TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
APPLICATIONS FOR LICENCES TO OPERATE NEW PAY AND SPECIALTY
SERVICES FOR DIGITAL DISTRIBUTION / DEMANDES DE LICENCES
VISANT LA DISTRIBUTION NUMÉRIQUE DE NOUVEAUX SERVICES DE
TÉLÉVISION SPÉCIALISÉE ET PAYANTE
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 15, 2000 le 15 août 2000
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Applications for Licences to operate New Pay and Specialty
Services for Digital Distribution / Demandes de licences
visant la distribution numérique de nouveaux services de
télévision spécialisée et payante
BEFORE / DEVANT:
Françoise Bertrand Chairperson of the
Commission / Présidente
Andrée Wylie Chairperson / Présidente
Jean-Marc Demers Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
Martha Wilson Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Peter Cussons Hearing Manager
Secretary / Gérant de
l'audience et secrétaire
Alastair Stewart Legal Counsel /
Peter McCallum Legal Counsel /
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 15, 2000 le 15 août 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
PRESENTATION BY / PRÉSENTATION PAR
CTV Inc. 325
PRESENTATION BY / PRÉSENTATION PAR
BCE Media Inc. et al 562
Hull, Quebec /Hull (Québec)
--- Upon resuming on Tuesday, August 15, 2000 at 0830 / L'audience reprend le
mardi 15 août 2000 à 0830
7458 THE CHAIRPERSON: Good morning. Welcome to day
two of this hearing.
7459 Mr. Secretary.
7460 MR. CUSSONS: Thank you, Madam
7461 Our next applicant is CTV Inc. for CTV News
Centre Nouvelles, CTV Newsnet BC, CTV Newsnet Alberta, TV.tv, The Digital
Network, the Men's Entertainment Network, Discovery Health Channel, Exploration
PRESENTATION / PRÉSENTATION
7462 MR. FECAN: Good morning, Madam Chair, and good
7463 My name is Ivan Fecan and I am President and
CEO of CTV Inc. I would like to introduce our panel and to provide some
background on the strategy of the nine exciting applications you will hear this
7464 On my right is Trina McQueen, Executive
Vice-President of CTV. On my left is Ken Murphy, President of the Discovery
Channel. On Trina's right, is Kathie Robinson, Partner, Goodman Phillips and
Vineberg, legal counsel to CTV and member of the CTV board. Next to Kathie is
Nikki Moffat, Vice-President, Finance, CTV Specialty Operations. On the far
right is Kathie Macmillan, President, Goldfarb Consultants.
7465 Behind me, beginning on my far left is Robert
Hurst, Acting Senior Vice-President, CTV News. And his team for these
applications: Vince Pons, Vice-President and General Manager, CJOH, Ottawa;
Scott Hannant, Executive Producer of News, CJOH, Ottawa; Lynn Raineault, News
Director, VTV, Vancouver; Reg Thomas, News Director, CFRN, Edmonton; Len Perry,
News Director, CFCN, Calgary.
7466 And on the side panel, beginning on your far
right are Joanne Macdonald, Managing Director, CTV News; Paul Brown, our
consultant on this process; Monique McAlister of GoodMan Phillips and Vineberg;
Elizabeth Duffy-MacLean, Director, Business Affairs, Netstar; John Festinger,
General Manager, VTV, Vancouver; Bill Mustos, Vice-President of Dramatic
Programming, CTV; Ed Robinson, Vice-President of Programming and General Manager
of The Comedy Network; Paul Lewis, Vice-President of Programming, Discovery
Channel. Joining us from BCE, Jim Macdonald, Senior Vice-President of
Programming and Chief Media Officer, BCE.
7467 I would also like to recognize in the audience
Brian Aune, our trustee. Brian, please stand. Thank you. And I would be remiss
if I didn't recognize Mr. Ottawa, Max Keeping who is in the audience, and Craig
Oliver, our CTV Ottawa Bureau Chief.
7468 I think it is clear -- I hope it is clear
to you -- from this long list of introductions that CTV regards this as a
very significant hearing.
7469 We, as an industry, the Commission and the
viewers, are all embarking on a challenging, exciting adventure and CTV is
delighted to be here.
7470 The digital world means a number of things: A
lot more choice for viewers; real interactivity for television due to advanced
set-top boxes, and the opportunity to narrowcast and thoroughly satisfy the
viewer's interest in a tightly defined program genre.
7471 But digital will also mean a real test for the
entrepreneurial skills of each applicant. Canada needs strong companies to
deliver the results. Our team has shown the grit and stamina to take on though
challenges and make them work.
7472 We have the creative and marketing skills to
play our part in making digital a success and we would feel privileged to do
7473 Our Class One applications leverage our
existing expertise, our knowledge of certain program streams, our technical
infrastructure and our cross-promotion capabilities.
7474 I think you will find that our wholesale rates
are among the lowest per genre, while our Canadian content levels are among the
highest per genre. It all adds up to what we call the CTV advantage and how it
will work for the system.
7475 We believe in Canadian television and the
success of our Canadian program strategy shows a consistent ability to deliver
on that belief. And at the end of the day, when you strip all the techno-talk
away, digital is just a new platform to tell good stories in innovative ways. It
always comes down to the content and that is what we love to do.
7476 Here is Trina McQueen who has primary
responsibility for these applications to tell you more.
7477 MS McQUEEN: Good morning, Madam Chair and
7478 We have worked hard to choose and build
applications that meet the Commission's criteria and we are proud of
7479 Let's start with Canadian programming. Our
Canadian exhibition commitments are among the strongest of all the applications
7480 On audience attractiveness, we make three
points. The research shows that the demand for our services is very high, from
72 to 88 per cent positive interest.
7481 Our subscriber fees are among the lowest of
all applications. These services will keep digital affordable. Our commitments
to Canadian program expenditures are among the highest and that means high
7482 Our applications focus on diversity. Each one
builds on a CTV strength to provide viewers with new ideas, fresh themes and
real choice. And each application provides innovative use of interactive
technology. Every one of our interactive ideas can be achieved with the
technology available now, and each one will evolve as the strengths of digital
are fully realized.
7483 Our business plans are reasonable,
conservative, and we do have the ability to weather tough times.
7484 And here is a guarantee about how all of this
can be achieved. It's the CTV team. Each CTV applicant that you will hear from
has personally been there and done that. They have launched stations and
channels and program services. They are proven creators of excellent Canadian
content. They have delivered before and they are eager for the chance to deliver
7485 But what they will deliver, if approved, is
different because this is the beginning of true interactivity, not the
culmination, but the beginning.
7486 So we would like to begin with some thoughts
on this next new thing, interactivity. We are positive and optimistic about
interactivity and that is because we have done a lot of groundwork. CTV's
Discovery Channel was the pioneer in Canada of television and the Web, and my
colleague who led that pioneering effort is now the President of the
7487 Here is Ken Murphy.
7488 MR. MURPHY: Good morning, Madam Chair and
7489 In the five short years since the Web entered
our everyday vocabulary, Netstar and CTV have learned how to produce innovative,
popular and distinctly Canadian Internet programming.
7490 We have developed a team of experienced
professionals -- producers, journalists, artists and software
gurus -- who understand what it takes to produce credible and attractive
digital content on a daily basis.
7491 We launched the first television Web site in
Canada and by a wide margin we produce the most successful science, nature and
sports sites in Canada, and rds.ca is one of the most popular francophone Web
7492 This fall, we are launching CTV News.com, en
entirely new approach to on-line news which will make us a leader in the
delivery of Internet video.
7493 Over the past five years, we have invested
more than $15 million in Internet infrastructure and content development. We
have the experience and the leadership credential when it comes to Canadian
7494 And we are excited about the prospect of
Canadians interacting with their programs through the friendly remote control
and familiar TV screen, especially the many Canadians not entirely comfortable
with computers and software or more and more, and I am speaking from experience,
for when the kids are hogging the PC.
7495 All of the digital channels we are about to
present this morning have significant interactive components built on our
7496 Let's take a look now at Jay Ingram as we
walks us through some of the new features we are developing for @discovery.ca.
Each of the CTV digital services will have their own versions of these
--- Video presentation / Présentation vidéo
7497 MR. MURPHY: These digital features are only
available now to a handful of Canadians with advanced set-tops. But all are
available through the Web, and by September 2001, they will be available through
7498 CTV wants to build on our television and
Internet programming experience to provide Canadians with attractive,
sustainable and distinctly Canadian "next level" programming.
7499 MS McQUEEN: The threads of interactivity are
woven through each of the channels we will present today and on the screens in
front of you, the interactive sections will be identified as "The Next
7500 Let's start our applications with three
proposals in our of CTV's core strengths, and that is news. Our news chief,
Robert Hurst, led the launch of CTV's successful Newsnet.
7502 MR. HURST: Good morning,
7503 We believe there is compelling need for
all-news channels in British Columbia, Alberta and a bilingual service right
here in the National Capital Region.
7504 People in these regions have expressed keen
interest in having an all-news channel of their own. From our research, 88 per
cent said they liked the idea.
7505 Now you know that news programming is always
popular to Canadians and the most popular news programming of all is, of course,
news from over the backyard fence, from across town and from across the
7506 These all-news channels will give viewers
something they do not have now and that is continuous and comprehensive coverage
of news and events that are important to them and to their
7507 We believe these regions are big enough to
support all-news channels of their own in the same way that Toronto has its own
all-news channel, CP24. As well RDI and Le Canal Nouvelles predominantly focus
7508 It is best to explain to you how these
regional all-news channels will work by examples, by real examples, and as you
will see on the screen in front of you, real stories, and that is why we have
invited these News Directors from across these regions to come and talk to you
7509 First to Alberta, Reg and Len.
7510 MR. THOMAS: A few months ago, Alberta faced
the possibility of a deadly meningitis epidemic.
7511 A grade 11 student at W.P. Wagner High School
in Edmonton was fatally stricken with bacterial meningitis. Health care
professionals urgently prepared a plan to vaccinate tens of thousands. The
national news service covered this outbreak for a few days only.
7512 Alberta's existing television stations
reported on scheduled news programs, but this wasn't enough. Newsrooms were
overwhelmed as thousands of Albertans desperate for answers flooded the phone
7513 The health crisis exposed the limitations of
existing convention television news sources.
7514 MR. PERRY: Newsnet Alberta would have provided
addresses of inoculation clinics. Live cameras would have shown parents which
clinics had long line-ups and which didn't.
7515 Medical officers of health would have updated
the public at a moment's notice putting an end to rumours that were starting to
spread, and although two people died from the meningitis outbreak, 173,000 young
Albertans were vaccinated. For the doctors and nurses, it was their shining
hour. For the broadcast industry, it could have been.
7516 CTV Newsnet Alberta would have provided a
critical service when Albertans needed it most.
7517 M. PONS: Le besoin était grand ici dans la
région, comme plusieurs de nous l'ont vécu.
7518 En janvier 1998, la tempête de verglas s'est
abattue sur l'Ontario et le Québec. Dans la Région de la capitale nationale les
lumières se sont éteintes, l'électricité a manqué et on gelait dans nos
7519 Les bulletins de nouvelles nationales ont
concentré leur couverture des événements à Montréal et ses environs. Mais aussi
dans notre région, les tours de transmission se sont écrasées. Les fermiers ne
pouvaient plus traire leurs vaches faute d'électricité.
7520 A CJOH, nous sommes allés en ondes en direct
plusieurs fois durant la journée de la crise, mais malheureusement nous avons dû
limiter la plus grande partie de notre couverture aux heures réservées aux
7521 MR. HANNANT: News Centre Nouvelles would have
provided continuous updates of power outages, community alerts such as where and
when new emergency shelters were opening and critical information like the
location of emergency soup kitchens and food banks.
7522 CTV News Centre Nouvelles would have provided
a critical service when people in the National Capital Region needed it
7523 MS RAINEAULT: In my region, British Columbia,
politics are never dull. Consider this last year alone. Premier Glen Clark
resigns, caught up in allegations of favouritism and the licensing of a gaming
7524 Clark is the third Premier forced to resign
from office in recent years, and his successor, Ujjal Dosanjh, needs to call an
election this fall or next spring.
7525 Newsnet BC would be there to engage viewers in
the political process like never before at a time when voter turn out has
dropped in each of the last four elections. Newsnet BC would allow voters to ask
direct questions of each party leader, watch an entire speech instead of short
sound bites, examine issues and party platforms page-by-page and word-for-word
and would put live cameras on each campaign bus.
7526 CTV Newsnet BC would be a critical service
when the community needs it, in this example, for the health of B.C.'s
7527 MR. HURST: Commissioners, these three examples
we have given you, of course, are big stories and you may be asking yourself,
"Well, what about the rest of the year? What about every day?".
7528 Well, each of these News Directors will tell
you that every day there are stories and issues and concerns that resonate
across each of their regions.
7529 MS RAINEAULT: In British Columbia, we could
tell you about the daily irritants of closures on the Lions Gate Bridge and
ferry waits at Horseshoe Bay.
7530 MR. HANNANT: In the National Capital Region,
we would be telling you about water quality on beaches, from Meech Lake to
Mooney's Bay, or ski conditions at Vorlage.
7531 MR. THOMAS: In Alberta, we would provide live,
full coverage of a news conference concerning a consumer recall or the latest
medical advancement from the University of Alberta.
7532 MR. HURST: All of these channels will be 100
per cent Canadian in content and will provide an opportunity for more and more
people in these regions to have their stories told and their voices heard. This
comes at a time when the CBC is cutting back its local news efforts
7533 These regional services will also
counterbalance the news landscape at a time when many of the news outlets in
these regions will be controlled by a single owner.
7534 Telling stories about Canada and about
Canadians is a core business here at CTV. We have been building our news
reputation every day for 35 years. It is a reputation built on accuracy,
fairness and balance and it is the kind of experience that will ensure the
success of these regional news channels as an anchor channel and the success of
your digital roll-out.
7535 MS McQUEEN: Commissioners, the Discovery
Channel is the only television service ever to earn the Canadian government's
respected Michael Smith Award for Science and from the beginning medicine has
been an import ant part of Discovery's science programming. So the Discovery
Health Channel is a natural.
7536 Here is Ken Murphy.
7537 MR. MURPHY: Madam Chair and Commissioners.
Let's take a look at the service.
--- Video presentation / Présentation vidéo
7538 MR. MURPHY: A health channel requires a
broadcaster with experience not only in television news and documentary
programming but extensive experience dealing credibly with complex scientific
research and technological information. Canadians have, in five short years,
come to trust Discovery Channel in this role, rating us for the last three years
the highest quality television service on the dial. Now, with CTV, the most
watched and most trusted name in Canadian news, with our partners, Discovery
International and BCE, we are ready to apply our scientific experience to the
7539 Discovery Health Channel wants to focus on
issues unique to the Canadian healthcare system while never ignoring that health
and wellness is vital to us all, regardless of where we live. We want to explore
alternative experimental non-western and traditional healthcare, while putting
all announcements and all approaches to medicine in context through expert
7540 We have solid, relevant experience. For
example, our award-winning flagship program @discovery.ca provided Canadians
with the most in-depth and insightful coverage of the recent human genome
project. We have built strong links with most important research, scientific and
health care organizations in Canada including: Health Canada, the Canadian
Institute for Health Information, the National Research Council, and Toronto's
Hospital for Sick Children.
7541 We deal regularly with a network of scientists
in virtually every university in Canada, and we have very strong support from
intervenors across the health field. We want to build on these important
7542 We have built a unique team of television and
Internet producers and journalists able to wave through the complexities of
rapidly-expanding science and sometimes exploding hype. Our team is the envy of
science and documentary producers and broadcasters at international
7543 I'm very pleased to announce that beginning
this fall @discovery.ca will be telecast daily in the United States. Another
example of the growing international recognition of our unique expertise in the
area of science journalism. Discovery Communications International has made a
firm commitment to buy our Canadian health programs for distribution around the
7544 We want to build on our strong relationships
with Canada's finest independent producers to jointly develop and produce a
whole new stream of health and medical documentary programming with a clear
Canadian focus. Discovery Health Channel will indeed be Canadian, delivering 70
per cent Canadian content from the start, high quality content.
7545 The flagship of the Discovery Health Channel
will be a daily, one-hour program called HealthBeat. It will guide Canadians
through the frequent announcements from the research and pharmaceutical
communities, providing context and expert scrutiny.
7546 Our experienced team of science and health
science journalists will provide understanding, insight and context beyond the
two-minute headlines or the sound bytes. We will explore the complex health
issues of the day as only a one-hour program can do. We will debate emerging
health issues and medical ethics, and will look at the underlying and sometimes
conflicting interests of the various stakeholders in the healthcare system. In
summary, HealthBeat will provide a daily stream of quality, in-depth health and
medical information Canadians can trust.
7547 We will create a new series of documentary
strands including: 21st Century Medicine, focusing on an experimental and
innovative developments in health science; Ancient Healers and Hands on Healing
will explore traditional and non-western health practices; and Body Moves and
Lifespan will focus on physical fitness and working toward a healthier
7548 Our digital journalists and producers will
provide Canadians with: detailed explanations to help demystify sometimes
confusing biological, scientific or technical terms; will provide quick links to
national, regional and local healthcare establishments; and will provide a
rapidly growing body of Canadian video health features available now through the
Web and, over time, through the set top.
7549 We have the strongest interactive experience,
and with BCE as a partner it will be even stronger. We have a solid business
plan and in the health genre we are offering the highest expenditures on
Canadian programming, $45.4 million over the license term, and the lowest
wholesale fee at 25 cents. We commit to over 500 hours per year of original
Canadian content, and through our partnership, Discovery Communications
International, we will have unparalleled high quality program supply and we can
ensure that Discovery Health Channel's programming is seen around the
7550 Discovery Health Channel is making a promise
to Canadians. We will provide the highest quality programming, presenting health
and medical information in an accurate, timely and responsible manner. We are
experienced, we are qualified and we are ready.
