ARCHIVED -  Decision CRTC 94-281

Decision

Ottawa, 6 June 1994

Decision CRTC 94-281

CHUM Limited

Across Canada - 931531800

Bravo! - Approved

Following a Public Hearing held in the National Capital Region, beginning 14 February 1994, the Commission approves the application by CHUM Limited (CHUM) for a broadcasting licence to carry on a national English-language programming undertaking (Specialty Television Service).

This service will be available to cable television affiliates across the country, on a modified dual-status basis for Class I licensees, and on a dual-status basis for Class 2 licensees, as explained in Public Notice CRTC 1994-59 which introduces this and other decisions, and in accordance with the provisions set out in the distribution and linkage public notice also issued today (Public Notice CRTC 1994-60).

The Commission will issue a licence expiring 31 August 2000, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

Ownership

The new service, to be known as Bravo!, will operate as a division of CHUM, which owns 21 radio stations across Canada, and is the largest corporate group in the Canadian radio industry. CHUM, indirectly controlled by Allan Waters of Toronto, also owns and operates MuchMusic, Canada's original English-language music video specialty service, and is a co-owner (with Radiomutuel) of MusiquePlus, the French-language music video specialty service. In addition, CHUM owns six television stations in the Maritimes and Ontario, as well as ASN, a Maritime-based television network service distributed via satellite to cable undertakings.

Nature of Service

Programming plans for Bravo! specify a 24-hour service consisting of performance and drama programming, as well as documentary and discussion. Each day will consist of three 8-hour blocks, with some programming repeated during the day or week.

The licensee made a commitment, in view of its many broadcast interests, that no more than 10% of the programs on Bravo! will have been broadcast on, or simulcast with, any other television or specialty service of which CHUM is the licensee. The licensee shall adhere to this commitment by condition of licence.

Programming

The licensee describes Bravo! as being dedicated to entertaining, stimulating and enlightening Canadians. The Commission is convinced that Bravo! will add a significant measure of diversity to the programming choices available to Canadians, through its plans for a wide variety of programs having a general focus on the performing arts. Bravo! will offer a mix of dance, music, opera, documentary, cinema, visual art as well as discussion programs from Canada and abroad. The provision of a showcase for such programming will both promote Canadian performers and stimulate the independent production industry in Canada. In addition, Bravo! will provide an opportunity for audiences to enjoy a variety of performances, especially in smaller markets where fewer opportunities for such entertainment may be available.

The Commission notes the commitment made by the licensee at the hearing that, although Bravo! will broadcast some short-form video performances, it is not intended to become a music video service, and that no more than 15% of the program schedule will consist of material from Category 8(b) - Video Clips. Adherence to this commitment and others related to programming categories and ori-gination are specified as conditions of licence set out in the attached appendix. The Commission also notes the licensee's assurance that the video clip material broadcast will consist primarily of short video clips in various genres, including dance, opera and poetry.

It is further noted that Bravo! intends to enter into a program exchange agreement with the U.S. specialty service of the same name. Bravo! (U.S.) has committed funds to license a variety of programming from Bravo! (Canada) for exhibition on the U.S. service. The agreement will also enable Bravo! to select from the U.S. service the programs it wishes to distribute in Canada. The licensee has made a commitment that U.S.-produced programs, whether from Bravo (U.S.) or other sources, will not make up more than 25% of drama offerings in prime time on Bravo!

With respect to potential impact on existing services, the Commission is satisfied that Bravo! will attract a distinct audience, and will not, therefore, have an undue negative effect on other services.

In the first two years of operation, at least 40% of the programs broadcast on Bravo!, during both the broadcast year and the evening broadcast period, will be Canadian. In the third and fourth years of the licence term, the levels will increase to 50% overall during the broadcast year and 45% in the evening broadcast period. In the final two years of the term, the Canadian content will again increase, to 60% throughout the broadcast year, and 50% in the evening broadcast period.

The licensee shall adhere to the above-noted commitments, by condition of licence.

Also by condition of licence, and as discussed with the applicant at the hearing, CHUM shall devote to expenditures on Canadian programming at least $4.7 million in the second year of the licence term, and in each subsequent year, at least 33% of the previous year's gross revenues. Some flexibility in the accounting of these expenditures is provided for in the conditions of licence attached to this decision.

By condition of licence, and as committed to by the licensee, a minimum of $600,000 in the first broadcast year of the licence term, and in each subsequent year, a minimum of this amount, or 5% of the previous year's gross revenues, whichever is the greater, will be contributed to the Foundation to Assist Canadian Talent in the Arts (ArtsFACT). Through this foundation, Bravo! will provide a minimum of $3.6 million in grants to Canadian artists, arts groups and independent production companies over the licence term. The licensee expects that the resultant programming will form a fundamental part of the Bravo! schedule.

The independent producer Sleeping Giant has already been commissioned by Bravo! to create seven series of programs for telecast in the first year of operation. In view of this existing agreement, the Commission notes the licensee's commitment that Sleeping Giant will not be permitted to access funds from ArtsFACT for those seven series. Sleeping Giant will, however, be eligible to apply for funding from the script and concept development fund noted above.

Financial Matters

The Commission notes that the application filed by the licensee included a business plan, based in part on the assumption of a specific wholesale fee. The licensee assumed a wholesale rate of $0.25 per subscriber per month, when the service is distributed as part of the basic cable service.

