CRTC releases details of plans for three different subscription radio services

CHUM Ltd. has pledged an overwhelmingly high amount of Canadian content for its proposed subscription satellite radio service compared to that offered up by two U.S. applicants with Canadian partners. Is there room for three subscription radio operators in Canada? Probably not, so the regulator will be left to sift through a mountain of paperwork in an attempt to determine which one, or perhaps two, of the applicants deserve the green light, and the amount of Canadian content proposed for each of the services will likely be a factor. The U.S.-backed applicants emphasize that limited satellite capacity on existing U.S. satellites that have a Canadian footprint constrains the amount of Canadian content that they will be able to provide, but stress to the CRTC that licensing them would provide a needed legal alternative to the grey and black markets, and give Canadian musical artists exposure down south. CHUM is applying for a licence for a national subscription radio service that would be delivered by terrestrial transmitters via fixed-service satellite called CHUM Subscription Radio Canada (CSRC). Sirius Satellite Radio Inc., Standard Radio Inc., and the Canadian Broadcasting Corp. are looking to launch the Canadian Satellite Service (CSS), while a partnership between XM Satellite Radio and former NBA Toronto Raptors owner John Bitove is proposing a service called Canadian Satellite Radio (CSR) (CCR, Feb. 27/04). CHUM has access to $250 million to back its proposed subscription radio service. It anticipates the cost of building SCRC and operating it in the first two years at about $26.5 million. Its goal is to launch by Sept. 1, 2005. CSRC would consist initially of 50 channels, and increase in the fourth year to 100 commercial free digital channels. CHUM anticipates reaching 60% of the Canadian population, or 20 million people, in about 30 markets using terrestrial transmission. CHUM proposes maintaining a Canadian content level equivalent to that of conventional radio. Another benefit of CSRC, according to CHUM, is a faster rollout of digital audio broadcast (DAB). "DAB has been touted as the future of radio for many years, but take-up has been slow, because receivers have not generally been available in Canada and DAB has not offered Canadians new content," CHUM writes in its application. "CSRC will resolve these problems, as all receivers will be able to receive over-the-air digital radio, in addition to the subscription service." CHUM plans to program many of the audio channels, including some that will build on its youth-branded TV channels such as MuchMusic, MuchVibe and MuchLoud. About 10% of CSRC’s channels will be devoted to French-language programming, and another 10% to ethnic or Aboriginal channels. The broadcaster notes in its application that it has had exploratory discussions with a number of broadcasters. CHUM proposes charging an average rate of $8 per subscriber per month in the first three years, increasing the amount to $8.25 in years four and five, and to $8.50 in years six and seven. There is also a proposed $20 activation fee. CHUM tells the CRTC that there is room in the market for CSRC, which will target urban listeners in the 12-24 demographic, and one of the two other applicants. The proposed U.S.-backed audio services would duplicate the U.S. versions of their subscription radio services, but add four Canadian channels each for distribution across North America. The Sirius-CBC-Standard Radio consortium plans to deliver a 100-channel subscription radio service, including initially at least four entirely programmed and developed by the CBC/Radio-Canada. As well, an additional four channels will be provided by Standard Radio when subscriber levels reach 300,000, which is anticipated to happen in 2008. The service would be priced at $12.95 per month, with start-up and operational costs being funded equally by the three partners to a tune of a total of $20.3 million. It would be distributed using the Sirius Radio system already in operation in the United States. It consists of a three-satellite constellation, which has elliptical geosynchronous orbits with apogees over Northern Canada. "…If Canadians are to have the opportunity to receive satellite radio, non-Canadian satellites must be used," it writes in its application to the CRTC. "The Sirius satellites have finite capacity, most of which has already been dedicated to the existing satellite radio service offered by Sirius in the United States." CSS’s rival CSR initially proposed adding two Canadian channels to its subscription radio lineup but later augmented its commitment to four. It suggests a Northern Lights channel, Lumieres Nordiques channel, and in conjunction with CTV Inc.’s Comedy Network, the Laugh Canada audio channel, and a French spoken word channel, À propos. CSR also proposes providing an emergency channel to municipal, provincial and federal authorities in the event of a national, regional or local emergency. Licensing CSR would help curb a growing satellite radio grey market in Canada by offering a legal choice, states the licence application by XM and Bitove. "Should CSR be licensed, extensive investments in the Canadian economy and the Canadian music industry would be made. Specifically, CSR projects that it would create an additional $500 million of positive economic impact to Canada over the seven-year licence term," notes the application. The 101-channel service would cost $12.99 a month. Following the current written process, in which comments on the subscription radio licence applications are due on September 15, the CRTC will hold a public hearing on November 1 on the matter.

CRTC releases details of plans for three different subscription radio services

Broadcast | July 30, 2004

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