Jay Switzer returns with ‘shrewd proposal’ for gender-specific specialty channels

Although industry observers are calling Jay Switzer’s application for gender-specific specialty channels a “shrewd proposal,” they don’t expect his broadcasting pedigree to give him an upper hand in the search for a distributor. Switzer, former CEO and president of Chum Ltd., has resurfaced in the broadcasting fold with a CRTC application to licence four English-language specialty television channels. Switzer made the applications last month on behalf of a new corporation he plans to launch, which is yet to be incorporated. Switzer, the son of Canadian cable pioneer Israel "Sruki" Switzer, started at Chum in 1982, where he rose through the ranks to become president and CEO. The CRTC approved CTV Globemedia’s acquisition of his company in 2007, Chum officially ceased operations June 22 that year. The CRTC will consider the applications at a hearing April 24. The applications propose two channels aimed at men, called Adventure and Velocity, and two aimed at women, called The Love Channel and Kiss. The channels geared to men would consist of “contemporary action and adventure films and series, mini-series, made-for-television movies, classic films, and occasional magazine-style shows focusing on this genre and its stars.” The Velocity application says the channel woud “consist of theatrical movies and series, mini-series, made-for-television movies and classic films primarily driven by a fast-paced fictional plot featuring car chases, explosions, special effects, or martial arts. The service would also feature occasional magazine-style shows focusing on this genre and its stars.” The applications for channels aimed at women propose similar content. “I can’t see the CRTC approving two stations with essentially identical mandates but just different names,” Duncan Stewart, director of technology, media and telecommunications research at advisory firm Deloitte Canada, told The Wire Report. Stewart said he expects the CRTC to approve one channel from each of the two gender genres. John Doyle, television critic with The Globe and Mail, agreed. “My suspicion is that, depending on how the CRTC assesses the situation in Canada, they may approve a licence for each one,” he said in an interview. Even if the channels are approved, licensees often fight an uphill battle to get their properties carried by cable and satellite distributors. According to the 2008 Regulatory Guide to Canadian Television, published by the McCarthy Tétrault law firm, about 370 Category 2 services were authorized for operation as of April 1, 2008. Of those, only about 90 were available on cable or direct-to-home satellite packages. One industry source wagered that Switzer’s experience and stature in the industry would give him only a marginally better chance at securing carriage for an approved licence. Sheridan Scott, a partner in Bennett Jones LLP and former commissioner of the Competition Bureau, told The Wire Report that Switzer’s name and reputation alone won’t be enough to secure carriage. “It’s still cable companies selling to consumers, and they don’t know Switzer,” Scott said. The competitive climate for new specialty channels has become much more challenging in recent years, Stewart added. “In the early days of broadcast or specialty television, when there were three, or 10, or 50 different channels, each additional one had some impact,” Stewart said. “The ability of any additional English-language specialty television channel to significantly move this, in terms of the competitive environment, is pretty low.” Doyle said the CRTC is moving toward unbundling cable packages, so that consumers can choose channels individually. Such a situation would create a more competitive environment for specialty channels, in which subscribers would evaluate them on their merits. “The ones that survive will be those that market themselves relentlessly to viewers and convince them to buy their channel specifically,” Doyle said. Regarding Switzer’s applications, he added: “It looks on paper to certainly be a shrewd proposal.” Specialty television channels have typically received higher returns than basic channels because of their reliance on advertising and subscription fees. “Having both an advertising revenue stream plus a subscription revenue stream is an awful lot better when you walk through the economic cycle,” Stewart said. In a recent editorial for The Mark, Switzer said traditional cable television, faced with competition from Internet broadcasting and streaming, continues to have a positive future in Canada. “Though I promise to keep an open mind, economics suggest the heritage cable systems currently delivering information and entertainment to Canadian homes have a long future, even if national public policy suggests otherwise,” he wrote. Stewart agreed that competition from online streaming is not about to displace traditional television. “Most Canadians just want to watch TV, and by far the most economically compelling way to that is over our existing, very-high penetration … and relatively low cost cable system,” he said. jmigneault@thewirereport.ca ---- CORRECTION: A previous version of this article stated that the CRTC approved about 390 applications for Category 2 specialty channels in 2008. Rather, about 370 Category 2 services were authorized for operation as of April 1, 2008.

Jay Switzer returns with ‘shrewd proposal’ for gender-specific specialty channels

Broadcast | March 8, 2010

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