

"It should be noted that, in making this call, the commission has not reached any conclusion with respect to the viability of such a service, nor should it be construed that the commission will, by virtue of having called for the applications, authorize such service at this time," it said.

Letters of intent are to be filed with the commission by Jan. 16.

Mr. Bitove was unwilling to reveal the contents of his private application in a recent interview, but some industry insiders suggest less than 10% of the content on the proposed service would be Canadian.

Commercial radio stations are compelled to devote some 35% of their broadcast day to Canadian music and other content.

The CRTC said it expects applicants to demonstrate there is a demand and a market for a multi-channel subscription radio service in Canada, and that such a service would add to the diversity of the current system and reflect Canada's cultural diversity and linguistic duality.

Applicants must also look at the potential damage to the revenue model of existing radio stations, and present evidence of the financial viability of those behind their business plans.

© National Post