7551 MS McQUEEN: Commissioners, as CTV's Head of
Drama Programs, it's clear that Bill Mustos is behind some of Canada's best
dramatic projects. There is no puzzle about that. Nevertheless, it is clear that
in some ways Mr. Mustos is a man of mystery.
7552 MR. MUSTOS: Good morning, Madam Chair,
Commissioners. To give you just a clue about what Shadow TV will be like here is
a quick look.
--- Video presentation / Présentation vidéo
7553 MR. MUSTOS: I have been waiting for three and
a half years to talk to you about Shadow TV.
7554 When I joined Baton in March of 1997, one of
the first things I did was put a number of Canadian murder mysteries into
7555 While CTV does many forms of drama, we have
come to realize that the mystery genre is a very compelling way to explore
character, ethics, culture, history and matters of justice. In truth, we have a
passion for mysteries, a passion which has resulted in expenditures exceeding
$22 million in just the last three years. From the police drama, Cold Squad, to
the Bookfair Murders, to the newly-launched series, Mysterious Ways, CTV loves a
7556 Not surprisingly, Canadians at large are
fascinated by a good whodunit. In a poll conducted by Goldfarb Consultants an
overwhelming majority expressed a positive interest in Shadow TV: 86 per cent of
our respondents said they would likely watch Shadow TV on a typical weekday for
at least one hour.
7557 In addition to CTV's unparalleled commitment
to the mystery genre, Shadow TV will also be able to turn to Discovery Channel
for crime-solving expertise of the scientific kind. Discovery has explored the
latest in forensic science and technology in programs like Exhibit
7558 CTV will commit significant resources to
Canadian mystery programming: $350,000 will be spent on developing original
Canadian screenplays, and at least 25 hours of original Canadian programs will
be commissioned from independent producers each year
7559 Shadow TV will also develop original one-hour
documentaries. The programs will highlight up-to-date forensic science
techniques, from the latest in handwriting analysis to ballistics
7560 But the benefits will not just be going to
Canadian independent producers, screenwriters and directors. Shadow TV will also
draw on the considerable talents of Canada's mystery novelists, bringing their
words, their fictitious crimes and their detectives alive and onto the
television screen, in many cases for the first time.
7561 You will see Gumshoe Inc., a half-hour
magazine program airing Monday to Friday that will feature interviews and
profiles of mystery writers and film directors. Throughout the week, viewers
will be able to participate in the twists and turns of an interactive mystery
7562 And Case Closed, a series of one-hour
documentaries highlighting the "how to" of sleuthing, including psychological
profiling and DNA testing.
7563 There will also be lots of children's
programming. A strong one-hour block from Monday to Friday and two hours on
Saturday and Sunday. Young sleuths will match wits with their favourite
detectives in Canadian productions of such classics as Nancy Drew, the Hardy
Boys and The Magician's House.
7564 Shadow TV will encourage lots of interaction.
For example, Cat and Mouse will allow viewers to play detective, creating their
own mysteries, interacting with other mystery buffs and finding out the latest
tricks in the detective trade.
7565 Over time, other interactive programs will
allow viewers to select their own ending to a story or select a different camera
angle to help solve the mystery.
7566 Shadow TV is unmatched in its genre: The
highest Canadian content beginning at 53 per cent, rising to 70 per cent; the
highest Canadian expenditure proposal as a percentage of revenue; a proven track
record in the mystery genre -- over $22 million in the last three years;
guaranteed program supply based on established relationships with independent
producers; and, with the lowest wholesale rage of 23 cents a month Shadow
delivers another plot twist.
7567 All this will require significant investment
in programming to create new and original content. As the only Canadian network
to have extensively developed and heavily invested in mystery and forensic
programming, CTV knows what evil lurks in the hearts of men, and we can bring it
to the digital screen.
7568 MS McQUEEN: Commissioners, Jon Festinger
launched VTV, Vancouver's innovative all digital channel. For him that was an
exciting emersion course in digital, he has never quite recovered, and that is
how he led us to DGNet.
7569 MR. FESTINGER: Good morning, Madam Chair,
Commissioners. Here is a look at what DGNet is all about.
--- Video presentation / Présentation vidéo
7570 MR. FESTINGER: Technology. It touches every
part of our lives, and now it has given way to a new generation. The digital era
is upon us and the world is embracing it.
7571 Although it can be easy to get overwhelmed,
the possibilities make this a truly exciting time to be digital.
7572 DGNet will be the resource to demystify the
technology, to support, to inform and to entertain Canadian families and
consumers. From the Internet on your cell phone to smart appliances, Canadians
need a place they can turn to when they are curious, excited and ready for this
great technological adventure.
7573 With the new media strength of our partner,
BCE, whose Sympatico service is the most popular Web site in Canada, we are in a
wonderful position to help.
7574 Canadians love the idea of a technology
network. Nearly three-quarters of those asked showed positive interest in
DGNet's concepts and an even higher number, 86 per cent, felt that the potential
subjects covered on DGNet are relevant to today's generation of viewers. With 54
per cent of Canadians having access to the Internet, compared to just 2 per cent
a mere 10 years ago, it is no wonder that Canadians find this idea to be timely
7575 DGNet's programming will offer a
user-friendly, interactive experience that enables the entire family to not only
learn and enjoy, but also to be full participants in this television experience.
It will be a mix of interactive entertainment, introduction to the basics, and
discussion with the experts.
7576 DGNet will present at least 13 one-hour
documentaries and at least 65 half-hour series episodes in each year of the
licence term from the independent production sector.
7577 DGNet will be made in Canada for
7578 What's on?
7579 On DGNet viewers can look forward to programs
7580 "Digital Desk" -- DGNet's daily flagship show.
"Digital Desk" will keep Canadians up to date with all the technology news of
the last 24 hours. Canadians will be able to ask for help and get answers from
the technology experts.
7581 "ScavEngine" is an Internet scavenger hunt,
without physical or dimensional boundaries, designed for family enjoyment. Two
parent-child teams will follow a trail of clues in an attempt to be the first to
reach the secret web destination -- interactive family fun.
7582 "Wired Women" is a half-hour, studio-based
program featuring the stories of Canadian women who are leading the digital
revolution. Whether as a web master in the hottest high tech company or as a mom
working out of her home, women are wired for the digital world.
7583 DGNet will be a leader in interactive
applications by virtue of its genre.
7584 Being interactive will also be about enhancing
the television experience, making it easy and enjoyable. Whether it is the
uninitiated parent or her wired child techie, viewers will be able to play games
with their families, access more information on the best buys, the "how-to's",
or find the cure for those pesky system errors.
7585 The CTV advantage:
7586 At 23 cents, DGNet is the most affordable of
the technology applications, and at 53 per cent, proposes the highest percentage
expenditure commitment on Canadian programming in this genre. Combined with
strong support to independent production and 58 per cent Canadian content rising
to 75 per cent, DGNet is, in our view, the Commission's best technology
7587 CTV and BCE's DGNet will bring to Canadian
families and consumers a sense of confidence and amazement at the new role of
7588 MS McQUEEN: Commissioners, before Bill Mustos
came to CTV he launched the Canadian Television Fund, and that has given him an
exceptional insight into the struggles and the glories of Canadian television.
And that is the story of TV.tv.
7589 MR. MUSTOS: Let's take a look at what you will
see on TV.tv.
--- Video presentation / Présentation vidéo
7590 MR. MUSTOS: In the digital world Canadian
programming needs a venue where it can be showcased with pride. With TV.tv we
feel we have come up with such a place. TV.tv offers a solution that will give
Canadian viewers a roadmap and a guide to the full range of Canadian TV
7591 TV.tv is really three services in one. Its
primary mission is to showcase Canadian programs, those who create them, and
those who make them come alive on screen.
7592 TV.tv's second goal is to offer meaningful
information about television and its place in our lives. TV.tv will engage in
dialogue with Canadians about media literacy, tackling some tough issues:
violence, television addiction, and children and television.
7593 Thirdly, TV.tv will offer a user-friendly
program guide, searchable by every category imaginable, so that viewers can make
informed choices in the 500 channel universe.
7594 How does it work?
7595 TV.tv will offer original programming in a new
format; kind of a three-dimensional specialty channel. Shows will run from 5 to
20 minutes, with behind the scenes stories, outtakes, interviews and other
angles that give viewers insight into the show behind the show. Scheduling would
be designed to maximize exposure before the airing of an upcoming
7596 We also realize that viewers need information
repeated often, tuning in for short periods of time.
7597 The benefits of the service will be many,
including: emphasizing Canadian priority programming from all sources;
commissioning and acquiring the majority of TV.tv programming from independent
producers -- stories, interviews, background pieces, trailers; accepting
promotional material about Canadian television from all Canadian broadcasters at
no charge to the producer or broadcaster; showcasing the work of Canadian
broadcasting organizations like the Canadian Broadcast Standards Council, the
Media Awareness Network and the Canadian Television Fund. And finally, bringing
the next generation of viewers to Canadian fare first. In our research, people
18 to 29 led the pack in declaring their interest in this service. Eighty-five
per cent of them found the idea appealing.
7598 The TV.tv day will be divided into program
strands with specific audiences in mind.
7599 At the start of the day "ParentsChoice.tv"
will help parents gain insight into the upcoming week, with segments like
"Critic's Choice", reviewing the best in children's television, and "Best of the
Medium", offering the latest in media literacy issues.
7600 In the evening, "Cdnites.tv" will make
priority programming a real priority. "Dramatically Canadian", for example, will
showcase Canadian dramatic production, what is in production, what is coming up
and what is winning awards. And "Cancom" will prove once and for all that
Canadians are truly funny.
7601 TV.tv will always display the latest local
channel line-up. When viewer's click through to their choice of programming,
Canadian choices will always appear first.
7602 With the power of the next generation of
set-top boxes, Canadian viewers will be able to click to find their favourite
actors, directors, themes and episodes, and for local and national
7603 They will be able to offer their views on the
programs available on-line and, eventually, on screen.
7604 Further options will include searching
according to language, AGVOT ratings and captioning.
7605 CTV is stubbornly determined to put Canadian
choices first in the digital environment. Ultimately, it will help pave the way
to making Canadian programming on all services more attractive to viewers and,
therefore, more attractive to produce and broadcast.
7606 With 50 per cent original content, CTV will
promote the Canadian broadcasting system by celebrating the creative forces that
make it happen. There isn't another service out there like this, with benefits
this broad and far-reaching. And it is 90 per cent Canadian content for only 5
cents -- a digital bargain.
7607 TV.tv is an ambitious undertaking with a very
simple goal. At the heart of it all, we want to give Canadian programs pride of
place within our increasingly competitive and cluttered broadcast system,
showcasing with equal emphasis programming from across Canadian broadcast
7608 MS McQUEEN: Commissioners, Ed Robinson
launched the Comedy Network, so you can blame him for Mike Bullard, Carla
Collins and Tom Green. When he launches the surprising Talk TV this fall, you
will have a lot more to blame him for. But today we would like to blame him for
--- Laughter / Rires
7609 MR. ROBINSON: Good morning, Madam Chair. Good
morning, Commissioners. As a man I feel like I should have a remote control in
my hand so that I could say "Let's role tape on MEN".
--- Video Presentation / Présentation vidéo
7610 MR. ROBINSON: Despite what men would have you
believe, we don't know everything. Here are some of the things that men wonder
7611 What is the material of those shirts that I
don't have to iron?
7612 How do I start my stock
7613 Where can I find the woman of my
7614 Should I consider an electric car as my next
7615 And what is egg plant and what do I do with it
7616 The Men's Entertainment Network is designed to
provide help in answering these and many more questions. We will offer advice on
relationships: relationships with your spouse, with your children, with your
parents. We will delve into lifestyles in urban Canada, in rural Canada and our
diverse cultures across the nation. And fitness tips, like how to find those
washboard abs and lose those love handles in the process? We will offer career
advice, like approaching your boss for a raise, or changing careers, which might
actually be connected. And certainly MEN will be a place for the joy of
7617 Our vision is a network that engages and
informs, dedicated to entertainment and topics of interest to men. The magazine
industry is already tapping into this market. On any newsstand today, you are
bound to find a variety of magazines dedicated to men's interest and we believe
that there is an equivalent demand in television for a men's specialty
7618 Our research has shown that nearly 8 in 10
found the proposed service appealing. Focus group participants described it as
"the ultimate channel" and "one stop shopping for what men are looking for".
Participants saw it as a "real life" channel.
7619 Here are the highlights of this
7620 MEN will launch with 42.5 per cent Canadian
content in year 1, rising to 60 per cent in the last two years of the licence
7621 MEN will spend $2.5 million on Canadian
programming in its first year and over $20 million over the licence
7622 MEN will make a strong commitment to the
independent sector, commissioning at least half of its original programming from
Canadian independent producers.
7623 And the low wholesale rate of 20 cent will
make MEN an attractive hub for any digital package, with a skew to the adult
7624 The combination of entertainment and
information is key in driving digital.
7625 So what's on this service?
7626 MEN will address the interests and concerns of
men of all ages and ethnic backgrounds, from aboriginal Canadians to
7627 The programming diversity will be a strong
feature of our flagship show entitled, "For Men Only". This is a magazine show
with an interactive talk component. It will be a place to share anecdotes,
advice, ideas, jokes, knowledge. "For Men Only" symbolizes what MEN is intended
to be: a community for men to find the information they need and a place to
gather and exchange ideas and opinions and to communicate with each
7628 "Man, Sex and Society" will be a signature
series for MEN, a one-hour exploration of man's role in Canadian society. For
example, "First Generation Canada" will look at the issues facing immigrant men
new to Canada; and "Rights of Passage" is a program that explores the cultural
differences of men across the globe.
7629 MEN will have themed program blocks for
appointment viewing, from "Gadgets and Games" to "Consumer Reports" to "how to"
programming, like how to BBQ all year round, how to refinish antique furniture,
how to ask for directions -- well, maybe not how to ask for directions. And
there will be no sports programming on MEN. That's already provided
7630 MEN offers interactivity a reason for
7631 MEN intends to capitalize on the computer and
Internet interests of its audience, as well as the unique programming
opportunities that new technology will offer. At the heart of this strategy is
"men.ca, the men's club". men.ca will be a club with its own privileges,
including a golf club where scores can be registered -- a basic human need
for every golfer.
7632 Over time, viewers will be able to pull up
tickers on demand for sports, for business, find how-to information at the click
of a button, have access to a library of MEN's programming. And what men's
service would be complete without a trivia section, from movies to vintage cars,
to first edition books.
7633 As with all of the CTV applications,
interactivity in the MEN's channel will be an inherent part of the programming
on the screen.
7634 We envision the Men's Entertainment Network as
a virtual club for men, a place for the guys to hang out.
7635 CTV has the experience in information and
entertainment programming to bring this concept to life.
7636 We know the male demographic. We have the
expertise in specialty television.
7637 CTV and its specialties have the track record
in developing quality Canadian programming and building Canadian
7638 And CTV has the commitment and the stamina to
making the new digital frontier a success.
7639 The Men's Entertainment Network will be for
and about men, a community and a gathering place, and with the final word going
to Red Green, "I'm a man...I can change...if I have to, I
7640 MS McQUEEN: Commissioners, our last
application is our Romance Channel, but the "romance" we're talking about is the
romance of the land, it's about the forces that shape our beautiful country and
that shape us, too.
7641 Here's Ken Murphy.
7642 MR. MURPHY: Madam Chair, Commissioners, I'd
like to show you a bit of the Exploration Network. It's going to be a fabulous
--- Video Presentation / Présentation vidéo
7643 MR. MURPHY: In many ways, as Canadians, we
define ourselves by our geography.
7644 From the coureurs de bois, to the railroad
pioneers, to the bush pilots and highway builders of the last century, we have
built a country over some of the most expansive and diverse geography on the
planet, but we have no television service devoted to helping us explore our
nearly infinite geography.
7645 This is the vision of Exploration
7646 To stimulate our sense of wonder about our
land and the people who inhabit it.
7647 To explore the geography of Canada, to explore
our people, our stories and our connection to the land and to each
7648 And Canadians love the idea of watching these
stories unfold and understanding our connection to the land. In fact, over 81
per cent see Exploration Network as appealing.
7649 And let me be clear and direct: Exploration
Network is not a travel service focused on the ways and means of airline,
hotels, resorts, handy hints and the like. Just as there is no mistaking
"Canadian Geographic Magazine" for a travel publication, there will be no such
confusion with Exploration Network.
7650 Exploration Network is firmly rooted in the
science of geography, cartography, anthropology and demographics. We will
combine science with insightful storytelling, large doses of fun, a high degree
of technical innovation and a distinctly Canadian attitude.
7651 We want to build on our strong relationship
with "Canadian Geographic Magazine" and the Royal Canadian Geographical Society,
an institution with over seventy years of experience in making Canada better
known to Canadians and the world.
7652 We want to build on our relationship with the
Canadian Association of Geographers, the Royal Ontario Museum, the Canadian
Space Agency and the Canadian Museum of Nature, to name just a
7653 We want to build on our relationships with
Canada's independent production community, committing at least $1 million per
year fro original documentary programming.
7654 "Exploration Today" will be our daily
flagship, from the team that brought you the first daily science and technology
magazine show in the world, @discovery.ca.
7655 We will track the major expeditions to the
remote regions of Canada and the world.
7656 We will track young voyageurs as they retrace
the steps of their ancestors, making their own connection to this
7657 "Exploration Today" will help us understand
the massive force of a glacier, while examining its microscopic
7658 Our "Canadian Geographic Presents" anthology
will showcase the best in geographic exploration, with critical story
development, promotional and editorial support from the
7659 "Elder Stories" will present legends and
stories from Canada's aboriginal peoples and will be produced in association
with aboriginal broadcasters.
7660 And "Life on the Farm" will bring all
Canadians, but especially urban Canadians, a new appreciation of the bounty and
the challenge of working the land.