The applicant also noted that its wholesale rate would fluctuate by cable system, depending upon the penetration of the tier on which it is carried. Accordingly, in its business plan, the licensee has assumed that the subscriber rate charged for the service when it is distributed on a high-penetration discretionary tier will be "made whole". The Commission notes that the foregoing assumptions form the basis of the applicant's financial projections and programming commitments.

As proposed by the licensee, and by condition of licence, the authorized monthly maximum wholesale rate per subscriber is $0.25, where Bravo! is distributed on the basic service.

Also by condition of licence, and as committed to by the licensee, paid advertising on Bravo! is restricted to an average of 8 minutes per hour, measured on a weekly basis, with some flexibility for the placement of advertising material in longer programs. All paid advertising material distributed shall be national advertising.

Based on all of the evidence available to the Commission, it is satisfied that Bravo! will provide significant diversity to viewers, that there is significant consumer demand for such a service, and that it is a financially viable undertaking.

Other Matters

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In its application, CHUM indicated that it would follow CHUM Limited's corporate plan for employment equity. The Commission will review the licensee's performance in implementing this corporate plan at the time of licence renewal. In the meantime, the Commission encourages the licensee to promote equitable representation in on-air staff positions and in voice-overs of commercial messages it produces.

The Commission also notes the licensee's commitments to spend a minimum of $50,000 annually on program dubbing, a minimum of $100,000 annually for closed captioning of programs, and a minimum of $150,000 annually for script and concept development.

The Commission expects the licensee to meet the commitments noted above regarding closed captioned programming, and encourages the licensee to exceed these commitments over the licence term.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

Conditions of Licence for Bravo!

For the purpose of measuring compliance with Conditions of Licence 1, 2, 3, 4 and 6 set out below, the first broadcast year of the licence term will be deemed to commence on 1 September 1994.

1(a) The programming provided by the licensee shall be drawn exclusively from Category 1 -News, Category 2 - Analysis and Interpretation, Category 3 - Reporting and Actualities, Category 5(b) - Informal Education, Category 7 - Drama, Category 8 - Music and Dance, Category 9 - Variety and Category 11 - Human Interest.

(b) In each broadcast year, no more than 25% of the Category 7 - Drama programming broadcast between 7 p.m. and 11 p.m. shall be produced in the United States.

(c) A maximum of 15% of the programming shall consist of Category 8(b) - Video Clips.

(d) A maximum of 10% of the programs on Bravo! shall have been broadcast, or shall be simulcast with programs broadcast, on any other television or specialty programming service of which CHUM Limited is the licensee.

2(a) From the date of commencement of service until 31 August 1996, the licensee shall devote not less than 40% of the broadcast year, and not less than 40% of the evening broadcast period, to the distribution of Canadian programs.

(b) From 1 September 1996 until 31 August 1998, the licensee shall devote not less than 50% of the broadcast year and not less than 45% of the evening broadcast period to the distribution of Canadian programs.

(c) From 1 September 1998 until 31 August 2000, the licensee shall devote not less than 60% of the broadcast year and not less than 50% of the evening broadcast period to the distribution of Canadian programs.

3.  In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notices CRTC 1993-93 and 1993-174, the licensee shall:

(a) From 1 September 1995 to 31 August 1996, expend on the acquisition of and/or investment in Canadian programs not less than $4,700,000.

(b) In each subsequent year of the licence term, expend on the acquisition of and/or investment in Canadian programs not less than 33% of the previous year's gross revenues.

(c) In each year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year set out in or calculated in accordance with this condition; in such case, the licensee shall expend in the next year of the license term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underspending.

(d) In any year of the licence term, including the final year, the licensee may expend an amount on Canadian programming that is greater than the minimum required expenditure for that year set out in accordance with this condition; in such case, the licensee may deduct:

  (i)  from the minimum required expenditure for the next year of the licence term, an amount not exceeding the amount of the previous year's overspending; and

  (ii) from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overspending and any amount deducted under paragraph (i) above.

(e) Notwithstanding the above, during the licence term, the licensee shall expend on Canadian programming, at a minimum, the total of the minimum required expenditures set out in or calculated in accordance with the licensee's conditions of licence.

4. In the first broadcast year, the licensee shall contribute $600,000 to ArtsFACT. In each subsequent broadcast year, the licensee shall contribute the greater of $600,000 or 5% of the previous year's gross revenues to ArtsFACT.

5(a) Subject to subsection (b), the licensee shall not distribute more than an average of eight minutes of advertising material during each clock hour, measured weekly.

(b) In addition to the eight minutes of advertising material referred to in subsection (a), the licensee may distribute, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.

(c) The licensee shall not distribute any paid advertising material other than paid national advertising.

6. From the date of commencement of service, the licensee shall charge each exhibitor of this service a maximum wholesale rate of $0.25 per subscriber per month where the service is distributed as part of the basic service.

7. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and approved by the Commission.

8. The licensee shall adhere to the provisions of the "Broadcast Code for Advertising to Children", published by the CAB, as amended from time to time and approved by the Commission.

9. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and approved by the Commission.

For the purpose of these conditions, the terms "broadcast day", "broadcast month", "broadcast year", "clock hour" and "evening broadcast period" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987; and "paid national advertising" shall mean advertising that is purchased at a national rate and receives national distribution on the service.