CCR Update

Slow digital cable growth, basic customer losses hit Shaw in Q3 . . .Shaw Communications Inc. experienced a sharp decline in digital cable growth and lost several thousand basic cable customers in its 2002 fiscal third quarter ended May 31, according to company financial and subscriber results released June 25. Shaw added just 5,976 net digital cable set-top boxes in its third quarter, compared to 43,925 net additions in the previous quarter and 107,671 in the third quarter of 2001. Shaw attributed the slower growth to the elimination of promotional offers such as one-month free digital cable service and free installation, and reduced retailer incentives. The cable operator lost 19,000 basic cable customers in Q3 2002 due to "seasonality", increased competition, and cable tier and bundled package price increases implemented on May 1. Shaw has applied to the CRTC for basic cable rate deregulation. Other Q3 highlights: Internet subscribers grew by 26,000; consolidated revenues increased by 4.5 per cent; after-tax net loss of $42 million in the quarter related to the net effect of a $269-million write-down of its investment in competitive telecom provider GT Group Telecom. . . . Star Choice subscriber growth also slowsStar Choice Communications Inc., Shaw's direct-to-home (DTH) satellite TV unit, also saw subscriber growth slow in the third quarter, which Shaw attributed to the typical seasonal decline experienced by DTH and cablecos. The company added 28,973 net DTH subscribers in its third quarter ended May 31, compared to 51,929 net additions in the previous quarter and 33,607 in the third quarter of 2001. The increased number of subscribers purchasing additional satellite receivers at a subsidized cost drove up the cost of acquiring subscribers. As a result, Star Choice reduced the programming credit associated with the additional receiver by $50, resulting in about 40 per cent of customers taking a second box in Q3 compared to 60 per cent in the previous quarter. More details. Shaw sells Caribbean satellite operations In releasing its third-quarter financial results on June 25, Shaw Communications Inc. disclosed that it sold effective May 31 its uplink and satellite relay distribution undertaking (SRDU) business in the Caribbean for about $1 million. The business had annual sales and operating income before amortization of about US$2 million and US$300,000, respectively. More details. Shaw to launch video-on-demand serviceShaw Cablesystems will deploy video-on-demand in Calgary beginning September 4. The service will be available only to customers who take both Shaw’s Internet and digital cable services. The VOD service will enable customers to select programming from a library of titles through an online ordering system and view the programming on their television. Shaw notes that it will roll out VOD to virtually all of its digital and Internet customers in Western Canada over the next six to eight months. In February, Rogers announced that it was rolling out VOD in Toronto, initially to employees and key digital cable customers in June. By the year 2003, Rogers said its VOD service would be available to 90 per cent of its Ontario customers (CCR, March 1/02). For more details on Shaw’s VOD plans, see the upcoming issue of CCR. More details. Canadian Heritage upholds Rogers’ second ethnic TV licence in TorontoCanadian Heritage minister Sheila Copps announced June 25 that the government was upholding the CRTC’s decision to grant a second over-the-air licence to Rogers Broadcasting Ltd. for a multilingual ethnic television station. Earlier, the government confirmed that Craig Broadcast Systems Inc. could keep its licence for a conventional Toronto station that was awarded at the same time as Rogers’ licence (CCR, June 7, 2002). More details. Alliance Atlantis to cut production again, diginets costlyAlliance Atlantis Communications Inc.’s seven new digital specialty channels and two emerging analog channels, Series + and Historia, incurred $17 million in operating losses in the fiscal year ended May 31, 2002 compared to $5.4 million the previous year. But the company noted in its financial report to shareholders that performance of its developing channels is "within expectations." Alliance Atlantis also said that its broadcast strategy continues to be the "cornerstone" of its long-term investment and growth plan. Advertising in the broadcast group was up 37 per cent in the fourth quarter over the same period last year and 27 per cent over the previous fiscal year, the company stated.Despite announcing a $47.3-million profit for all the company’s divisions for the year, Alliance Atlantis said it would cut its drama productions to save $200 million annually. It plans to increase documentary production, which is cheaper to create than prime-time drama. More details. Vidéotron gets injunction to limit protests at its Quebec City facilitiesVidéotron ltée, the cable giant owned by Quebecor Inc., received a court injunction June 25 to limit the number of protests held near its facilities in Quebec City. The Superior Court of Quebec has ordered the Canadian Union of Public Employees, which is in a bitter labour dispute with Vidéotron, to limit the number of pickets around the Vidéotron office at 2200 Jean-Perrin