ARCHIVED - Decision CRTC 2000-469

13^ièmeRue — a new specialty service

On 24 November 2000, the Commission made a decision to issue a licence for a new national French-language Category 1 specialty television service to be called "13^ième Rue". The Commission noted at that time that reasons, terms and conditions of the new licence would follow at a later date.

"13^ième Rue"will be devoted exclusively to suspense and mystery. As noted in Public Notice CRTC 2000-171 of today's date, 13^ième Rue and 20 other new digital specialty services will be made available to subscribers by all distributors who offer programming to the public using digital technology and by some cable operators who serve smaller markets using analog technology. The licence, when issued, will expire 31 August 2007.

13^ième Rue will add to the diversity of the Canadian broadcasting system by offering a range of suspense programming, which is relatively scarce on French-language television. In granting a licence to 13^ième Rue, the Commission considered the interest generated in a suspense and mystery channel and the synergies made possible by licensing a similar English-language service, 13^th Street, proposed by the same applicant (Decision CRTC 2000-449). In Public Notice 2000-171, the Commission discusses the criteria for the approval of this and other applications for new specialty services.

13^ième Rue will be a wholly-owned subsidiary of a company to be incorporated, in which Groupe TVA inc. (TVA) and Global Television Network Inc. (Global) each will hold a 45.05% interest and Rogers Broadcasting Limited (Rogers) will hold a 9.9% interest. A partnership with Universal City Studios Inc. will allow the latter to acquire the shares of the licensee at any time in accordance with a memorandum of understanding.

Terms and conditions of licence common to all of the new Category 1 specialty services are set out in an appendix to Public Notice 2000-171. Conditions specific to this application can be found in the appendix to this decision.

Programming

Nature of service

13^ièmeRue will offer a national French-language Category 1 specialty television service devoted to mystery, fantasy suspense and horror. The programming will appeal to viewers who like all types of suspense, and will take advantage of the considerable popularity of books, movies, magazines and television shows of this genre among Francophones. The program categories identified by 13^ièmeRue are set out in a condition of licence found in the appendix to this decision.

13^ièmeRue will pursue the following themes:

• crime stories

• fright nights

• mysteries

• suspense

• thrillers

• scary tales

• spy stories
  

The licensee proposes to include two 60-minute weekly programs on the following themes among its original Canadian productions:

• writers’ circle: a program presenting conversations with authors of suspense stories and novels; and
  

• murder mystery: a program in which guests try to solve mysterious occurrences.
  

Contributions to diversity

13^ièmeRue will contribute significantly to diversity in the Canadian broadcasting system because there are currently no French-language specialty services devoted to mystery and suspense. Through proposed partnerships with the English-language suspense and mystery service approved in Decision CRTC 2000-449 (13^th Street), Universal Studios and other international programming sources, 13^ième Rue will be in a position to provide a range of Canadian and foreign programs that are generally different from those available from other sources.

To ensure that the non-Canadian programming on 13^ième Rue comes from a variety of international sources, the appendix to this decision contains a condition of licence requiring that the licensee devote at least 80% of its non-Canadian content to programs from sources outside North America.

Canadian content

The licensee made a commitment to broadcast a minimum of 50% Canadian content from 6 a.m. to midnight and a minimum of 50% from 6 p.m. to midnight for the duration of the licence term. The licensee also committed to broadcast a minimum of 78 hours of original Canadian programming in each year of the licence term.

Canadian programming expenditures

Beginning in the year following the first year of operation, the licensee will expend a yearly minimum of 40% of its gross advertising, infomercial and subscription revenues on Canadian programming. The licensee estimates that, in accordance with this formula, it will spend over $17 million on Canadian programming over the licence term. A formula for calculating the amounts required is set out in a condition of licence found in the appendix to this decision.

Independent production

The licensee committed to draw a substantial portion of its programming from independent producers. It committed to devote $17.5 million to independent producers over the licence term. To stimulate Canadian production, which supplies only a very small share of the types of programs proposed, 13^ième Rue will devote $400,000 to co-produce such programs with 13^th Street. Public Notice 2000-171 contains a condition of licence relating to the use of the independent production sector which applies to the licensees of all Category 1 specialty services.