7661 The Exploration Network will be intensely
7662 We plan a series of digital and 360-degree
cameras to showcase some of Canada's most beautiful vistas and to allow us to
recapture that serene moment by the wooded stream.
7663 Viewers will help map the Trans-Canada
7664 They'll be able to play along with "The Great
Canadian Geography Challenge" or connect to their local nature club or heritage
7665 Exploration Network is a fresh, unique and
very Canadian idea, meeting all of the criteria for a Category 1 licence. It is
overwhelmingly Canadian, offering 80 per cent Canadian content.
7666 It will add to diversity by focusing on
people, their cultures and their vantage point on this land.
7667 It has a reasonable business plan, with an
affordable wholesale fee of only 15 cents.
7668 We plan a high degree of digital innovation
and Exploration Network will be a natural home for high-definition
7669 It will be built on CTV's regional routes and
will leverage Discovery Channel's documentary excellence and scientific
7670 When combined with our strategic partnerships
with the Royal Canadian Geographical Society and "Canadian Geographic Magazine",
Exploration Network will showcase Canada like never before.
7671 MR. FECAN: And so, in conclusion, digital is
about choice, and I hope you agree that we've provided some very interesting,
fun and worthy Category 1 choices.
7672 We're proud of the support that all of our
services have received, from independent producers and writers, to major
Canadian institutions and associations, to interactive interests. We are
thrilled with the enthusiasm from all sides for our
7673 We would sincerely like to thank all of these
intervenors for their support.
7674 Madam Chair and Commissioners, if we are
licensed, that's just the beginning. Knowledge, expertise, creative skills and
guts are essential to success. And as we've seen in the past, there are,
inevitably, things that don't go as planned. And when the challenges arise, all
of these elements will even be more critical. And that will be doubly true in
the digital world.
7675 MS. McQUEEN: And CTV is up for the
7676 As you heard this morning, we are eager, we
are excited and we have a dazzling array of applications. And viewers loved our
7677 We have gone beyond the Commission's criteria
time and again in our applications with high Canadian programming and
expenditure commitments, low affordable rates, high consumer appeal, programming
and cultural diversity, solid business plans and strong interactive
7678 These will be the best and most attractive
services that digital has to offer.
7679 We also have the greatest team. The best ideas
need the best people. And the people you see here today have the experience and
skills that will make the digital roll-out a success.
7680 We have the recipe for building digital, and,
with your approval, we're ready to go.
7681 And we're even ready to answer your questions.
7682 THE CHAIRPERSON: That is near-perfect timing.
Thank you, Mr. Fecan, Ms McQueen and your team.
7683 Commissioner Demers, please.
7684 COMMISSIONER DEMERS: Good morning, Mr. Fecan,
Ms McQueen and the CTV team.
7685 I will be the one questioning and you will see
that there is some resemblance in the plan I will follow as what you have seen
yesterday from my colleagues.
7686 So I will have general corporate questions,
and then I will have particular questions on each application, and please if I
decide to question you twice on the same application, you tell the Chair to stop
--- Laughter / Rires
7687 So on the general questions, corporate
questions, I will touch the selection criteria, implementation of service,
interactivity, Canadian programming and a question on the DVS.
7688 You have indeed commented this morning on some
of these points, but I would hope you will be able to bring your remarks and add
some comments on these particular points from a perspective of comparison of
7689 So the first item: Selection criteria, and let
me open like my colleagues have. The Commission has indicated certain selection
criteria that it will use to license Category 1 services, especially Canadian
programming, exhibition levels, amount of original production, Canadian program
expenditures, contribution to program diversity, attractiveness and demand for
the programming genre, and use of interactivity.
7690 My question is: What criteria do you think are
most important in licensing Category 1 services?
7691 MS McQUEEN: Well, we have spent a lot of time,
Commissioner, studying the criteria and thinking about that because obviously we
want this to work and we have, I guess, emphasized two of the criteria in which
we package some of the things that you have said, and for us the fundamental
thing is attractiveness to audiences.
7692 It may be obvious, but that is obviously what
will make people subscribe to digital, is if they find a package of services
that they like.
7693 I guess here is how we think we can make the
services attractive and fulfil our fundamental objectives.
7694 We think that there needs to be a high dollar
commitment to Canadian programming because we believe that that will produce the
original "never seen anywhere before" content that will make these services
attractive and not just more of the same thing.
7695 We have done a thorough job on market research
and we think that is very important in selecting a channel, and I would like
perhaps when it is convenient for you, Commissioner, to really explain how we
did our market research because there is some elements of it that you may be
interested in hearing.
7696 Lastly, and very important, we think that low
subscriber fees are important. We have all been through the scars of price
objections for cable services, and we don't want to go there again. We think
that low subscriber fees are an essential component in this overall rubric of
7697 And I guess the second fundamental for us is
doability. I mean, we have, we think, great ideas, but between the idea and
on-screen there is a lot of work, and I guess under doability the factors that
we see are reasonable business plans. And when we say "reasonable", we mean that
the assumptions that we have used for revenues seem to be grounded in some sort
of logic, that the expectation of costs have also an experience behind them, and
I guess finally that we are willing to wait for profitability.
7698 I think that is important, that we can't
expect that these channels are going to contribute hugely to our profitability
7699 I guess the last thing we really believe is
that in the doability factors you have to look very carefully at the team that
has been assembled and decide whether they have the track record, the
infrastructure and the skills to bring these things to reality.
7700 So those are two fundamentals. Are these
services attractive to audiences and can they be brought to the screen and kept
on the screen successfully? And if you want a tie-breaker, we would suggest
7701 COMMISSIONER DEMERS: Diversity, where would
you put diversity in your approach?
7702 MS McQUEEN: I think we think diversity comes
with the high Canadian content expenditure. Obviously, that will allow for a
regional programming, and I guess having programs that haven't been seen before
is a key element of diversity.
7703 If we are talking about the notion of cultural
diversity, for example, each one of our applications does have specific cultural
reflection and is designed to do that from, for example, Elder Stories on the
Geography Channel to the Health Channel's wish to explore different kinds of
medicine, non-traditional forms of medicine.
7704 We have been specific in suggesting cultural
reflection as an important part of the diversity of our
7705 COMMISSIONER DEMERS: Probably at the bottom of
your answers was original production, but would you have particular comments on
7706 MS McQUEEN: For these channels with their
limited revenues, original production is not an easy thing to deliver.
Nevertheless, we put our minds to it and each one of our channels has made
commitments to original production and they range from 90 hours for the most
difficult genre, which is the drama kind of programming that will be done on
Shadow Television, to over 750 hours on the Men's Channel, and each of our
channels does have a specific, and we believe large for the genre, contribution
to original programming.
7707 I think it is in the application, but I do
have a handy-dandy run down of what the contribution is from each service, if
you would like that specifically.
7708 COMMISSIONER DEMERS: Well, the questions at
this point were more of a general nature and as to a criteria that the
Commission could use, would use, when studying all the applications and
7709 Exhibition levels, have you any particular
comments on them?
7710 MS McQUEEN: We think that our exhibition
levels are really among the highest that you will see in all the applications in
front of you. They range from -- let me see here -- I think really the
lowest is 60 per cent and the highest is 90 per cent. So each channel does make
a very significant exhibition level commitment.
7711 Generally, it is around the 70 per cent level,
but in many of our cases it is, in fact, higher than 70 per
7712 COMMISSIONER DEMERS: Thank
7713 Maybe one point that you have enhanced you
would be ready to comment was on the market research. Certainly at this point,
it would be interesting to hear some general comments on your market research
and points that could apply to all applications or many of them.
7714 MS McQUEEN: Yes, I often think that you must
get a little bit cynical about market research because you have so many studies
in front of you which prove that the Explosion Channel will be -- everybody
will be willing to pay $20.00 a month for the Explosion Channel.
--- Laughter / Rires
7715 But, in fact, we love science and market
research is a science and Kathie Macmillan of Goldfarb is one of the preeminent
scientists in this subject.
7716 Kathie, could you explain the research that we
7717 MS MACMILLAN: Thank you, Trina.
7718 The challenge that we had was to support
interest and demand in all the genres and the approach we took was a combination
of qualitative as well as quantitative research.
7719 The quantitative research typically provides
non only empirical data from which you can form your recommendations, but with
the qualitative with it you also get the context in which to consider the
recommendations. So you get to find out and drill a little deeper in terms of
what people are really feeling inside.
7720 With CTV, we used a national sample of 3,000
respondents. Now, because we had many genres that we were testing, we actually
put the five permutation of the survey together so we could ensure respondents
would provide the detail of only three genres, yet ensuring each concept had a
very robust English-Canadian sample size of at least 1,200.
7721 The concepts were rotated so you remove any
bias from that way. The questionnaire was less than 20 minutes which also is
very important because you get fatigue from the respondent otherwise, and
rotating the concepts evaluated in each of the five permutations also increases
the statistical reliability of the data for each of the network
7722 The aggregate sample of 3,000 has a margin of
error of plus or minus 1.78 per cent, 19 times out of 20, which means it is
pretty darn close to being the hard number, and the margin of error per channel
is approximately 2.8 per cent, again 19 times out of 20.
7723 We used fairly descriptive concept statements
because we now based on the hundreds of surveys and qualitative concept
evaluations that we have completed that increasing the detail and description
provided clearly increases the understanding on the part of the respondent and
also, therefore, allows them to make a more critical decision: "Do I really like
it? Do I like it a little bit?".
7724 We also use a ten-point scale and of all the
research submissions we are the only one in there with a ten-point scale, the
reason being again it provides for a much finer granulation on the part of the
respondent to say, "How do I really feel about this?" and in the reports we have
given you the summary of those who gave very, very strong endorsement and those
that give also positive interest as well as those who give negative
7725 With the marriage of both the qualitative as
well as the quantitative we were also able to understand at what level is that
positive interest because we were reading out a statement for a concept which is
highly visual in nature and also requires people to think to the future on some
of the interactive components.
7726 So I would say the Commission wanted proof of
demand of Canadian relevance, of viewership interest and in each of the genres
we have provided you with the data to support those.
7727 MS McQUEEN: Commissioner, the results that
came out of this elaborate, and fairly costly, bit of research show that each
one of the services has positive interest of above 70 per cent and the leaders,
I would just like to read you, are Exploration with an 81 per cent approval
rating, Health with an 84 per cent positive interest, and Shadow with an 86 per
cent positive interest.
7728 But in no case did less than three quarters of
the respondents expressed a positive interest in these channels and I should say
that they were also questioned -- I am not sure whether you mentioned
this -- on pricing to make sure that they weren't just thinking that they
wouldn't have to pay anything for these channels.
7729 COMMISSIONER DEMERS: Thank you. So as to
criteria, attractiveness and doability would be the two main ones that you have
7730 MS McQUEEN: They would be, but I can feel from
the rear seats --
--- Laughter / Rires
7731 -- and as a journalist I must earnestly
apologize that in fact the leaders in this audience research were, of course,
the regional news channels which scored at a level of about 90 per cent. So I
apologize to my colleagues.
7732 MR. FECAN: I would add that the attractiveness
of the service -- you know, I mean, people watch programs.
7733 So, you know, for me, my bias as a programmer
comes out, so what else would you expect me to say. But I also believe it to be
true, happily, in this circumstance.
--- Laughter / Rires
7734 MR. FECAN: But I would consider that
interactivity is part of the program. I mean, I understand it's a separate
category that you are looking at, but the way we look at interactivity is that
it's not some sort of techie add-on. It is baked right into the show and it is
part of the creation of the show.
7735 So when we talk about interactivity, it is
also part of the attractiveness of the program. It's not some sort of thing
that's added in the assembly line after the show gets made. It's thought through
in the creative process, and we think that the most compelling forms of
interactivity will be something that's developed right when the program is
developed and not just kind of added on later.
7736 So we don't mean to diminish that. We just
kind of assume that that's done when the show is developed.
7737 COMMISSIONER DEMERS: Thank
7738 I will pass on to another point, which is the
implementation of services.
7739 Should the Commission impose a minimum amount
of time by which the Category 1 licensee must implement its
7740 MS McQUEEN: We believe that it is very
important, Commissioner, to have a common launch of services, absolutely. As to
the imposition of a time limit for licences, it seems on the surface a
reasonable thing for the Commission to accept. One always is concerned that a
Draconian measure like removal of a licence should have some process attached to
it, so there may be --
7741 THE CHAIRPERSON: He has lots of experience
7742 MS McQUEEN: With Draconian.
--- Laughter / Rires
7743 MS McQUEEN: So you could think a process up
7744 But we are absolutely committed to making
digital work. We believe that in order to make digital work, one of the things
is that we roll out the most attractive, interesting set of services, including
perhaps from the eligible list, and if I may break the Chair's rule, the
Category 2 services, and that that should be a spectacular rollout at one given
7745 COMMISSIONER DEMERS: Thank
7746 Yesterday, the date of September 1, 2001, was
put on the table. Do you have comments on that date?
7747 MS McQUEEN: A number of our services think
they could be ready earlier than that, but we will wait and hang around, let
everybody catch up, and we certainly can be ready to go by September the
7748 COMMISSIONER DEMERS: Thank
7749 You have just touched on Category 2, I think.
Should there be some time frame? Do you have comments on a time frame for
7750 MS McQUEEN: I think it's important that the
rollout of this package be, and we have set that up as one of the fundamental
things, affordable, so I think that should be a consideration in the launch of
all these services. It's hard for us to give you completely helpful advice,
although we are trying our best, because of not completely understanding
everything that might be in the rolled out package.
7751 But certainly our belief is the most
attractive, most affordable package should go forward on September the 1st, if
that's the right date.
7752 COMMISSIONER DEMERS: Thank
7753 Then I get to interactivity. You were
certainly here yesterday for some part of our discussion. You have proposed and
described this morning through a video what interactivity was. You have proposed
services involving interactivity via the set-top box. If a CRTC licence is a
Category 1 service with interactive elements via the set-top box, do you think
distributors should be obliged to carry those interactive
7754 MS McQUEEN: I think Ivan really -- what is it
-- foreshadowed, I guess, is the dramatic word, foreshadowed the answer to
7755 I would like Ken Murphy to talk a little bit
about that. Than maybe, Ivan, you could add some thoughts.
7756 MR. MURPHY: Picking up on Ivan's point that
interactive content in digital programming is inherently created as part of the
development of the program, we think that the two in so many ways are
inseparable. Accordingly, it's part of the value proposition for the
7757 The notion that somehow the two are separable
on either a technological or business grounds is perplexing to us, especially
when you consider, for instance, that most set-top boxes today allow Canadians
to flip to Web pages, foreign Web pages, in many cases. There has never been any
suggestion that somehow these would, in any way, be restricted.
7758 So, once again, I think the notion that the
Canadian digital content, that's an inherent part of a programming service,
could somehow be restricted is confusing to us.
7759 MR. FECAN: So the direct answer would be we
would think that every distributor should carry the interactive
7760 COMMISSIONER DEMERS: In the video, you have
described what is happening as to interactivity on some of your actual specialty
7761 Could you or could one of your team review
that, in order -- you were there yesterday, so that you could take us from
either what we have heard yesterday and compare it to what you are doing or just
describe in more detail what is happening right now? I understand that is what
you intend to use in the new services.
7762 MS McQUEEN: Ken, if you could talk about that
a little bit in the context of the discovery issues, especially the set-top
7763 Then, Bob, perhaps you could talk a little bit
of the launching of ctvnews.com of examples of that.
7764 COMMISSIONER DEMERS: Yes. You can start where
we are -- where you are.
7765 MR. MURPHY: I'm going to start with a comment
that I had to promise my colleagues not to wave my arms and get too animated
because frankly it's such an exciting time. For the last five years we have been
focused on Internet content development and we are right at the verge of being
able to truly bring these two program streams together in an elegant and
intuitive way for viewers.
7766 Let me tell you a little bit about where I
think we are.
7767 We have over 1 million set-top boxes in the
filed today. Virtually all of those set-top boxes have modems and have
capability to access Web content, IP or Internet protocol content. We are going
to, through our lab -- we have a lab back at our facility where we haver
virtually all of the set tops we can get our hands on, and we are truly bringing
now the interactive formerly Internet and television programming
7768 It's working. What has to happen is we need
advance set-top boxes deployed. I think I would agree with most of the forecasts
that I heard yesterday, that we are 12 perhaps 14 months away from seeing
advanced set tops actively deployed; and, clearly, we are going to see, over the
coming years, improvements and new generations of boxes. That will, I think, be
a part of the digital landscape for years to come, much as it has been part of
the Internet landscape where PCs have various ranges of capabilities and so
7769 But the boxes are out there now. They can
access our digital content today. And tomorrow, a year or so, 16 months from
now, they will be able to do so via the set-top box in an integrated and
7770 MR. HURST: On the news side, in a few weeks,
in September, we are going to be launching ctvnews.com, which is a Web-based
product which we describe as the next generation of delivery of news over the
Internet. We use the words "next generation" because it is real moving, real
streaming video, plus the ability to select stories that may have happened five
minutes ago or 10 minutes ago from a menu.
7771 It is, in many ways, giving news consumers the
ability to set their own, what we call in the newsrooms, their own line-ups. If
they want more, for example, on -- now this is at a national service at this
point -- if they want more on that terrible situation going on in the bottom of
the Barents Sea with the Russian submarine and efforts to go and rescue those
people or if they want more on the difficult situation right now with the
Miramichi over the lobster fishery.
7772 If they missed it, they can set their own
7773 So this is a product, ctvnews.com, that we are
launching in September: real streaming video and selectability.
7774 In terms, Commissioner, of your question about
where are we now, I was struck yesterday by a discussion about the cameras on
top of the PCs. I think that somebody described it as "What is that golf ball
thing and when will we be able to use it on the Webcam System?"
7775 We are using now at CTV News, every single
day, this Webcam network, with individuals who have the funny little golf ball
camera on top of their PCs connected to various systems. We are using that every
day to talk across this web system.
