Shaw to lead in digital, over-the-air signals as conventional TV’s future questioned

Shaw Communications Inc. is positioning itself as a leader in digital, over-the-air television as other broadcasters question the future of conventional TV broadcasting, experts said. In applications filed with the CRTC this year, including some this month, Shaw proposed to convert 13 analog transmitters, which carry its Global TV signal into small towns, to digital. The applications represent Shaw’s second round of small-town digital conversions, following the conversion of 14 transmitters over the past year, and would give the broadcaster the only digital signals available via antennas in places like Minnedosa, Man., Wolfville, N.S., and Red Deer, Alta. “Maybe DTV has a chance in Canada because of this,” Steven James May, a digital broadcasting expert and PhD candidate at Ryerson University and York University, said in an interview. “It’s pretty bold. Who would have thought that Shaw would have been a leader in national digital broadcasting?” Shaw’s digital conversion stems from a 2010 CRTC decision that required the company to upgrade Global’s analog transmitters to digital as a condition of its acquisition of Canwest Global Communications Inc. That decision required Shaw to spend $4.6 million a year over five years to convert 67 Global analog transmitters to digital in small communities that weren’t part of the commission’s 2011 mandatory digital conversion in larger markets. The decision could result in Global becoming the only local, over-the-air station in many parts of the country as other broadcasters shut down their analog transmitters in smaller markets or decide not spend the money to replace them with digital infrastructure. CBC/Radio-Canada shut down 607 analog transmitters last July to help deal with an annual budget reduction of $115 million starting in 2014-2015. In new data released last week, the CRTC said private conventional television stations' national advertising revenues fell to 2009 levels in the 2012 broadcast year, dropping 7.9 per cent and causing profits to sink. BCE Inc., which operates the CTV over-the-air network, said during a March 2012 CRTC hearing that 16 of the company’s local TV stations would not have been profitable in 2011 without funding from the regulator's Local Programming Improvement Fund, which is now being phased out. The company reiterated its concerns about the viability of conventional TV following the Supreme Court’s decision in December that denied the CRTC’s proposed value-for-signal regime, leading industry analysts to speculate that Bell may shut down its seven CTV Two stations. As part of BCE's proposal to acquire Astral Media Inc. for $3.38 billion, Bell told the commission in May it would keep all of its over-the-air TV stations open with current levels of funding. May said that, if Global's signal becomes the only over-the-air telelvision option for viewers in some places, it could help Shaw claim more advertising revenues by reaching viewers other broadcasters can’t. (Viewers who don't have access to a local, over-the-air signal via antenna have access to local channels through cable or satellite TV subscriptions.) “I think Canadians will take what they can get at this point,” he said of the diminishing over-the-air options. “At least maybe there will be Global, if nothing else. Something is better than nothing.” Michael Vormittag, an information technology specialist at TD Securities who is also an expert in over-the-air TV, said in a telephone interview that Shaw’s transmitter upgrades provide “hope” to Canadians in small towns that they can continue to receive over-the-air signals for many years to come. He said Shaw could use more efficient digital broadcasting technology to carry other broadcasters’ signals, providing more over-the-air options to small-town viewers. “If anything, maybe Global becomes the backbone as we move on,” he said. “It’s a good news story for people who are antenna users in those markets.” Vormitagg said Shaw has appeared to be “truly committed” to digital, over-the-air television since it took over Global’s operations. The company has made efforts to secure more “viewer-friendly” frequencies in Ottawa and London, Ont., after Industry Canada originally assigned “bad frequencies” to Global in those areas, he said. “I think this is a good sign that they’re taking the project seriously, “ he said. In a digital transmitter conversion progress report submitted to the CRTC last September, Shaw said the 14 transmitters it converted over the past year serve about 39 per cent of all viewers that reside outside of the 22 major markets included in the national mandatory transition to digital in 2011. “In both the mandatory and non-mandatory markets, the Global signal will then be available to an estimated 89% of viewers across the country,” the company wrote. Shaw’s digital upgrades last year included transmitters in Vernon, Penticton and Kelowna, B.C., as well as Owen Sound, Sarnia-Oil Springs, Timmins, Sault Ste. Marie, North Bay, Sudbury, Peterborough and Midland, Ont. Its applications this year would cover transmitters in Wolfville, Minnedosa and Red Deer, as well as Truro, Yarmouth, Sydney, Shelburne, Bridgewater and New Glasgow, N.S.; and Chilliwack, Courtenay, Prince George and Kamloops, B.C. The company has not yet prposed to upgrade 40 other transmitters, including two in Nova Scotia, three in New Brunswick, two in Ontario, one in Saskatchewan, seven in Alberta, and 25 in British Columbia. May said he would like to see Shaw make its new digital transmitters capable of transmitting over-the-air signals that could be picked up by mobile devices, such as cellphones and tablets. He noted that mobile over-the-air TV is gaining in popularity in other countries though it has not been launched in Canada. He said a mobile signal could appeal to advertisers if it was the only free, over-the-air signal available to consumers, and because it would allow them to more readily target local viewers. “Since Shaw is taking the lead on digital broadcasting in Canada, they may as well take the lead in mobile television as well,” he said. “I think there is money to be made there.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Simon Doyle at sdoyle@thewirereport.ca

Shaw to lead in digital, over-the-air signals as conventional TV’s future questioned

Broadcast | June 20, 2013

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