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ARCHIVED - Decision CRTC 2000-183

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Decision CRTC 2000-183
Ottawa, 6 June 2000
Canal Indigo, a general partnership
Across Canada
– 199911110 – 199911128 – 199911136
Applications processed by
Public Notice CRTC 2000-25
dated 10 February 2000
Summary
The Commission approves, by majority vote, the applications by Canal Indigo to amend the conditions of licence relating to the contribution to Canadian programming for its pay-per-view television undertaking, its direct-to-home pay-per-view television undertaking and its video-on-demand television undertaking.
From now on, the contributions will be fixed at 5% of the gross revenues for each service, a level equivalent to that imposed on similar services.
The applications

1.

The Commission approves, by majority vote, the applications by the licensee to amend condition of licence no. 5 of its French-language pay-per-view television service, condition of licence no. 8 of its direct-to-home pay-per-view television service, and condition of licence no. 5 of its national, digital, French-language video-on-demand (VOD) programming undertaking, by reducing the required percentage contribution to Canadian programming from 10% to 5%. The licensee indicated that its applications are intended to reduce its financial burden in order to ensure that its business plans are adhered to and its services are competitive.
Intervention

2.

The Canadian Association of Film Distributors and Exporters (CAFDE) submitted an intervention opposing these applications. CAFDE expressed concern about the licensee's lack of commitment to the production, promotion and broadcast of Canadian and Quebec films. The intervener pointed out that, as part of the transfer of effective control and ownership of Radiomutuel Inc.'s broadcasting undertakings to Astral Communications inc. (now Astral Média inc.), Astral made a commitment to maintain its policy of acquiring all of its Canadian programming from independent Canadian producers and distributors, and to continue ensuring equitable and non-discriminatory treatment of all Canadian distributors.

3.

Canal Indigo is a general partnership made up of four partners: Groupe TVA inc., Cogeco Radio-Télévision inc. and Télévision Quatre-Saisons inc. (each holding 20% of the partnership), and Viewer's Choice Canada Inc. (holding 40%). Astral Média inc. holds 50.1% of Viewer's Choice Canada Inc.'s shares.

4.

In response, the licensee stated that these applications apply to Canal Indigo only, and do not in any way affect the commitments made by Astral in the context of the application for transfer of control referred to above. The licensee maintained that the sole objective of its applications is to establish an equitable obligation for Canal Indigo, namely that it be required to make a contribution equivalent to that imposed on its competitors, in order to prevent a major imbalance and ensure vigorous competition. It added that the current environment is very different from what it expected when if filed applications to operate these services, particularly with regard to the number of addressable subscribers and the number of channels on which the services are generally provided.

5.

Concerning the contribution remitted by its VOD service to the Harold Greenberg Fund (the Fund), Canal Indigo argued that [ translation] " the original equity investment from this contribution of 5% of gross annual revenues is recouped, thus representing an incremental increase in the original investments, on which the Fund can count."
The Commission's decision

6.

In approving these applications, the Commission has taken into consideration the past, present and projected financial results of the licensee's services which indicate, on the whole, a precarious financial situation. The Commission has also considered the licensee's argument that it is disadvantaged, particularly with regard to its DTH and VOD services, by its obligation to contribute 5% more to Canadian programming than its competitors do. Finally, the Commission considered the fact that original investments are recouped, which would reduce the financial impact on the Fund.

7.

The amended conditions of licence read as follows:
French-language pay-per-view service
5.    The licensee is required to invest, over the licence term, at least 5% of its gross revenues to the production of Canadian feature films and Canadian events. These investments shall be additional to expenditures arising from the licensee's commitment to promote these feature films and events. For the broadcast year ending 31 August 2000 and for each subsequent broadcast year, the licensee shall contribute at least 5% of the gross revenues of the previous broadcast year. This contribution shall be remitted to a fund which shall be administered independently from the licensee.
French-language direct-to-home pay-per-view service
8.    The licensee is required to contribute a minimum of 5% of the annual gross revenues earned by its DTH pay-per-view programming undertaking to an existing Canadian program production fund administered independently of the undertaking. For the broadcast year ending 31 August 2000 and for each subsequent broadcast year, the licensee shall remit the contributions monthly within 45 days of month's end and they shall represent a minimum of 5% of that month's gross revenues.
National, digital, French-language video-on-demand (VOD) programming undertaking
5.    The licensee shall contribute to The Harold Greenberg Fund/Le Fonds Harold Greenberg, for equity investment in Canadian films, a minimum of 5% of the gross annual revenues earned by its VOD programming undertaking. The licensee shall remit its first contribution no later than 45 days following the end of the month in which it commences operations. Contributions made thereafter shall take the form of monthly instalments to be remitted within 45 days of month's end and representing a minimum of 5% of that month's gross revenue.
Secretary General
This decision is to be appended to each licence.  It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca
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