7776 Just summing up briefly, we in the news
division are programmers. Interactivity to us -- essentially it is what we
do: go out and interact with the community. We are not technicians, but we want
to seize every opportunity to employ these technical facilities, and that is
where we are right now in the news division.
7777 MR. FECAN: While that is a web-based product,
clearly because there are very few interactive boxes out there, this is our kind
of idea that first we will get the product up and running, and when the boxes
come it becomes an interactive television product as well.
7778 So we are in there developing this content
7779 MS McQUEEN: There is another fundamental kind
of interactivity that I think is a revolution here. Television has always been
an uneasy alliance between, on the one hand, engineers and, on the other hand,
journalists and artists: two groups of people who are profoundly bored by each
--- Laughter / Rires
7780 MS McQUEEN: The difference this time is that
we are not bored by each other. Engineering has become exciting to the creative
side. And vice versa, engineers themselves are being inspired by the ability to
7781 So, to me, this real interaction between
technology and creativity is the revolutionary part of this -- the exciting
part of this -- and we see that, for once, it is creativity that is truly
driving a technology. The result will be things that people will actually enjoy
and use to enhance their lives and satisfy their curiosity. Whether it is the
men's club, where they really do create an on-line kind of community, to
critical services such as the news people are developing, for instance, on the
meningitis epidemic, or the ability to talk with your remote control to a doctor
and discuss the symptoms that your child might be having, all of these things
will really mean that people, instead of watching television, will actually be
doing television themselves.
7782 Excuse us for perhaps being excited, but we do
see this as a wonderful platform, and one of the things that is really going to
drive the digital world, and we are committed to making it work.
7783 COMMISSIONER DEMERS: Could it be said that if
you were licensed and when it is the 1st of September 2001 that you may have
programs, but the infrastructure or the technical applications may not be in
place at that time -- at the exact time?
7784 MS McQUEEN: Yes. We anticipate that we will
launch, as Mr. Murphy said, first with web-based products and the very first
generation of Internet set-top boxes, but very soon after that -- and
we are talking months after that -- we will see true interactivity in
7785 MR. MURPHY: Part of the problem with getting
set-top boxes out there -- advanced set-top boxes -- is that, in fact,
so far it has been driven by bits and bytes and a better picture quality and
this sort of thing. Really what is going to drive demand, which ultimately will
drive the manufacturers and the standards setting processes for software
standards and so forth, is consumer demand, and that will come from the kind of
exciting and dynamic Canadian programming that we are describing here
7786 That is what is going to accelerate the
roll-out more than anything else. We heard that repeatedly yesterday. We see
that reflected in the CCTA and the Cable Lab reports as well.
7787 We think there is a growing consensus that
ultimately the boxes will follow consumer demand, and consumer demand will be
driven by programming.
7788 COMMISSIONER DEMERS: Thank you. In the same
way, but on a different point, the Personal Information Protection and
Electronic Documents Act will come into force in January. Have you taken
measures to ensure compliance with this legislation as it relates to the
components of services you have proposed, where the exchange, transmission,
gathering and display of personal information takes place?
7789 MS McQUEEN: We will comply with every aspect
of that law. More than that, it is our personal commitment that we will pay
attention to privacy concerns at all times in each one of these
7790 COMMISSIONER DEMERS: Thank you. Canadian
programming expenditures -- and, again, this is a general question which
does not relate particularly to any application.
7791 Given the competitive operating environment
the new services will be operating in, and the uncertainty relating to the
digital distribution and requirements related to minimum Canadian content
levels, is a condition of licence requiring minimum levels of annual Canadian
programming expenditures necessary for digital services?
7792 MS McQUEEN: For us it is not necessary because
we are going to do it anyway, but we would willingly accept a condition of
7793 COMMISSIONER DEMERS: That is a good
--- Laughter / Rires
7794 MS McQUEEN: A high compliment. Thank
7795 I hope that is not the first good answer.
--- Laughter / Rires
7796 COMMISSIONER DEMERS: There was discussion
yesterday on these points, and I am sure you have heard the fact that in
competitive applications it is an important point, and the fact that we will
have digital is a fact, that there is Canadian programming that should be aired
on digital frequencies -- specialties. The Commission's proposed condition
of expenditure used an overall average -- and you will have heard that
question before -- from a seven year projection to calculate the annual
spending percentage. There were concerns expressed from some applicants on this
approach, given the lack of flexibility it provides.
7797 If the Commission's calculation of the
percentage remained the same but compliance was based over the entire licence
term, as opposed to annually, would this alleviate the concern, do you
7798 MS McQUEEN: In our reply, Commissioner, on
this aspect we did suggest a couple of alternatives to the statement that was
given, but I know that the Commission has itself suggested a number of
alternatives and I would wonder if Kathie Robinson or Elizabeth Duffy-MacLean
would like to comment on those.
7799 MS ROBINSON: Yes. The Commission invited
comments on alternatives, and in our filing we suggested a couple of
alternatives that might be worthy of your consideration. Yesterday there was
another alternative that was discussed.
7800 I think I might turn it over to Nikki Moffat,
if it is appropriate to comment on the individual suggestions. But at the end of
the day CTV's position on the record is that it was satisfied with the condition
that the Commission had originally proposed.
7801 Obviously, measures which increase flexibility
are always welcome, but we wouldn't take that to the level of saying that we had
concerns. We appreciate the environment that the Commission has put forward, in
terms of working together for things that work and coming up with the best
7802 So perhaps I might, with your permission,
Commissioner, turn it to Nikki Moffat to comment, if you wish, on the individual
7803 MS MOFFAT: Thank you, Kathie.
7804 We put forward two recommendations with the
Commission. One of the methods we propose is a calculation based on total
programming expenses for the years 3 to 7 and expressed as a percentage of
revenues during the same period.
7805 The other alternative we have put forward is
one where the starting point for the calculation was at the break-even EBITDA
level. And, again, it would be a minimum...no-minimum requirement in the first
year of the licence, but the condition would apply for the second year,
7806 And we listened to another recommendation put
forward yesterday by the Commission, where you would request averaging the
percentage over the licensed term, and we would also welcome that
recommendation, as well.
7807 MS McQUEEN: And I should say, Commissioner,
that all of these flexibility provisions still leave a very high level of
Canadian expenditure. For instance, in the Health Channel, the application, if
taken on the first blush, would be a 72 per cent expenditure on Canadian
content, which is pretty breath-taking.
7808 If you did it some of the other ways that have
suggested, it still is a very high level of around 60 per cent. But we
appreciated the Chairperson's desire to make this work and not kind of line us
up and have us say, "Yes." But we do say, "Yes."
--- Laughter / Rires
7809 MS McQUEEN: We do say "Yes," as we have said
on the record with you, but certainly the proposal that you've put forward is
very satisfactory to us.
7810 COMMISSIONER DEMERS: Thank
7811 A more general question on another aspect, the
DVS. Will your proposed service or services be technically equipped to allow for
the broadcast of descriptive video?
7812 MS McQUEEN: Could I ask Elizabeth
Duffy-MacLean to take the descriptive video.
7813 MS DUFFY-MACLEAN: Good morning,
7814 Commissioner Demers, perhaps we're somewhat
optimistic, but we're certainly sincere about DVS.
7815 And just before I get to your technical issue,
I think what we've really looked at is committing to acquire the rights,
wherever possible. And part of that might come from the U.S. requirement to air
descriptive video on the conventional networks.
7816 And I think I might ask Ken Murphy if there
are any details on the technical aspects of DVS to add to that.
7817 MR. MURPHY: Well, I think the entire Canadian,
and indeed international industry, is looking for standards and an elegant
approach to descriptive video. And we're part of that process, but there's
nothing inherently preventing, on a technological level, from us carrying
descriptive video. So there's no magic to the fact that we're digital that would
prevent that from happening.
7818 COMMISSIONER DEMERS: Thank
7819 Madam Chair, this would be the end of my
general questions. Maybe I have colleagues. It's not a monopoly. So would you
want I offer my colleagues some...?
7820 THE CHAIRPERSON: Yes. And once we complete
this, it may be a good time to give you a break.
7821 On the question of CPE, as the hearing
progresses and applicants may become more recalcitrant and insist on their plan
for CPE, do you see a need for whatever it is that is found appropriate by the
Commission to be applied equally to everyone, based on the numbers that were put
7822 MS McQUEEN: Yes, we do.
7823 COMMISSIONER WILSON: I just have a couple of
questions. The first one, I'd like to ask Ken Murphy a question about the
7824 And we had a discussion yesterday about
whether or not and how much additional bandwidth would be required in order to
provide the kinds of interactive elements that you're talking
7825 MR. MURPHY: Well, there's really no one
7826 COMMISSIONER WILSON: But would it double the
amount of bandwidth? For example, would you need an entirely additional
7827 MR. MURPHY: No, not at all.
7828 COMMISSIONER WILSON: Not at
7829 MR. MURPHY: Not at all.
7830 I think for some of our more ambitious
interactive features, like segments on demand, that we clearly see down the
road, those will have greater bandwidth requirements. But some of the Internet
protocol, some of the digital on-screen features and so forth, are in fact very
humble in their bandwidth requirements, especially when you contrast that with
the consumer value and the viewer value that that brings.
7831 COMMISSIONER WILSON: So when we're talking
about whether or not we should be requiring distributors to make the interactive
elements available as part of the service, you're not really...I mean, there are
still some capacity issues with digital because of the speed at which it's
rolling out and the different ways in which the cable companies, in particular,
are developing their digital offerings. So in the initial stages you wouldn't
have any major concerns about how much capacity or additional bandwidth might be
required in order to offer the interactive elements that you have planned for
7832 MR. MURPHY: Well, bandwidth will never be
infinite. There will always be limitations. But I think the real issue is not a
technological one, so much as a balancing act.
7833 Ultimately, these services have to provide
Canadian viewers with something they can't get elsewhere. We have talked a lot
about the attractiveness of new, innovative digital features that really mean
something to people, and I would suggest that the real issue is, in the face of
limited bandwidth, how that bandwidth will be allocated. And I think it a
strange notion that somehow we're going to drive digital programming services,
which in turn drive demand for the boxes, enabling a whole new range of
businesses for the distributors by limiting the very innovation that's an
inherent part of the new digital services.
7834 COMMISSIONER WILSON: To make it
7835 MR. MURPHY: I just don't understand the
7836 So I think it's much more: sure, there are
bandwidth limitations, but let's focus then on what services are brought to the
market and make sure that they are as exciting and innovative as
7837 COMMISSIONER WILSON: And are you looking at
the interactive elements of your services as potentially revenue generators? Or
are they simply to increase the attractiveness of the service, in terms of
7838 MR. MURPHY: Well, we have a lot of experience
-- over five years -- in developing business models and revenue models around
our Internet programming, and we would expect there would be some similar
opportunities around our digital features.
7839 However, I think the e-commerce component of
that will be very modest for quite some time because so much has to happen for
that to become mature and robust, not only with distributors and programmers,
but indeed with retailers and banking services and so forth, and that is going
to take years to fall into place.
7840 MS McQUEEN: Commissioner, let me just say that
interactive revenue is very definitely a substantial part of our business plan,
and I think it has to be with these channels. They are not going to be able to
have the subscriber revenue if they are to be affordable. There will be great
competition for advertising revenue in order to do the kind of Canadian
programming that will drive digital. We have to look at that kind of revenue
7841 But it shouldn't be a big problem because
these are the services that will enhance digital, both the distributors and the
program services have equal interest in that. So we should be able, with
goodwill -- and there is goodwill on both sides -- to figure out a way
to do this.
7842 COMMISSIONER WILSON: Okay. I just have one
other quick question, Ms McQueen and Mr. Fecan. It seems to me that in sort of
developing the attractiveness of your services that you have really put the
focus on Canadian content in a very significant way, and I am just wondering
what your opinion is.
7843 I remember when I was thinking about the whole
idea of the digital universe and there was a lot of talk about what kinds of
programming we would ultimately see there and talk about whether or not there
would be a lot of original programming or if there would be a lot of repurposed
programming, programming that came from somewhere else and was just all brought
together in thematic packages to create a niche channel.
7844 I am just wondering what your views is of
channels that do that latter thing. I mean, you have clearly in your strategy
taken this one approach where you are saying, "We are going to put the focus on
creating new" and Michael MacMillan from Atlantis Alliance said the same thing
yesterday. You have to develop something that is going to draw people to pay for
those boxes besides the electronic program guide.
7845 What is your view on the channels that sort of
pull together a whole bunch of mystery programming that has already been on
television, but brings it all together in one place where people can find those
7846 MS McQUEEN: Commissioner Wilson, I think that
that is a very valuable service and it really is in harmony with the idea of
digital which is the reliability of turning on a channel and knowing it is going
to deliver a very focused service, whether it is in a mystery genre or a new
genre or a men's genre. In fact, that is the whole approach. Men's television is
to gather a wide variety of formats and direct it at a single kind of community
at that time.
7847 So yes, those services are valuable and we are
looking at a number of them as Category 2 services. Our feeling on Category 1
services is that because they are being given a sort of privilege by the
carriage requirement, that the original programming was the contribution to the
system that you make with the Category 1 service.
7848 COMMISSIONER WILSON: The quid pro
7849 MR. FECAN: But you know it is a balance and
while you pose the question of original versus repurposing, I think both have
their place, but I think both should be in any specialty service. When you think
of our experience with specialty channels, it is original content that has
really helped each one of our various channels find a name, get brand
recognition, make a connection with the viewer. But the nature of the fragility
of particularly a digital specialty channel means that you can't have original
all the time so you have to have like content, repurposed content, if you will,
7850 I think it is a mistake if you just really
have repurpose and I think the more original you can possibly make work through
leveraging your advantages or anything else, the better for the system and for
the viewers. I think that -- you know, when you think of the channels that
have come before this round, the ones that stand out seem to have branded
original programming that people couldn't get somewhere else and I think that is
why this is really important as part of the marketing thing.
7851 In a way, what we are all doing here is trying
to make attractive the sale of these boxes so that more content, more voices,
more diversity, more of a lot of stuff can happen in our country. I think in
that respect interactivity and originality in content, I think, are strong
marketing drivers, and also discreetness of genres so that people get it
relatively quickly what it is the thing that you are proposing that they pay 20
7852 MS McQUEEN: The interesting thing about
repurposing is that sometimes it can be original because of the "getting it"
concept. For example, on Discovery that channel does a lot of forensic
programming that relates to mystery services, but if your concept of Discovery
is kind of science and technology and you are a mystery fan you might never look
at Discovery. Horrible thought!
--- Laughter / Rires
7853 But you might not. However, if you put those
programs on a mystery channel where they fit and everybody gets it, it
introduces new audiences to that kind of programming.
7854 COMMISSIONER WILSON: Thank you for your
thoughts on that.
7855 THE CHAIRPERSON: Counsel?
7856 MR. STEWART: Thank you, Madam
7857 You have referred to the role of independent
producers in your presentation today, in your applications, and have you got a
definition of an independent producer that you would like to suggest to the
Commission that it may wish to use?
7858 MS McQUEEN: Yes, we do, and I would ask Ms
Robinson to propose that to you.
7859 MS ROBINSON: I might start with the legal part
of the description and then perhaps I could turn it back to Ivan or to Trina for
the rationale underlying that.
7860 When we considered the issue of independent
production, we understand the Commission's needs to have some definitions that
are workable and as we looked at this issue, one of the things that we felt that
it was important in the definition of independent production company not to
define it in such a way that an investor in a production company would be
precluded from having the ordinary protections that would be afforded to a
minority shareholder with a signification interest and those protections we find
in the provisions of the Canada Business Corporations Act which give minority
shareholders the right to block the passing of a special resolution and the
reason we focused on a special resolution is because it is a special resolution
that can alter the fundamental capital structure of a company which can change
the business and those are the sorts of fundamental changes that we feel would
be inappropriate to be made where a minority shareholder has a substantial
7861 It is at the level of 33.4 per cent that a
minority shareholder can block the passage of a special resolution. So the
definition which we are putting forward for your consideration is that an
independent production company be defined in which -- let's substitute CTV
because that's the company we are talking about there -- where CTV owns or
controls directly or indirectly less than 34 per cent of the voting
7862 So we felt that that was an appropriate
balance between -- as a suggestion for your consideration that that would be an
appropriate balance between the needs of -- defining "independent" but doing it
in such a way that typical protections that would be afforded to minority
shareholders with a substantial interest would not be prejudiced. Perhaps I
might just turn to Ivan or to Trina to comment further on the rationale, with
7863 MR. FECAN: In practical terms, you know, at an
operating level, the difference between 30 and 34 is negligible -- neither
controls an independent producer. But, as Kathie has pointed out, there are
extraordinary things that can happen, and as a minority shareholder we would
just want the normal kind of capital protection, you know, that we don't get
squeezed out, that shares aren't issued without us having some ability to say
something about it. These are fundamental changes to the capital structure of
the business rather than anything to do with the ongoing operation of the
7864 So while on an operational basis I don't think
there is really a substantial difference between 30 and 34, on a security of
investment basis, on the security of your capital basis, I think it perhaps
makes a slightly healthier case for investment in a company that engages in
independent production. So that is why we would put that 34 per cent definition
7865 MS ROBINSON: And the specific list of
protections that we think are appropriate are found in section 173 of the Canada
Business Corporation Act, and that was the section that we were focusing at in
arriving at our suggestion on this issue.
7866 MR. STEWART: Thank you.
7867 The actual definition that you would suggest
to the Commission is sort of the simple one that you have just relayed, and the
reference to the Canada Business Corporation Act, is that for sort of an
explanation? I mean, if there is going to be a longer definition, I think it
would be helpful if you could file it in writing. Perhaps the best thing would
be if you could file just your definition in writing for the benefit of the
Commission and the public file.