to seven. Striking Vidéotron workers must also allow people unrestricted access to the office. More details. Private radio making a comeback: StatsCanFM radio is enabling private radio to make a comeback after difficult years in the late 1980s and most of the 1990s, according to a Statistics Canada report. "The profit margin of FM stations (before interest and taxes) has surpassed 25 per cent for the past three years, while AM stations have incurred losses, the latest amounting to 3 per cent of revenues in 2001. However, the magnitude of AM losses has declined in the last two years," StatsCan reported on June 25. The report concludes that radio broadcasters have outperformed television broadcasters for three straight years in terms of revenue growth and profitability. More details. Jobs hard to come by for culture graduatesGraduates from post-secondary programs in culture in 1995 had more problems finding work related to their studies than graduates in other fields, according to Statistics Canada. By 1997, two years after graduation, only a third of employed culture graduates reported that their job was closely tied to their education, compared to half of other graduates. "Two years after graduation, 13 per cent of university culture graduates worked in a culture occupation, while 15 per cent worked in a culture industry. In comparison, college culture graduates fared somewhat better: 27 per cent were working in a culture occupation, and 30 per cent in a culture industry," StatsCan reports. More details: http://www.statcan.ca/Daily/English/020619/b020619a.htm http://www.statcan.ca/english/IPS/Data/87-004-XIE.htm http://www.statcan.ca/english/IPS/Data/87-004-XPB.htm Lill wants media ownership documents from Canadian Heritage NDP MP Wendy Lill has moved that Canadian Heritage be made to produce copies of "all documentation, including reports, minutes of meetings, notes, email, memos and correspondence since 1997, within the department of Canadian Heritage pertaining to the increasing concentration of corporate ownership in the Canadian media." The motion comes as Senators and the general public are demanding a hearing into corporate concentration and its effect on the diversity of news sources in the country. Clifford Lincoln, the chair of the Standing Committee on Canadian Heritage that is studying broadcasting in Canada, has been quoted as saying that his committee will focus on media concentration when it reconvenes following the summer recess. Lill is a member of that committee. The Senate is expected to wait on a report with recommendations by Lincoln’s committee before it proceeds with its own investigation of media concentration. Quebec singer Mia sues TQS over use of nude photosMia, a Quebec up-and-coming pop singer, has filed a lawsuit against the television network TQS Inc. and television producer Zone3 Inc. over the unauthorized use of nude pictures taken from her web site. Zone3 produces the news show Flash for TQS. The suit stems from a broadcast of Flash in February of an interview by the show’s reporters (also named in the suit) that used pictures downloaded from her site despite clear text forbidding unauthorized use. M.G. Entertainment Inc., which holds the rights to the photographs, is also filing for damages. The singer has retained Quebec lawyer Michel Savonitto to pursue the case. For more details, see the June 26/02 issue of CCR affiliate publication Canadian NEW MEDIA. More details. Ontario court orders Rogers to reveal Internet subscriber detailsAn Ontario court has ordered Rogers Cable Inc. to reveal information about an Internet customer who sent an email claiming to be a blood donor who is a sexually active gay man, the Ottawa Citizen reports. INTERNATIONAL NEWS DirecTV charges four men, including Canadian, with piracyDirecTV Inc. has indicted four men for illegally distributing DirecTV access cards. Among those arrested was Canadian Bill Rath. He could be extradited to the United States. Rath has been charged with heading an operation aimed at distributing the signal-theft devices across the United States and Canada. More details. Lions Gate’s ‘The Dead Zone’ scores high on cableThe Sunday premiere of Vancouver-based Lions Gate Television’s dramatic series The Dead Zone rated the highest for its genre in basic cable television history, the company announced June 19. It had a 4.7 household rating and 6.4 million viewers in its debut. Based on a Stephen King novel, the show more than doubled USA Network’s usual Sunday evening performance in that time slot. More details. TV syndicated ads sales up sharply in U.S.TV syndicated ad sales rose 18 per cent to about US$2 billion from last year’s US$1.7 billion. While syndicated ad sales are up, they have yet to reach the US$2.4-billion level recorded two years ago. More details. U.S. media ownership decision delayedA federal judge has ruled that it will decide later on whether the Federal Communications Commission will have to review every two years its rules on media ownership, according to Multichannel News. The FCC appealed a February 19 ruling by the Federal Appeals Court that appeared to have requested just that of the U.S. regulator. More details.

CCR Update

Broadcast | June 26, 2002

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