Interactivity

The licensee plans to initially offer a website to complement the proposed service until digital technology opens other avenues. The website will contain additional information, broadcast material, chat rooms and e-mail. The licensee considers that it will be able to offer some interactive capability when the service is launched using first-generation set-top boxes.

Ownership and synergies

As noted above, TVA and Global will each hold a 45.5% interest in the company to be incorporated, of which 13^ième Rue will be a wholly-owned subsidiary. Rogers will hold a 9.9% interest. A memorandum of understanding with Universal City Studios Inc. will allow the latter to acquire shares of the licensee company. The licensee will be controlled by its board of directors.

The 13^ième Rue partnership is strong and holds great promise in terms of synergies. The partnership is based on the expertise of TVA, Global, Rogers and Universal Studios in their respective markets. TVA and Global both have experience in this area and have the facilities and production capability required to successfully operate the service. For its part, Rogers is in a good position to experiment with digital innovations, while Universal Studios, with its film library and 13^th Street/13^ième Rue trademark, can contribute to the success of the service through its programming and expertise in promotion and marketing.

In addition, both services will benefit from the joint development of programming in English and French and through sharing production facilities. There is also a possibility of cross-promotion and cross-marketing between 13^ième Rue in French and 13^th Street in English. Moreover, the international platforms of 13^th Street/13^ième Rue in France, Germany, Spain, Latin America and Brazil will provide opportunities to export Canadian programming and allow access to an existing library of international programs of this genre in third languages.

Incorporation documents

This authority will only be effective and the Commission will only issue the licence when the applicant has clearly demonstrated that it is a "qualified corporation" as defined in the Direction to the CRTC (Ineligibility of non-Canadians) and is eligible to hold a licence. Consequently, the applicant is required to file all relative incorporation documents (certificate and articles, by-laws, etc.), copies of the executed Memorandum of Understanding with Universal, the executed Shareholders Agreement, Franchise Agreement, Trademark Licence Agreement and any other agreement related to the service, for review and approval by the Commission.

Other matters

Rate

The business plan for 13^ième Rue proposes a monthly wholesale rate of $1 and a three-month free trial period.

Service to the hearing-impaired

The licensee committed to close caption at least 50% of all programming in the first year of operation. That amount will increase gradually, and by the seventh year of operation, a minimum of 90% of the programming broadcast during the broadcast day will be closed captioned. The Commission expects the licensee to fulfil these commitments.

As soon as the service is launched, the licensee will have a teletypewriter (TTY) and will ensure that the telephone number is prominently displayed.

Service to the visually-impaired

The licensee indicated that it will have the equipment required to provide descriptive video service (DVS). The Commission encourages the licensee to provide audio description of visual information wherever possible, and to provide described video programming as outlined in Public Notice 2000-171.

Employment equity

The Commission notes that this licensee will be subject to the Employment Equity Act that came into effect on 24 October 1996. It will therefore be required to file reports concerning employment equity with Human Resources Development Canada.

Conclusion

The Commission is satisfied that 13^ième Rue will provide a range of unique and attractive programs that will contribute to the diversity of the Canadian broadcasting system. Licensing a specialty television service devoted to mystery, fantasy, suspense and horror will help stimulate industry interest in the production of French-language programming in this genre. The Commission also considers that the expertise and resources of each partner will serve to ensure the success of 13^ième Rue.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix to Decision CRTC 2000-469

The licence for the national French-language programming undertaking (specialty television service) known as 13^ième Rue will be subject to the following conditions, as well as those set out both in Public Notice CRTC 2000-171, and in the licence to be issued.

Nature of service

3. In each broadcast year, the licensee shall devote at least 80% of its non-Canadian programming to programs from sources outside North America.

Exhibition of Canadian programs

Expenditures on Canadian programs

Definition

For the purpose of these conditions of licence, the term broadcast day shall have the same meaning as that set out in the Television Broadcasting Regulations, 1987.