7868 MS ROBINSON: We think the simple definition
that we suggested embraces the provisions of the Canada Business Corporations
Act, and that would be specifically, then, an independent production company for
these purposes, be defined as a production company of which CTV owns or
controls, directly or indirectly, less than 34 per cent of the voting
7869 MR. STEWART: That's the
7870 MS ROBINSON: That's the definition that we are
7871 MR. STEWART: If the Commission were to go for
30 per cent, and I appreciate what Mr. Fecan has said, would that, in your view,
be a significant disadvantage?
7872 MS ROBINSON: Well, I guess as we were giving
thought to this we felt that there was little difference for the elements which
are of concern, which is the notion of control, between 30 and 33.4 per cent.
But at the same time, there is a significant difference between a level of 30
per cent, where a minority shareholder doesn't have those sorts of protections,
and a level of 33.4 per cent where they do.
7873 So as we thought about it, we thought that
this might be a definition which both answered your concerns but also answered
the realities of investors who are investing and putting significant amounts of
money into things and don't want to have their investment diluted or otherwise
compromised. So we felt that to go from 30 to 33.4 per cent really made sense in
the circumstances in answering both objectives without raising any issues in
terms of control.
7874 So that was the reason why we are putting that
7875 MR. STEWART: Thank you very
7876 Thank you, Madam Chair. Those are my
7877 THE CHAIRPERSON: When you speak of the
protection of minority shareholders -- let's call the broadcasting undertaking
CTV and the company producer -- are you talking about the minority shareholders
in the producer who should not be penalized by having CTV on
7878 MS ROBINSON: No. We were talking about the
investment that CTV would be permitted to have in a production company without
that production company being considered to be something other than
7879 THE CHAIRPERSON: I would have thought that
it's the minority shareholders of producers who would be penalized by not being
able to sell to CTV if there is a regulatory prohibition on CTV purchasing
programming beyond a certain level from producers. You are talking about
protecting CTV as the minority shareholder in the producer?
7880 MS ROBINSON: Yes. What we wanted to focus on
for the Commission's consideration was what is an independent production company
and what level of investment is CTV to be permitted to have in an independent
production company without compromising that independent production company's
7881 THE CHAIRPERSON: Ability to have CTV as an
7882 MS ROBINSON: Yes.
7883 THE CHAIRPERSON: But you understand the other
point, too, is that there is a penalty to the producer minority shareholder if
he finds himself prohibited from selling beyond a certain point to CTV, Global,
whoever, so there are more -- because our concern is not only control, if you
use it in the sense of editorial control or programming, all looking the same,
because it all comes from the same place, which is also controlled by the
broadcaster, but it's the requirement of the Broadcasting Act to kind of spread
the work around. Therefore, as there is concentration and vertical integration
between producer and programmer, that may be the sole source.
7884 So it's not only control, it's also how much
money going to producers comes right back on the screen of the programmer who
has that producer as a shareholder or who owns the producer
7885 That leads me to ask you whether voting shares
is good enough or should it be all shares because of the last comment I made,
that the flow of money to producers and back to the programmer not be a closed
shop, so to speak.
7886 MR. FECAN: Madam Chair, we are not fussed
about 30 or 34. We could live with either.
7887 THE CHAIRPERSON: No. But I meant voting shares
as opposed to non-voting. Do you have a comment?
7888 MR. FECAN: The specific Act deals with equity,
actual equity, and we are not fussed whether -- which way.
7889 THE CHAIRPERSON: Yes. But we are not too
concerned about the Business Corporations Act. We are concerned about how to
impose requirements on broadcasters and whether they are necessary or
appropriate in certain circumstances to achieve objectives that are of interest
to us as regulators under the Act, that is, try to see that the money that flows
from broadcasters to the independent production industry is not concentrated in
one pot to the advantage of our licensees.
7890 That's our concern. Of course, probably an
argument could be made it would lead to more diversity as well. But my
understanding is there is a specific section in the Act speaking to independent
production, and we also want to hear whether these limitations are as important
or as appropriate in a digital world where you need to put all the best
possibilities of success in your basket.
7891 I was referring again to my dismay that there
are 360 digital boxes in cable subscribers' homes at the moment, 359 and one in
the Chairman's home.
--- Laughter / Rires
7892 THE CHAIRPERSON: We do need, then, to balance
what is needed for this to work? As I mentioned yesterday, that is why we are
raising this. Is it still appropriate? How should it be done?
7893 We appreciate your input.
7894 MS McQUEEN: The one thing -- perhaps we
haven't gone beyond stage two of the question. Stage one is to figure out what a
broadcaster affiliated company is. Stage two is to describe how that broadcaster
affiliated company can have access to the broadcaster's production slate: yes or
7895 We have only described to you stage one, which
is: How do we figure out what a real independent producer is? This is our
7896 The stuff about equity and voting shares is
over my head, but certainly not over the heads of my two
7897 That is step one: What is an affiliated
company? We have proposed a definition for that.
7898 Step two is: How much access should these
affiliated companies have to the licensee's production vis-à-vis other
broadcasters? That is not something that we have explored yet.
7899 THE CHAIRPERSON: Yes, I take your point. My
aim about trying to see whether there is a need for more flexibility could be
achieved at your step two by raising the bar perhaps and finding a new
equilibrium in the digital world. That is a good point. But you still need to
define it, you're right.
7900 Commissioner Demers...?
7901 COMMISSIONER DEMERS: Thank you, Madam
7902 I had forgotten a question that I thought I
didn't have to write down. It concerns Canadian content, or expenditures on
Canadian programs. Do you think in its deliberations that the Commission should
expect more from a large organization like CTV or any other which is as large
and as involved in programming of different types? Should it emphasize more or
expect more in comparison to another application which would not be affiliated
to the type of operation you have?
7903 MS McQUEEN: I think our initial answer to that
question goes back to our fundamental point, which is: Let's make digital work.
Let's get the most attractive services for consumers at affordable prices. That
is "job one", as they say in the advertisements.
7904 Our feeling is that when you look at this
roll-out and when you look at Category 1, the attractiveness of the services and
the doability of the services should be top of mind.
7905 Then I think you have to look at the
contributions each one is willing to give to the system. We have taken that
responsibility, I think, significantly to heart.
7906 We are proposing very high commitments to
Canadian content. We are proposing very high conditions of licence in terms of
expenditure. We have committed to interactive ideas and
7907 Over and above that we have other things to
offer to help the roll-out of digital. We have cross-promotional abilities
across our platform of stations, which we think will really do a strong job for
all services in helping this digital roll-out be a success.
7908 We have marketing and financial and
affiliation agreement experience which we think will help it to go
7909 I think what we are also able to do, I think
if you look at our EBITDAs, is that we have been willing to make a greater
contribution by taking a long-term view of the profitability of these channels.
At the end of seven years -- and I hope BCE stock doesn't drop because I am
saying this -- The Health Channel will have lost $6 million
7910 We believe that in the year after that it will
come into profit and it will be of long-term profitability.
7911 But in order to make digital work we have put
forward extensive Canadian content commitments which are taking a long view of
profitability. We believe that these are sound business investments, but we also
believe that patience is a virtue to temper our greed with.
7912 COMMISSIONER DEMERS: Thank you. If I were
asking in a negative way, would you think it would be discriminatory if we were
evaluating the criteria a little and thinking of higher expectations from larger
organizations such as yours?
7913 MS McQUEEN: If you mean, do you get points for
being small -- extra points for being small -- if that is what you are
asking, I guess I would ask you to consider whether or not that promotes the
best possible digital package.
7914 I guess what I would say is that big and small
have no exclusivity on great ideas, exciting program plans, solid business
plans, diversity and affordable subscriber rates. We both can come to the table
with those things.
7915 I guess that would be my answer. What has to
be considered, I guess, is the ability of the service before you to deliver on
its promises, and whether you think those promises will build
7916 MR. FECAN: Just to take it a step further, or
maybe to emphasize something Trina said, I think that you need to look at it
from the point of view of whether that size -- the leverage -- all of
those things that we think we have to offer -- whether that benefits the
system. By having the highest expenditures, the highest content levels and
generally the lowest costs, we think we are using our leverage and putting it to
work for the system.
7917 I think that is a significant factor in
weighing the discussion -- the different points of view that you brought
forward. I think that if we can use what we have and what you have given us, for
of course our own benefit and the system's benefit, then I think that is a good
proposition for viewers and for the system.
7918 COMMISSIONER DEMERS: Thank
7919 Thank you, Madam Chair.
7920 THE CHAIRPERSON: For fear that the CCTA drives
me out of town tarred and feathered, I want to correct the record. I intended to
say 359,999 boxes in cable homes as of June 2000 and one in the Chair's
7921 Madam Bertrand...?
7922 CHAIRPERSON OF THE COMMISSION: I have a
question about interactivity. Yesterday there was some discussion about: Do you
see a difference in the way you will be able to provide interactivity to the
viewer, whether you will be with the cable distributor or the DTH or MMDS
distributor? Does that require some content alteration in order to be able to
really get interactive to the viewer?
7923 MR. MURPHY: We are going to have a dynamic
system, which I think is a euphemism for: We are going to have different return
path capabilities out there as a fact of life for some time to come, and you
have to take that into account.
7924 We heard some discussion yesterday that
perhaps you program to the lowest common denominator. I don't think that is an
appropriate approach. I think that one of the key advantages of digital
programming is flexibility and versioning and customization and so forth. That
is the approach we have always taken with the web where we have had similar
challenges in the past. Is the Discovery viewer who is visiting exn.ca using a
low speed modem or a high speed modem? We have been able to successfully, over
the years, balance those two while always driving and pushing and leading with
our content to ultimately drive demand for higher bandwidth. I think that will
be the case with, for instance, DTH and cable for some time to
7925 CHAIRPERSON OF THE COMMISSION: Do you see that
in your business plan and the concepts you have developed as being the
responsibility of the licence holder and the program provider?
7926 MR. MURPHY: Ultimately, the viewing experience
and the value derived from the viewer is our responsibility. Accordingly, we
think that we are in the best position to customize that content based upon the
different features of the distribution systems and platforms.
7927 CHAIRPERSON OF THE COMMISSION: So the rates
that you are establishing here, if you were to be granted the licence, they
would include the costs of providing that type of content, whatever the platform
of distribution might be?
7928 MR. MURPHY: Yes.
7929 CHAIRPERSON OF THE COMMISSION: All right.
Thank you very much.
7930 THE CHAIRPERSON: Thank you.
7931 We will now give you a well deserved 15 minute
break. My watch is probably not the same as the clock, but, anyway, my watch
--- Laughter / Rires
7932 THE CHAIRPERSON: Fifteen minutes. Thank
7933 Nous reprendrons dans 15 minutes.
--- Upon recessing at 1045 / Suspension à 1045
--- Upon resuming at 1105 / Reprise à 1105
7934 THE CHAIRPERSON: Welcome back to our
7935 Commissioner Demers, please.
7936 COMMISSIONER DEMERS: Thank you, Madam
7937 I will first start with questions on the three
regional news applications.
7938 The topics I will touch upon will be the fact
that you have an application as a Category 1 for these three. Interactivity, if
we have more to say, the nature of service, the carriage, the synergies and
diversity and impact on conventional or other services.
7939 So let's start with the fact that you have
applied for a Category 1 licence for those three services.
7940 Why would you have asked for a Category
7941 MS McQUEEN: It is part of our fundamental
belief in making digital successful. As I almost didn't tell you, the demand for
those services, the news services, were the highest in the consumer research
that we found. People over and over again talked about the consumer demand for
the services. So given that we thought it would help make digital more
attractive to put the high demand services as part of the initial
7942 Kathie, I wonder if you could talk a little
bit about the demand.
7943 MS MACMILLAN: Thank you,
7944 I would like to talk about two aspects. One,
are some of the qualitative comments coming out and also some quantitative
statistics behind it.
7945 First and foremost, the news overall appeal
was the highest at 88 and 89 per cent for the regional stations in Alberta and
B.C. In the City Centre we only did focus groups, so I don't have quantitative
data for you because we wanted to explore the bilingual nature and could do that
best by speaking to the respondents directly.
7946 One of the strongest areas of appeal in the
quantitative is the breaking news programming at 94 per cent, and in fact that
came out of the City Centre as well where people say, "I love the anytime
aspect. No more waiting until 6:00 p.m. I get the updates I need on my
7947 I think there are significant issues that
aren't currently covered and this is a way to have them covered and initiate
public debate. "I like the option that I can go there to find any news item I
need, more information, whenever I want to". In fact, the respondents
said -- most indicated they would tune in every day for at least 10 to 15
minutes. They are looking for regional news that is relevant to them and their
lifestyles. Their life is on the go. They want a digital program that provides
them with the up to the minute news and flexibility.
7948 MS McQUEEN: We think these services in sum
meet all the criteria that the Commission has out for Category 1 service. They
do provide diversity and, as we said, we think that is especially important now
with the two factors that we mentioned before, the one being the consolidation
of news sources and the second is some cutbacks in existing local
7949 So given that with a very high demand, it
seems to us that these services build digital and they are Category 1
7950 COMMISSIONER DEMERS: Thank you,
7951 I will move along to interactivity, but we
have already covered most of this, but maybe on a smaller item. You have
referred to the regional services as all-news services in interactive
7952 Is this what you have described a few minutes
ago, Mr. Hurst or anybody else?
7953 MR. HURST: Let me just go through some more
examples of interactivity because I think a lot of what I described to you is
what we are doing on ctvnews.com which is, of course, our national news
7954 It is our plan and our expectation to break
down the walls of the television newsroom. Right now in the television newsroom
television, journalists are in a unique situation because they can see and they
can watch all sorts of television news feeds coming in. You know, they can see
pictures from helicopters, they can see pictures from the top of buildings, they
can see all the material that they gather all day.
7955 There is a kind of a saying in our news
organizations, in our news stations across the country, that of all the material
we shoot and all the material we put to air, 80 per cent is left on the cutting
room floor -- 80 per cent! We are often criticized, especially at election
time, for sound-bite journalism. We have all that extra
7956 These news channels will provide us with an
opportunity to take a lot of that material that we cannot put on air on our
schedule programs. We want to make and we want to give viewers the ability to
see all that material.
7957 Now specifically when it comes to
interactivity, we want to be able to allow viewers directly to plug into the
news sources that not only come into the television station now, but to be able
to plug into our big digital file servers where all those stories are, plug in,
select yourself whenever you want it.
7958 Our television screen is going to be a
multi-screen that is going to give you the main window of the breaking news, the
urgent, the vital news. Surrounding that are going to be data streams of local
stock-market quotes from here in the National Capital Region or Alberta or
British Columbia. Your local weather will constantly be on the screen --
constantly on the screen.
7959 So when we talk about interactivity --
and I want to ask Scott Hannant from Ottawa to talk a bit about our key program
which is News Navigator and how on a daily basis on this program of News
Navigator, how we expect to interact with the people in the
7961 MR. HANNANT: I suppose the News Navigator is
one of the best examples of interactivity and what is interesting about the
interactivity on these regional news services is that they go beyond normal
interactivity, that is just going in, getting information and navigating through
7962 These services allow people to participate.
They allow people to drive the direction of the news. Let me give you an example
of how people might be invited to become involved.
7963 We all remember the traffic chaos on Elgin
Street. If News Navigator had been then -- if we had had these
services then -- we could have connected live to our City Hall camera
and got the official who was in charge of all that chaos, which looks so lovely
7964 We would send our mobile camera to Elgin
Street and perhaps talk to people stuck in the gridlock. We could consider a
live camera at the Rideau Centre where people had to go through the mess to get
to, and we could activate our traffic and Interprovincial Bridge cameras which
would be connected to our Web site, and also connected to our Web site would be
maps that would tell people, that would provide information to them about what
roads were closed, what roads were open.
7965 In other words, information that they could
use and interact with and we might create Internet hot buttons to relevant sites
at City Hall, the NCC and OC Transpo.
7966 So all of this would allow people not only to
get the information, but also to participate, to offer opinion and offer
editorial direction to the program.
7967 MR. HURST: Vince, you had wanted to add to
7968 M. PONS: Dans la région d'Ottawa/Hull, News
Navigator va être 100 pour cent bilingue.
7969 We will give our audience an opportunity to
interact with us in both official language.
7970 MR. HURST: In terms of interactivity, I want
to ask Lynn Raineault. We have in our application proposed a 50-camera
initiative to install cameras and the question, Lynn, is where would you want to
install those? And just before you start, the idea is for the viewers to be able
to be their own journalists, to be able to connect directly. Quite frankly, we
will be able to do it on the Web site. We expect that within a year of launch,
we will be providing live television feeds of the cameras that are now only seen
in the newsrooms. We want to be able to provide three or four sources within the
first year, and then grow upon that.
7971 Lynn in Vancouver.f
7972 MS RAINEAULT: I can tell you, Commissioners,
that on the lower mainland, I have already been asked for a camera in the GVRD
offices. The Great Vancouver Regional District is a consortium, I guess, of 21
municipalities who feel that there isn't enough coverage of municipal affairs
and they are quite right, and they are already in line waiting for a
7973 But we could have them in so many more places.
In the Alberni-Cladquot area of the Island, there are 55,000 people. That is
more people than there are in West Vancouver, but the people from West Vancouver
are heard from much more often. We could install a camera there. We could have
cameras in places that people want to know about like the Sea-to-Sky Highway,
when everybody is going skiing and how long is it going to take them to get
there as they are Whistler and Squamish.
7974 So we plan to roll-out the cameras by the
third -- or have to have the full component of 50 cameras by the third
year, but I can tell you that there are people who are asking for them
7975 MR. HURST: When we talk about the demand for
this service, I think this is one of the reasons that people look at these
service as, "Yeah, I'd like that."
7976 We talked about the meningitis story in
Alberta. This crisis among families in Alberta last winter, when, unfortunately,
one person died, and the entire teenage and youngster population was inoculated,
this would be an example of a way, not only as a big story and a vital news
source in a critical time, but people would be able to actually turn on their
television, or through their digital box, if that technology -- we hope -- is
available, or certainly through the Web site, to be able to actually see the
length of the line-up at their local inoculation clinic because we would have
moved one of our hot cameras to that crisis situation.
7977 And I know this is a long answer,
Commissioner, but I just did want to add to Trina's comment about: why a
7978 We are planning with these 50 cameras to do a
high-quality news service. It takes a significant investment. And I just make a
comment that yesterday our chair, Commissioner Wylie, talked about the risky
nature of these national channels that we are proposing. These news channels
that we want to do are much, much riskier than the national carriage. Our
subscriber base is going to be significantly smaller than the national digital
subscriber base. The risk to us on the news channels is quite significant and
that's why -- and I think Commissioner Wylie also used the words "guaranteed
carriage" -- we need "guaranteed carriage" to be able to make the kind of
investment for the purpose...to build the kind of service, the vital service,
that we proposed.
7979 MS McQUEEN: If I just say one last thing about
7980 One of the things about the communities that
we are talking about, the three communities, is that each of them has
significant populations in multicultural areas. One of the continuing complaints
from these communities is that they are only seen on television in aspects when
there is bad news involving their members. Having a 24-hour news channel will
enable us to truly represent the entire population of a city -- the good times,
the ordinary times and the bad times.
7981 Unfortunately, with scheduled news there is a
necessity to bring people's attention to the aberrations from the system: the
crimes, the diseases, the crises. With an all-news channel in a region, you can
in fact reflect much more fully the diverse nature of that particular
7982 Because the demand is so high for that and
because it will be spread among each section of the community, I think that's
why, when you look at the people who intervened in favour, they were the people
whose task it is, mayors or officials, to make a community out of the places
that we're talking about. And what they're talking about is the ability to make
their community come together or to allow their community to come together and
function as a whole community -- all of its diverse parts.
7983 COMMISSIONER DEMERS: Thank
7984 So if I could conclude on interactivity, it
will be either from the subscriber himself or herself or you would use that as a
way of broadcasting?
7985 MR. HURST: Journalists, their job is to
interact with the community, and we want to use, and are beginning to use now,
some of these interactive tools. We talked earlier about that funny little golf
ball camera on the top of your PC. We will use every means possible, as we are
starting to do now, to become interactive because that's our job: is to interact
with the community.
7986 We hope it is the digital box. We are
programmers. We're not technical people. We certainly know there is capability
now on the Web and there will be more and more capability to take real moving
pictures and select moving pictures, and we're very excited to be able to
interact much more with our viewers.
7987 COMMISSIONER DEMERS: Thank
7988 So just to conclude on that, if the three
applications were approved and you would go on the air, what we are describing
could happen immediately on the first day?
7989 MR. HURST: Much of it. And then the second day
more of it. By the end of the first year, we will be...we hope to be, because we
know we can do it technically now, allowing viewers to plug in directly to those
newsroom sources that we have. And as technology goes...but your answer is: the
first day, absolutely.
7990 COMMISSIONER DEMERS: Thank
7991 And just to come back on the camera
initiative, also, this may be...will be used by the channels themselves, and
also you would make it available to the public, I understand?
7992 MR. HURST: The objective is, absolutely, to
make it available to the public. I suppose to a newsperson, always trying to get
new names and faces and stories, drilling deep down into the community, these
will be cameras that we want the public to use. We want to create a regional
community townhall, be it an issue here in this area. I understand there may be
a school strike in the Ottawa Carleton area among high school teachers. We might
have a public forum. We might move our cameras to various important schools. We
would certainly be installing cameras at the Board of Education. So the
objective is very much to have the public use these cameras.
7993 COMMISSIONER WILSON: Thank
7994 I will move on to the nature of service -- and
there again we're talking of the three applications.
7995 The "proposed nature of service" definitions
for each of the three services does not explicitly include reference to the
regional nature. Would you accept a revised "nature of service" definition that
includes the region?
7996 MR. HURST: Absolutely. The purpose of these
services is to serve the viewers in the region.
7997 COMMISSIONER DEMERS: So this is easier when we
talk about B.C., about Alberta.
7998 Now, when it comes to the national capital,
what is the National Capital Region, from your point of view, in this
7999 MR. HURST: I'm going to ask either Vince or
Scott to comment on this, although there seems to be...is there a debate about
this? And I only kind of stopped because I know when you licensed a regional
news channel in Toronto, CP-24, I think there was the same discussion: where do
the boundaries of a region stop? With the cable company, you licensed that cable
company with a defined boundary area, so....
8000 I used to live here a long time ago. Who's
going to take this one?
8001 MR. HANNANT: I'll take that.
8002 As executive producer of CJOH news, we feel
that we broadcast to eastern Ontario and to western Quebec, and the Outaouais in
particular. We consider ourselves to be the hometown station in many of the
communities in this area and we consider ourselves to be the community station
in these areas.
8003 For a better defined explanation to that, I
turn to Nikki Moffat, who has the actual details, in terms of the
8004 MS MOFFAT: Our business plans are predicated
on carriage in the Rogers, Cogeco and Laurentian cable system.
8005 COMMISSIONER DEMERS: Cogeco. And
8006 MS MOFFAT: We have Laurentian Cable in the
Hull region -- in the region of Hull.
8007 COMMISSIONER DEMERS: So, in a sense, it's the
cable services that were defined up to where you would go outside the core
8008 Could you describe more the service in the
region -- in the capital region? And by that I mean your bilingual service
especially: what it will consist, how it will...what it would be like on the
screen for the subscriber?
8009 MR. HURST: Scott?
8010 MR. HANNANT: I think one of the things that's
so attractive about this service is its bilingual nature. We want to build a
service that will reflect the bilingual nature of not only this city, but of
8011 As you know, many people live and work in both
official languages in the office, and often, in this area, at home, and we would
like to reflect that. Our flagship show, "The News Navigator", that host of that
program would be fully bilingual. That program, as we mentioned when we were
talking about interactivity, we would encourage people to participate in the
language in which they feel most comfortable. And if a question was asked in
French, then that question that question would be answered in French. If we were
looking at a breaking news story, perhaps a building collapse in Gatineau, then
we might interview the fire chief in French and summarize the key points that
the fire chief made. The points of when roads would be closed, danger to the
public, toxic fumes, that kind of thing, they would all be summarized and
encapsulated in English.
8012 We would also provide a headline news service,
and that headline news service would be exclusively in English and exclusively
in French, so that people would get their information and the news they needed
in both official languages.
8013 The screen, we refer to it as a "rich pallet
of information" and that information, weather and stocks, as well as the
scrolling headlines, would be provided in both French and
8014 COMMISSIONER DEMERS: Let's take the headlines.
Be more precise. It would be full screen English and then full screen French or
vice versa? Is that our split screen or did I understand you?
8015 MR. HANNANT: We would have headlines in
English, with an English anchor or news navigator, the person hosting the
headlines. They would be in English and then they would be in French, so that
you would be able to tune in at a regular time and be able to get your news
headlines in either official languages.
8016 MR. HURST: May I just add, because I know you
have a follow-up question, what the screen is going to look like. It's going to
be this rich palette, multiscreen with a main news window, surrounding that
various datastreams, the local stocks here and the National Capital Region at
the bottom, the local weather across the region and various streamings of
information, both in French and in English, of community events and community
headlines. That's the screen.
8017 I know you had a follow-up,
8018 COMMISSIONER DEMERS: After that it's the audio
that -- you can do all that on the screen at the same time -- well, most of it
-- in two languages at least. It's easier to have the weather in the Arabic
language but then the sound, the audio, would be the same. You can't have both
at the same time.
8019 MR. HANNANT: The nature of the service is --
the bilingual nature of the service is described as bilingual and so we would do
it exclusively in English and as well the updates would then be in French. So
you would be watching and listening to English and the same anchor would have
the ability, being fully bilingual, to give you those headlines in French as
8020 COMMISSIONER DEMERS: Are we talking about 100
per cent in both languages or 50 per cent? What's the -- a full day would
consist of a bilingual service, nothing more, nothing less?
8021 MR. HANNANT: The full day would consist of a
bilingual service. In terms of the balance, overall we would like the balance to
be 70/30. We believe that that reflects the bilingual nature of the community.
But the nature on a particular day or a particular hour would be driven the
nature of the news, so that if there were a story about water quality in Hull
where there was a boil-water order on certain streets in Hull. That story would
be driving the agenda and that story would be more in French on a given day. On
another given day it might be more in English.
8022 But we believe that it is the bilingual nature
of this channel that is part of its attractiveness, and it is in our best
interests to keep it bilingual and for it to reflect that bilingual
8023 COMMISSIONER DEMERS: That would probably be my
8024 If we were reversing that, would something
that happened in Ottawa always be presented in English and then condensed in the
description you have made into French?
8025 MR. HANNANT: I think there are a number of
different ways in which news can be presented.
8026 I think there are enough people in Ottawa that
-- for example, if you went to a story that dealt with a City Hall issue, many
of our city officials on both sides of the river are fully bilingual. What I
would envision is as well as doing the interview in English it could be done in
French, if that was the person who was being interviewed first
8027 You know, a lot of what we do -- as Bob said,
80 per cent of what we do ends up on the cutting room floor and sometimes
that consists of French interviews where we are using a smaller portion of the
French interview and then trying to translate it on the English we would have
opportunity to present that whole interview.
8028 COMMISSIONER DEMERS: Thank
8029 Now more on the content of news. You have
referred to the fact the people you have interviewed or your consultant has
interviewed, that they want regional news, local news. Will there be a
proportion of national news/international news coverage on your
8030 MR. HURST: I think we said in our application,
"B.C. Newsnet is about...", "Alberta Newsnet is about...", "National Capital
Region, NCN, is about this region first, this region second, and Canada and the
rest of the world third." We want these channels to be hyper-region. That's the
purpose and the mission of these channels. There will be, because Canadians are
still interested in events from Canada and from around the world, some small
percentage of news from Canada and from around the world.
8031 If you are asking me for a percentage, I
hadn't really thought about it as a percentage, and if you were to ask me -- I
would probably have to go and look at our local newscast now and try to figure
out what international component they have, but it may be kind of a frustrating
experience because we are so popular in our local markets with our local news
programming because they focus on stories that are primarily of importance to
8032 MS McQUEEN: One thing we will say, these
stories will be 100 per cent from a regional perspective. There will be no
national stories and no international stories on these channels. They will be
stories about, for example, Alberta and Alberta's interests. Let me give you a
couple of examples.
8033 It is a local Alberta story what might be
happening to the Mexican state-owned oil company Pemex. That story would
probably not make the national news because it's not necessarily interesting to
all Canadians. To Alberta, it is a very strong regional story and one that might
come from Mexico but be about Alberta, in the same way obviously in Vancouver,
with its large population, there may be stories of relevance about Hong Kong and
about China that are of direct relevance to the people of
8034 One of things that I think in this modern age
is that you have to do both. The old saying: does it think globally and act
locally -- I can never get it the right way, but I think you have to be able to
comprehend that your own region may have national and international
8035 For example, the Premiers Conference was last
week. Each premier had his own particular news story at that Premiers
Conference. We would not have done the meltdown of what happened at the Premiers
Conference, but we would have focused on the particular premiers for each
region. So there would be no stories, national or international, unless they
were of direct relevance to the citizens of the community that the channel
8036 COMMISSIONER DEMERS: Thank
8037 On a particular point now, I thank you for the
questions yesterday concerning fillers. Maybe I should just pose the question
and you probably are ready to answer.
8038 You have indicated that there would be some
Category 15s called filler. And you also heard that usually the Commission
doesn't consider that that category should exist for specialties. Have you
thought about the answer to that question now?
8039 MS McQUEEN: We are wiser now than when we
wrote the application and we, for the record, withdraw Category 15 from the
categories assigned to the news channels now under discussion.
8040 COMMISSIONER DEMERS: Thank
8041 On carriage, could you confirm your carriage
assumptions for each service?
8042 MR. HURST: Yes. I'm going to ask Nikki
8043 Nikki, you go ahead.
8044 MS MOFFAT: For the news services, we have made
assumptions that we will be distributed by those cable systems that operate in
the regions where the program undertakings will occur. For instance, for the
service Newsnet BC, it will be carried in the cable operators that operate in
the Province of B.C.; and those cable systems are Rogers and
8045 For DTH purposes, because we have applied for
a national licence and the DTH signal goes nationally, we have made assumptions
in our business plan that we will be specifically operating in a region. So we
haven't taken the whole national distribution. We have taken a percentage to
apply it to a region specific.
8046 COMMISSIONER DEMERS: Okay.
8047 Have you had discussions with the DTH
operators on that?
8048 MS MOFFAT: No, we have not.
8049 COMMISSIONER DEMERS: Thank
8050 Synergies -- you have described certain
synergies that would exist between the proposed regional news service and the
relevant local stations. Could you please elaborate on the synergies that would
exist between the regional news services, the local station, and the CTV Network
8051 MR. HURST: I think to make these channels
possible, to bring the kind of high quality stories to the viewers in these
regions, it is best to start from an infrastructure that you have that already
produces quality news programming.
8052 In each of these regions we will be using the
infrastructure and the staff -- adding more staff -- as a very
closely knit news organization.
8053 These newsrooms now know their regions better,
I would argue, than no other broadcaster in that area. They are there to serve
their regions and they would be part and parcel -- integral -- to the
success of these regional channels we are proposing.
8054 MS McQUEEN: The other synergies, I think, that
we should mention --
8055 It isn't only CTV News, the local stations and
CTV Newsnet. We have TSN, which covers local sports and local stories about
sports. We have The Discovery Channel, which daily covers aspects of science and
technology and nature in various regions. We have The Outdoor Life Channel. We
have Talk Television, which will do feature interviews with people for those
8056 Just like the 50-camera initiative, there is a
wide range of CTV platforms which are doing stories in particular regions
available to these news channels. That is an advantage which I think very few
operators can provide.
8057 MR. HURST: Just in terms of other news
materials, adding to Trina's list, we also have a partnership -- a news
partnership -- a news exchange -- with TVA which will help us in this
area, and we have a negotiation and a partnership with APTN to share news
materials and facilities and bureaus across the country.
8058 COMMISSIONER DEMERS: Thank
8059 No doubt, if the three were licensed, would
there be synergies among the three licensees?
8060 MR. HURST: Among the three? Probably not, in
that they will be focusing exclusively on drilling down into the communities --
and I am talking about on an everyday basis -- into their
8061 However, if there is a story from Alberta
where it is unique to British Columbia and something happens -- for
example, the terrible diaster at the Pine Lake trailer camp. I think some of
those people were from British Columbia. That would be the kind of co-operative
effort where they would exchange materials. They may even send a
8062 MS McQUEEN: Bob is, of course, correct that we
want to make these channels distinctly regional so that there would be
occasional stories. But one of the things that is very expensive in news
production is graphics, for example. We would be able to have a common look for
these channels. Marketing approaches, again, would be able to be shared.
Infrastructure, in terms of financial -- and there is always a legal cost
somewhere involved with news -- would be able to be shared.
8063 So the whole CTV infrastructure would be at
the disposal of these channels.
8064 COMMISSIONER DEMERS: Thank you. Are the three
applications tied together? In other words, could the Commission license one
without licensing the three?
8065 MS McQUEEN: You would break our hearts, but
you could do it.
8066 COMMISSIONER DEMERS: Thank
8067 MR. FECAN: Clearly, from our point of view,
since you are talking about 10 available slots, these three channels would fit
into one of those slots.
8068 COMMISSIONER DEMERS: Thank you. On
diversity -- and maybe we have already covered this, but maybe you could
comment on this.
8069 Would there be some programming overlap
between the proposed regional services and other services that you have? From
that point of view ...
8070 MS McQUEEN: We don't think there would be any
strictly duplicate programming because anything that was used from one to the
other would be put in a new context, packaged in a different way, with different
hosts and in a different context.
8071 COMMISSIONER DEMERS: And the reverse? What
impact would the proposed services have on the local service of a conventional
8072 MS McQUEEN: They would strengthen the local
services. The more resources you have in the community, the more cameras, the
more reporters, the more sources, the better your overall news service is. It is
not just the local stations. They would be the first beneficiaries, but Newsnet
and CTV National News would also be able to do a better job for the
8073 COMMISSIONER DEMERS: But would you have other
comments on the local service of other licensees?
8074 MR. HURST: Of other licensees,
8075 Conventional television?
8076 COMMISSIONER DEMERS: Yes.
8077 MR. HURST: I think what we are proposing
here -- it is a 24 hour, all-news channel. It is a new distinctive service.
The objective of the service is to drill down into the diverse communities to
assess all of that material on the cutting room floor.
8078 I am going to ask Reg to talk a bit about Pine
Lake and maybe Hub Oil in a minute, in terms of what we would
8079 Conventional television has scheduled news
programs, of course. But it makes up just a small part of all the other stuff
they do -- drama, sports -- all that other stuff.
8080 Right now scheduled programming requires the
viewer to conform to the schedule of the television station. All-news channels
are quite the reverse. When we went to do our surveys, viewers wanted the news
when they wanted it, against their hustle-bustle life.
8081 I think that perhaps to explain this the best:
How would this channel differentiate from the news provided in these other
8082 Reg, do you want to talk about Pine
8083 MR. THOMAS: Sure. I think the most important
thing here is that we are looking at a totally different service. Conventional
services right now are appointment television. This is a service that would
serve a niche; that is, it would be there when the bureau needed it, on
8084 It would also be a service that would be there
and would change its program schedule to meet the needs of the
8085 In the event of something as disastrous as
Pine Lake, we would provide extended programming that would go on beyond what is
currently the option of the conventional broadcaster.
8086 Right now, in fact, the community, while it
may have fallen off the front pages and it may have dropped in the lineups of
the national news services, is still in need and still seeking
8087 This is an area where we think we can provide
coverage and also provide a service to the community to be able to allow the
community to ask direct questions of people who may be in charge of the clean-up
there and be able to participate in making some decisions about what it is that
they want in their news coverage.
8088 This is not something that conventional,
traditional, appointment television newscasts can offer today.
8089 MR. FECAN: If I could chime in here, you asked
how it would affect other conventional services in an area. Our experience in
Toronto with CP-24, which has been around now for a couple of years, is that we
have not seen any lessening in our news ratings on CFTO. So it seems that
something has been added for the benefit of the public and the system without
hurting the existing other news operators, and we are evidence of
8090 COMMISSIONER DEMERS: Thank
8091 That would conclude my questions, Madam Chair,
on those three applications.
8092 THE CHAIRPERSON: I have one question. Putting
things back in perspective, you have already a national network news service.
You are present, or available, through your stations to an overwhelming majority
of the people in the areas you are going to serve, albeit through distribution
undertakings in many cases.
8093 If I look at the National Capital Region, I
think I am right in saying that there would be in year 1 34,000 subscribers to
this service, and in year 2 47,000 in the National Capital Region. Is that
8094 MS MOFFAT: Yes.
8095 THE CHAIRPERSON: With penetration, as
indicated, these are your forecasts. That means that -- when I heard you so
eloquently talking about toxic fumes and traffic jams and ice storms and water
quality -- 34,000 of us Ottawans and Outaouaisers would have the benefit of
this because we would have digital capacity, in the first couple of
8096 What comfort can you give us that you would
still meet your responsibilities in CJOH, for example? Because there has been a
lot -- I heard you, Ms McQueen, say that it would probably improve the
service. That's true. I also heard that you would use 80 per cent of what ends
up on the cutting room floor. Is there not a danger that over time that would be
your focus and it would replace your serving Vancouver or Ottawa on your
8097 Reminding ourselves that there are still a
number of Canadians who don't even have analog distribution, never mind digital,
Is there not a danger?
8098 As you know, in the last year or so, vis-à-vis
the private sector and the public sector, there have been complaints that
over-the-air stations are not serving their local public, and the Commission has
been criticized for saying that -- it is so important, as Mr. Fecan was
saying, that they will do it for their own commercial interest.
8099 But what is the danger of that happening; that
it becomes your way of serving these communities?
8100 MS McQUEEN: Some of the answers, as you have
already noted, have been given. First of all, the more resources a news
organization has, the better able it is to cover stories for whatever platform.
That is number one: increasing the capacity to cover news in the National
Capital Region or in Alberta will benefit every news platform that we
8101 Number two, as you have mentioned, obviously
there is a strong commercial interest in making sure that CJOH news or VTV or
CFRN or CFCN continues to have large audiences. That is a strong commercial
8102 And we do run a conventional service that is
the major contributor to our bottom line, and will be so for a long time. We are
private sector people and we do behave as private sector people. To us, the news
is an extremely important part of the delivery of our audiences, and that's an
extremely important part of the delivery of our revenue. But over and above
that, it's our brand. It's our core competency. It's the strength. It's one of
the banners that we wave. The most precious thing that we have is our brand. One
of the most precious parts of our brand is our news services, especially the
local ones. That is a strong impetus for us to continue to be the choice of
Canadians in every community.
8103 MR. HURST: Commissioner, may I just add
8104 THE CHAIRPERSON: You can assure me that if
there are toxic fumes in Westborough in a few months, I'll see it on
8105 MS McQUEEN: You will, indeed.
--- Laughter / Rires
8106 MS McQUEEN: And I guess when you talk about
34,000 or 47,000, the fact is that those are households, not people. So we could
increase the number of toxic fume knowledgeable people a little.
8107 THE CHAIRPERSON: Sorry. Now, that I've gotten
rid of my children, I count myself, not according to Statistics Canada!
--- Laughter / Rires
8108 MR. FECAN: And just further, as further
evidence, just well before we made these applications, within the last year, we
have been rebuilding, for example, CJOH's technological infrastructure from top
to bottom. So that they have the best news tools to be here and be leaders in
this community for a very long time.
8109 THE CHAIRPERSON: Thank you.
8110 Questions? Counsel...Commissioner Williams
first, and then counsel.
8111 COMMISSIONER WILLIAMS: Given that Alberta and
B.C. have common interests with the northern territories, like the Yukon,
Northwest Territories and Nunavut -- say particularly if I just focus on the
western Northwest Territories, there's oil and gas that has a lot of B.C.
interest, diamonds that have international interest, and gold, and these two
provinces particularly, B.C. and Alberta, for the most part, supply many of the
products, employees, investors, technical expertise, to these areas -- I guess
I'm curious, will Newsnet B.C./Alberta cover news from those regions and have
plans been made to facilitate that? And is infrastructure and facilities in
place available for your use?
8112 MR. HURST: I want to answer that, being an old
Alberta bureau chief, who had spent a lot of time in the north.
8113 We have not specifically decided where we're
going to place our 50 cameras and where we're going to build our lines and our
links to those. But Yellowknife and Whitehorse and the western Arctic area is an
important area for Alberta -- Alberta being the gateway to this area. And I
suspect we will be putting cameras and reporters certainly in Yellowknife.
Whether we go as far up as Inuvik or Tuk, I'm not sure about that, but I bounce
it over to the local current experts. Reg? Len?
8114 MR. THOMAS: Well, just to follow up, I think
it goes back to the synergy question earlier on, as well. I think certainly
you're correct in saying that there is a shared interest in that area. And I
think this is one of the advantages we will have in this is being able to share
those resources. It is a vast area that we all cover and I think the
possibilities of being able to pull together the strengths of Newsnet in
Alberta, Newsnet in B.C., is going to help us in those shared areas to get more
stories out and to get more voices in those areas than we ever had in the
8115 MR. PERRY: The 50 cameras also include feed
sites, so if we install a camera in northern Alberta or the Yukon, it will allow
us to use that feed site to ship stories, as well as live footage. So it will
give us another avenue into these areas.
8116 The same works for southern Alberta, in the
Crows Nest Pass, where B.C. has a huge interest, Alberta has a huge interest.
We'll be able to open that up, as well.
8117 MS McQUEEN: And I would last reference what
you've already heard about, which is our partnership with APTN. CTV has been a
leader in investing and providing programs relative to the build-up of that
great service, and in return APTN has kindly acknowledged that they will help us
out with news stories.
8118 COMMISSIONER WILLIAMS: Great. Thank you very
8119 THE CHAIRPERSON: Counsel?
8120 MR. STEWART: Thank you, Madam
8121 So, for instance, CTV Newsnet Alberta will not
be confined, then, to Alberta news or news seen from an Alberta perspective? And
I'm asking the question in terms of trying to get an operational definition of
the nature of service that the Commission will eventually have to come up with,
should it license the service?
8122 MS McQUEEN: The nature of service is that
every single story will be relevant to the interests of the province or the
region in which this service is located -- every single story. The originating
point of the stories may be outside the region, but the nature of the stories
will be of direct relevance to the region involved.
8123 I don't know if that helps you with the legal
definition, but I'm sure that we could work together to come up with
8124 MR. STEWART: Thank you.
8125 And you would be willing to accept a revised
nature of definition that would reflect what you've just said?
8126 MS McQUEEN: Absolutely.
8127 MR. STEWART: Thank you.
8128 With respect to the CTV News Centre Nouvelles
service, can I ask you why you didn't, in the "nature of service" definition,
include the bilingual element?
8129 MS McQUEEN: We're all looking at each
8130 MR. HURST: Gosh, I guess we should
8131 In the description of the nature of the
service, it is to be a bilingual service. If we did not include it in the nature
of service in that description, we should have.
8132 MS McQUEEN: It should be in there. We
8133 MR. STEWART: I'm just specifically referring
to section 7.1, where you described the nature of service.
8134 You do in subcategory (a) refer to it as
"bilingual." It's simply not in terms of the "condition of licence" definition,
and so, I take it, you would have no objections if it were revised
8135 MS McQUEEN: Yes.
8136 MR. STEWART: -- to reflect the bilingual
8137 MS McQUEEN: Absolutely. That was an oversight.
8138 MR. STEWART: And can you assist the Commission
to identify how the word "bilingual" should be interpreted and whether there
would be any value in defining this further in the condition of licence? I see,
for instance, that you have a percentage breakdown of 70 per cent English and 30
per cent French and that in your application you refer to the demographic's
breakdown there. Is that how you would see the breakdown in actuality taking
shape in the service?
8139 MS ROBINSON: That is how the licence is framed
and written. I think the Commission can appreciate that we are covering new
territory with this type of proposal. But if that was an issue that was of
concern for the Commission, I think that we would be prepared to include
something which would have, let's say, a floor. So it would be not less than 30
per cent. So the Commission would have an assurance that in fact this was what
8140 That wasn't included specifically, but if
certainly that was something that the Commission would like to add, I'm sure
that we would be amenable to that.
8141 MR. STEWART: Thank you.
8142 Those are all my questions, Madam
8143 THE CHAIRPERSON: These questions remind me of
the Commission attempting some 25 years ago to fill a position that was
bilingual and the form didn't particularly say what that meant. And as it turned
out, the gentleman hired spoke French and German.
--- Laughter / Rires
8144 THE CHAIRPERSON: Commissioner
8145 COMMISSIONER DEMERS: Thank
8146 So I would now turn to TV.tv, a few questions
on the nature of service content, especially questions on the TV Guide
component, interactivity and we'll end up with the filler question, which will
be, no doubt, a short one by that time.
8147 In the nature of service you are proposing a
service that is part TV promotion, part TV guide and part media
8148 Can you describe how these things
8149 MS McQUEEN: I would ask Mr. Mustos to help
with that one.
8150 COMMISSIONER DEMERS: You probably could refer
to what we have seen this morning on the screen.
8151 MR. MUSTOS: Yes. I think the easiest to think
about TV.tv is to think about a full screen with promotional videos happening
with 90 per cent Canadian content, 24 hours a day. There will be programs within
the day that will deal with issues of media literacy and there will be program
promotions that are programs that will range from 5 to 20 minutes. In addition,
there will be promotional videos of 1 to 3 minutes.
8152 This is what you will see on your screen and
then there will be an icon on the screen that will help you move into a search
engine if you want to now get into the electronic programming guide so that you
can search for subject matters or stars or directors that are of interest to
you. Once you have begun that search, one of the things that I am most excited
about with this service is that it always brings the Canadian choices up first
and highlights them.
8153 COMMISSIONER DEMERS: Thank
8154 If we could take it another way. Would you
comment as to why you feel TV.tv should be considered a true program service
rather than primarily an alphanumeric service?
8155 MR. MUSTOS: We have proposed somewhere in the
neighbourhood of 800 program segments. These are the program segments that will
be running 24 hours a day, that will range from 5 to 20 minutes. They will be
divided into four program strands: Parents' Choice, Canadian Nights TV, tv.info
and Stars and Personalities. This is what you will see on your screen at all
times, should you wish it, and within a strand, we are proposing a number of
programs that will deal with specific things under that strand.
8156 So we, in fact, see the primary purpose of
TV.tv to deliver programs about Canadian television and that is why we see it as
a programming service.
8157 COMMISSIONER DEMERS: Thank
8158 From another point of view, how will TV.tv
programming differ from the programming provided by StarTV specialty
8159 MR. MUSTOS: StarTV is a service which is
committed to Canadian entertainment. In their service, they cover dance, they
cover feature film, they cover theatre, they cover literature, they cover
performing arts and they cover television.
8160 What we see with TV.tv is a service that is
exclusively dedicated to television, 90 per cent of it Canadian television. A
further point with respect to Star is that I believe their Canadian content
levels are 30 per cent, rising to 50 per cent by the end of their
8161 When you think about all the subsets of
entertainment that I just mentioned -- and imagine 30 to 50 per cent
of that being dedicated to dance, theatre, feature film, literature and
television -- and then you compare that to TV.tv which wants to spend 90
per cent of its schedule on Canadian television exclusively, we see the service
as being quite different.
8162 With respect to the notion of Star being a
service to try and help the Canadian star system, we do see shared objectives
there, but I would point out to you that in the face of the avalanche of
marketing and promotional material coming into Canada from the U.S., that we
think the concept of having two services available in the spectrum of Canadian
broadcasting service that are desiring to enhance the Canadian star system is a
terrific thing. But in terms of the actual programming 24 hours a day, we don't
see a lot of overlap between TV.tv and Star.
8163 COMMISSIONER DEMERS: You see no
8164 MR. MUSTOS: By that I meant the relation back
to the point about entertainment and all the subsets of that versus exclusively
8165 COMMISSIONER DEMERS: I think you could see
that my question related to the fact that one of the criteria for issuing
digital licences was that it would be different from what is already on the
8166 MR. MUSTOS: I think there is no question that
Star will be covering Canadian television as part of its
8167 My point is only that amongst all the other
components of entertainment that they will be looking at, and given their lower
Canadian content levels, I think that the TV.tv service will distinguish itself
as a very unique service that is focusing exclusively on Canadian television in
terms of the showcasing of Canadian television, in terms of Canadian media
literacy issues as well as the program guide which will always make the Canadian
television choices the first ones you see.
8168 COMMISSIONER DEMERS: A short question on
content. You have emphasized, I think, that approximately -- well, 90
per cent would be Canadian content, and that will be due to videos. Is that only
in the fact that you would be providing program videos?
8169 MR. MUSTOS: No. In fact, I would say that it
is almost the opposite. The program strands that we have described in our
schedule -- the ones that I referred to a minute ago, Canadian Nights TV,
Stars and Personalities, tv.info and Parents' Choice -- will be
original programming, original Canadian content programming designed for those
strands that may be 15-20 minutes in length per program.
8170 You may have noticed in our financial
statements that we don't have a figure beside foreign content. That is because
we think that the foreign component of our schedule that will be going in will
largely come in the form of those program videos that we make available on our
service at no cost to the people providing them.
8171 But in fact, it is the programming that we
will be putting into the service that will be the unique nature of it and it
will not be predominantly the program videos. That is not to say that there
won't be many, many Canadian program videos throughout the day and our schedule
also contemplates somewhere in the neighbourhood of 30 to 80 one to two-minute
program videos being dropped in within each two-hour block, within each two-hour
8172 COMMISSIONER DEMERS: So in a sense it is a
channel that would promote what is on Canadian television, whether the
programming on Canadian television is foreign or not. It is the promotion of
8173 MR. MUSTOS: No. It is the promotion of
Canadian content programming. One of the things that we did talk about in both
our video and our Powerpoint presentation, which I would like to come back to,
is that we see ourselves as an equal access Canadian programming showcase
service. We will be taking programs from CBC, from Family Channel, from Star,
from Teletoon and we will be taking the Canadian content programs that are on
those services and we will be putting a spotlight on them through program videos
and as well as through those programs that we have designed for the strands such
as 245 where you go out to the set and you go to the set of DaVinci's Inquest
and you talk to the star, you meet the director, you meet the producer and we
will make sure that all of our programs on TV.tv reach out widely to all
services and all Canadian programs within those services.
8174 MS McQUEEN: But to be very clear about it,
when we say "90 per cent Canadian content", that 90 per cent will be all about
Canadian programs. None of that 90 per cent will feature international
8175 We left the 10 per cent in because there are
some wonderful programs that often come from other countries, Germany,
Australia, Britain and so on, and this would be a chance to bring them to the
attention of the viewer. These programs often don't get noticed.
8176 But 90 per cent of the material will be about
8177 Of course, one of the things that I personally
think will be most useful about this service is its media literacy aspects. When
I was involved with AGVOT and the program ratings, one of the things that we saw
over and over and over again was parents' desire to have more information about
the programming that their children might see, more ratings, more reviews, more
guidance in how to watch television.
8178 There is really no service on television now
that provides that kind of help for parents. So that is a major feature. We
would be assisted with our links to the Media Awareness Network and the
Broadcast Standards Council and other bodies in helping grow a generation that
understands the semiotics of television.
8179 It's a really interesting fact of the research
that so many young people found this so highly appealing, that's the 18 to 29
group, and my suspicion is that some of those are parents of young children in
their twenties who are really looking for that kind of advice.
8180 COMMISSIONER DEMERS: Thank
8181 If we look at the television guide component,
can you comment on how your service would differ from or improve upon the EPAs
provided by distributors at the moment?
8182 MR. MUSTOS: I will begin that answer and then
I will throw it to Ken Murphy to help us out on the technological
8183 I think the one feature that distinguishes
TV.tv from any of the other EPGs that are out there is its Canadian-first
approach. TV Guide has an EPG and I think it's worth noting that their sister
magazine, TV Guide, that's in the newsstands, is a television guide magazine
that in the course of the last 52 weeks, and we checked this, there were only
two Canadian stars who are stars of Canadian programs that have ever made it
onto the cover of TV Guide.
8184 As an American company, their desire is to
drive readership and to -- they certainly have a predominant preference to put
American stars on the cover of even the TV Guide magazines in Canada. We think
that our TV.tv service will absolutely scream Canadian stars and shows. We are
the biggest fans of Canadian television and we think that TV.tv is going to send
that signal 24 hours a day.
8185 From a technological standpoint, Ken might
want to add to this.
8186 MR. MURPHY: The first point I would like to
make is there is no notion of replacing any existing program guide on anyone's
set top. We think that choice is critical. If you think of the electronic
program guide essentially as a browser, anyone who has used a Web browser
recently knows that it's able to sift through vast amounts of data from all over
the world and surface your search results in an appropriate fashion. The
Canadian-first mandate of our search engine will provide pride of place using
Web technology as the search engine and as the navigational
8187 But, ultimately, consumers would have both
program guides available to them. So I think there perhaps might be an indirect
advantage here in that we think it would provide incentive for electronic
program guides to be as innovative, as adaptive and as focused on the Canadian
system as they possibly can be.
8188 MR. MUSTOS: I think also it might be worth
pointing out that when Kathie MacMillan was doing her research, that the
response that she got from respondents about the Canadian aspect of this service
was very appealing.
8189 MS MACMILLAN: Correct. In fact, when asked
about the specific relevance to Canadians, almost eight in ten say they agree
that TV.tv is relevant to Canada and Canadians. One-quarter strongly agree to
this, and that proportion increases significantly amongst the younger group, as
Trina already mentioned, those 18 to 29, to 35 per cent.
8190 COMMISSIONER DEMERS: Thank
8191 Another subject. The interactive revenue -- I
think we spoke about that at one point -- component here represents 51 per cent
of the total revenue.
8192 A proposition here. If we remove the
interactive component, TV.tv's PBIT margin in year 7 would approximate an 8 per
8193 In your opinion, is the proposed service
viable without its interactive component and TV Guide?
8194 MS MACMILLAN: By eliminating the revenues, we
also have include cost as well for this interactive component, which over the
seven-year period is also $7 million.
8195 COMMISSIONER DEMERS: I understand you would
not agree to a licence for TV.tv that excludes the TV Guide
8196 MS McQUEEN: No, we would not
8197 COMMISSIONER DEMERS: Back to interactivity for
a short while.
8198 Will the interactive elements be in place, for
example, the September 2001 launch?
8199 MR. MURPHY: Quite clearly, we I think are,
across the industry, achieving greater levels of confidence that Web browsing
functionality will be essentially in place September 1 and that soon thereafter,
months thereafter, there will be advanced capability.
8200 So, once again, if you think of this as a Web
browser essentially behind the Canadian promotional programming on TV.tv, that
functionality will be there day one.
8201 COMMISSIONER DEMERS: Thank
8202 Has TV.tv obtained any comments or agreements
with distributors to carry the interactive elements of this
8203 MS McQUEEN: No, it has not.
8204 COMMISSIONER DEMERS: Any additional hardware
necessary to do what you have described?
8205 MR. MURPHY: At the household level, no; and at
the head-end level we expect not.
8206 If I might just explain, the notion is we
would create a central database of all of the channel lineups, of all of the
various BDU systems. We would input that data into our database once. We would
then map onto that the various program schedules and program listings so that
essentially the set-top box filters that data according to its location and its
local channel lineup, all of which is contained in our database and really will
flow through the head-end and to the set-top box with no additional hardware
8207 COMMISSIONER DEMERS: Following what you have
said, is there sufficient memory to accommodate your program guide and the guide
that is provided right now by the distributors?
8208 MR. MURPHY: The current guide is typically a
proprietary system using resident memory on the set-top box. It's not only
impractical but it is probably impossible to consider replacing that. We don't
think that's desirable from a viewer's perspective; rather we want to provide
8209 With our Web-based approach, our Internet
protocol based approach, we don't require that resident memory that is sitting
on the box, as some have suggested.
8210 COMMISSIONER DEMERS: Thank you. Would you have
other comments that you could provide to the Commission to indicate that TV.tv
will be able to deliver the promised interactive elements? Do you have anything
to add to what you have already said?
8211 MR. MURPHY: I would draw the Commission's
attention to the recent Cable Lab's report, I believe of August 4. Lord knows,
we don't need another acronym, but that report does include something called the
Open Cable Application Platform as clearly an essential part of the standards
setting based activity that Cable Lab is involved in. Indeed it specifically
spells out that such an OCAP will enable electronic program
8212 That set of software standards will, in all
likelihood, be available around September 01, or soon thereafter. In the
meantime, though, there is clearly no question that we can deliver September 1,
2001, or tomorrow frankly, a viable, dynamic, Canadian-focused program guide and
8213 COMMISSIONER DEMERS: Thank
8214 Thank you, Madam Chair. Those are all of my
8215 THE CHAIRPERSON: Counsel...?
8216 MR. STEWART: Thank you, Madam
8217 I just want to clarify the issue of the
Internet revenues, because based on your financial projections, I believe
that -- the interactive revenues, I should say -- they are a
considerable percentage of overall revenues by year 7.
8218 If those revenues do not pan out as you
expect, then what impact, if any, will that have on the viability of this
8219 MS MOFFAT: As Ms McQueen stated earlier,
interactivity is a key and integral part of this service and business plan, and
we would look to and draw upon our experiences of our existing Web sites that we
have launched, for instance, and take that and take it further, in this service
8220 MS McQUEEN: I would add that if you look at
the year-by-year interactive revenue, you would see that the bulk of that
revenue -- I think we projected $19 million. Almost all of it is earned at
the end of the licence term, when we believe that the interactive capacity will
be significantly greater.
8221 For instance, in the first year of the licence
term we have $36,000 of interactive revenue. So it is definitely a situation in
which the unfolding of the full strengths of digital will help us to achieve
that interactive revenue.
8222 MR. STEWART: Does that coincide with any
particular increased roll-out of set-top boxes or technology
8223 MS McQUEEN: I think certainly the projection
for digital subscribers by the end of that year is at 3 million subscribers, so
that is a considerably larger number than the 359 adduced by the Chair of the
proceedings -- 359,000.
8224 MR. STEWART: Because just looking at year 4
over year 3 revenues, there is a considerable jump there for the interactive
components. Can you elaborate a bit on that?
8225 MS McQUEEN: Just to say that I think year 5 is
8226 MR. MURPHY: And I would also make reference to
my earlier comment about software standards and open platform standards. We
expect, as well, by that time that some of the things required for vibrant
e-commerce will be beginning to fall into place across Canadian
8227 That is why we have, if you will, back-end
loaded our revenue assumptions, because there are a lot of things that have to
take place for those revenues to manifest.
8228 On the other hand, we have been here before.
We faced these same kinds of questions when we were making our initial Web
investments. We have invested $15 million over the last five years, during which
time we didn't have any sense of clarity on revenue. Lord knows, there were a
lot more questions than answers. We have been able to develop that business case
successfully, and we are very, very confident that the frequency and the reach
and the value that this service will be providing to Canadians will be a
tremendous platform for our revenue assumptions.
8229 MS McQUEEN: We also take note of the fact that
merchandise related to television, whether it is Pokeroo dolls or Arthur books
or Allie McBeal pyjamas, is a very large consumer-desirable. In fact, the
merchandising of television-related material is a very strong
8230 So in the last years, when we hope we will
have e-commerce capability, we do think that merchandise associated with
television will be attractive to viewers.
8231 MR. STEWART: Without belabouring the point, I
see that your cost projections tend to be pretty flat. You are fairly confident
about those figures as well? Can you explain for the Commission why perhaps
there shouldn't be an increase in the costs, given that your revenues are
projected to increase significantly toward the end of the licence
8232 MR. MURPHY: We have essentially built a very
robust engine room now, if you will -- digital engine room -- with
extensive servers, with support technology and, fundamentally, with expertise.
We are confident that we can build on that.
8233 The incremental cost to provide these services
will be comparatively modest. That is why the line tends not to see wild
8234 Just as the initial investments we made on our
Web have served us very, very well and have allowed us to grow that business
without an enormous cost spike each time you achieve the next
8235 MS McQUEEN: As well, we don't see ourselves as
setting up warehouses and fulfilment systems for these things. We see ourselves
having a percentage of the revenues associated with the e-commerce facility. So
that, again, does not require a huge investment by us.
8236 MR. STEWART: Thank you very much, Madam Chair.
Those are my questions.
8237 THE CHAIRPERSON: Ms McQueen, I would not
describe Allie McBeal's pyjamas as a large consumer item.
--- Laughter / Rires
8238 THE CHAIRPERSON: Commissioner Demers, if it is
suitable, we will take our lunch break. We will be back at two
8239 Nous reprendrons à deux heures.
--- Upon recessing at 1235 / Suspension à 1235
--- Upon resuming at 1400 / Reprise à 1400
8240 THE CHAIRPERSON: Welcome back to our
8241 Commissioner Demers.
8242 COMMISSIONER DEMERS: Thank
8243 We are now at DGNet. My questions will cover
nature of service, programming, category 10 game shows, Canadian expenditure,
Internet, revenues, independent production and interactivity.
8244 Now, I'll start with a long-winded question,
but it may bring us back to the atmosphere of the room. Under "Nature of
Service", you describe DGNet as:
"A national specialty programming service devoted exclusively to the
fast-paced evolution of digital technology." (As
8245 In your application, you also indicate that
you will provide news, movies and mini-series and general
8246 Will all of your programming be strictly
Internet, computer and technology-driven oriented?
8247 MR. FESTINGER: Yes. Thank you.
8248 In essence, it will be. All of our programming
will relate to the new world of digital technology. That world, as we have been
exploring today, is a fairly broad world, in terms of having cultural aspects,
virtual communities, different personalities, inventions, computer games and all
manner of ideas and creativity that are expressed digitally. So we certainly can
be restricted to exploring the digital world. I just would like to point out
that the digital world is a broad one.
8249 COMMISSIONER DEMERS: So to take a closer look,
will some of your programming be broader and more
8250 MR. FESTINGER: Well, our programming will
focus on different aspects of the digital world. "Wired Women", for example,
will deal with issues -- digital issues -- that affect women in this world and
will have at least once a week an interview segment with a Canadian woman who is
a leader in the digital world. "ScavEngine" will be a game show. So there's an
entertainment base there, but the game show itself takes place on the Internet
in a virtual studio.
8251 "Digital Desk" has a number of different
components. It has a news component that relates to what is happening, what's
the news in the last 24 hours that relates to the world, whether it's the latest
about Napster or a copyright lawsuit against a Web site or a new technological
innovation that's been announced.
8252 So I don't believe our schedule is
lifestyle-based, but it really relates to the culture and technology of the
digital world. There will certainly be lifestyle aspects, but they are
8253 COMMISSIONER DEMERS: Okay.
8254 Well, starting from your answer, then, maybe I
could indicate where I'm going.
8255 In order to make the proposed nature of
service more precise, would you accept a "nature of service" definition that
replaces your wording? That the service would be devoted exclusively to the
fast-paced evolution of digital technology, would the wording that the service
would be devoted exclusively to programming related to computers, digital
technology and the Internet...?
8256 MR. FESTINGER: Yes, we would.
8257 COMMISSIONER DEMERS: Thank
8258 In programming now, you have indicated that
there would be programs in category 7(c) and 7(d) drama. So the question would
be...so you indicated that in the nature that you intend to air specials,
mini-series, made-for-tv films and theatrical feature films aired on television
-- so 7(d), here we are. In your schedule, you indicate that you intend to air
approximately 10 hours per week, or four movies per week, of subcategory 7(c)
and 7(d). Could you clarify your intensions in this regard: the type of movies
and specials that you would be showing?
8259 MR. FESTINGER: Yes, I would.
8260 If you refer to the program schedule that was
filed with the application, we have one movie a week, which is on Monday
evenings...or its first showing is on Monday evenings. And the type of movie
that we would broadcast is restricted to movies that deal with topics involving
digital technology -- movies like "Hackers", things that are very directly
related to the subject of DGNet.
8261 I should also point out that it's a very small
component of our schedule. Our sample schedule does not include any mini-series,
but we would like to have the opportunity...if there are programs that relate to
our subject-matter, that we think would be of great interest to the audience --
and this is a self-selecting audience of people who are very interested in
digital technology --- we'd like to have the opportunity to show those
8262 COMMISSIONER DEMERS: Thank
8263 So would you accept a condition of licence
limiting the number of hours of such programming.
8264 MR. FESTINGER: Yes, we would.
8265 COMMISSIONER DEMERS: Thank
8266 Game shows...sorry.
8267 MS McQUEEN: We actually did have a proposal
for you on the nature of that condition of licence, if you would like it. And
the reason we have come up with one is because a number of our themed
applications do have movies in them. And we believe very strongly that in going
to a particular niche of interest, which a channel like DGNet is, you have to
have a wide variety of expressions of that interest, whether it's dramatic,
whether it's news, current affairs and so on. So here's what we think a
condition of licence might be: first of all, we will never run a first-run
Hollywood movie; and secondly, we would limit ourselves to 10 per cent, no more
than 10 per cent, of dramatic programming of any category in a
8268 COMMISSIONER DEMERS: Thank
8269 Game shows. In your schedule, you indicate
that you will air a program called "The Games Show", a half-hour show aired
Monday to Friday. You indicate that the program, which will provide information
on the world of net games, will also allow viewers to not just play and
demonstrate the games, but to actually become part of them, to run the course,
fight the fight, as you indicated, or pilot the machine.
8270 Could you describe these programs more
8271 MR. FESTINGER: Well, "The Games Show" is an
information-based show about the world of gaming: the world of gaming on PCs,
the world of gaming on the Internet, the world of gaming on consoles, like the
Sony play station. It is an information-based show about games.
8272 Because we will have a virtual studio, we have
opportunities to demonstrate and immerse the audience in games, but it is not a
game show as we believe the Commission defines a "game show," which has a prize
at the end of it, or something like that.
8273 So no doubt this is why you didn't classify it
as a Category 10 game show.
8274 MR. FESTINGER: No.
8275 COMMISSIONER DEMERS: That is exactly
8276 MR. FESTINGER: Yes, we would think it would be
human interest or analysis.
8277 COMMISSIONER DEMERS: Thank
8278 In the previous application I didn't see
anything about filler programs, but could we clear that for each and every one
that the answer that Ms McQueen gave on the first would follow for the
eight other applications.
8279 MS McQUEEN: Yes, for the record, we will
accept a condition of licence or we will remove Category 15 from all the
applications before you.
8280 COMMISSIONER DEMERS: Thank
8281 Canadian expenditures. We did discuss that
from a corporate perspective, but to be more precise on this application, would
you be prepared to accept a condition of licence which requires that you spend
53 per cent of the previous year's advertising and subscriber revenue on
programming starting in year two?
8282 MS McQUEEN: We have committed to that. It is
on the record with you. We would also be willing to accept a different condition
of licence as discussed with you previously.
8283 COMMISSIONER DEMERS: Thank
8284 Internet revenues. On this application, you
indicate Internet revenues of $6 million over the licence term which represents
approximately 10 per cent of the overall anticipated revenue of the proposed
service in each year.
8285 If these were not achieved, this service could
conceivably run at a loss over the seven-year period?
8286 MS MOFFAT: Actually, our total Internet
revenues are $6 million, but our costs are also equivalent to that. So it is
break even during the seven-year period.
8287 COMMISSIONER DEMERS: Thank
8288 Independent production. We also raised that
point from a corporate perspective, but here you indicate that DGNet will
provide an opportunity for independent producers and particularly for
independent news media community in that it will provide these creators
unprecedented access to the conventional technology from which new fully
integrated advanced TV technologies will emerge.
8289 On the other hand, you propose to co-produce
and acquire what could be considered a relatively small amount of programming
from independent producers. You indicate that over the course of a season, this
would include 65 half-hour co-production programs and two co-produced hour-long
documentaries, and you would acquire eleven-hour long documentaries produced by
8290 How much of the programming from independent
producers would be new programming?
8291 MS McQUEEN: I will ask John to answer that
question. It does relate to a discussion that the Commission had
8292 John, do you want to start with
8293 MR. FESTINGER: All of the Canadian independent
production in Wired Women, which is a brand new show, would be new production,
and we will be commissioning two documentaries and acquiring 11 other Canadian
8294 The acquisitions will probably be new, but
some of them may not be. But certainly the two that are commissioned will be,
and I would think a preponderance of the other will be as well.
8295 COMMISSIONER DEMERS: Are you able to put a
percentage or a number of hours in your answer? It could be
8296 MS McQUEEN: Perhaps I could? I do happen to
have that number, John.
8297 First of all, let me preface by saying that
the applicant previous in this genre spoke about these services as being CNNs of
technology and indeed DGNet is very much a news-oriented kind of service. The
major amounts of original programming will come from such efforts as digital
8298 So because of our desire to do a large number
of original hours -- and I think DGNet is promising one of the highest
number of original hours, over 700 original hours, but those hours are done from
a news base which means that on this particular application, our commitment to
independent producers is lower than on others. It is about 20 per
8299 However, our Canadian program expenditures
overall are $35 million which is a substantial amount and our number of hours of
original programming is also among the highest that we are
8300 COMMISSIONER DEMERS: Thank
8301 Now, interactivity. It is not entirely clear
from your application whether you are proposing to offer access via the set-top
box to the Web-based interactivity you have described. Could you clear that
8302 MR. FESTINGER: Our application and the nature
of the service itself is, I guess to use the techie phrase, scalable. Our
intention, particularly because of the nature of this service, is to be as
advanced in the use of technology as possible. The viewers of DGNet would not
accept anything less.
8303 As you have heard yesterday and today, what we
can do today involves uses of the Internet and building a digital infrastructure
that will be adapted as boxes come on stream.
8304 So in fact, DGNet will operate in all
three -- well, actually it is two mediums, but in three different ways:
Standard television, on the Internet and through a digital box, and in terms of
using the abilities of that box.
8305 COMMISSIONER DEMERS: Thank
8306 MS McQUEEN: One of the strengths of this
application is our partnership with BCE and BCE is an equity partner with us in
only two applications, I believe, and I wondered if Jim Macdonald would like to
make some comments on the strengths that BCE might add to this
8307 MR. MACDONALD: I would be delighted to, Trina.
Thank you very much.
8308 Of course, BCE is in the technology business.
It has always been on the leading edge of technology, and as it is a company
going through many changes, it is even more so in transforming itself from its
old habits as a telephone company into a much more Internet-driven, interactive
8309 As a result, in particular the Bell Labs are
involved in all kinds of new technology, and we think that we can make a very
significant contribution in that manner with the test that we have going right
now, with VDSL as an example, and many of the new technologies that are on the
8310 So we feel that this is a very, very perfect
fit for us.
8311 COMMISSIONER DEMERS: Thank
8312 Are you planning on streaming all your
television programming on the Web site and vice versa?
8313 MR. FESTINGER: Yes, all of the programming
that obviously we have the rights to stream on the Web site and because so much
of the programming will be produced and will be ours, that will be the
preponderance of the material.
8314 COMMISSIONER DEMERS: Is your caveat something
of an important nature or percentage?
8315 MR. FESTINGER: No, no. I certainly wouldn't
want to put a percentage to it.
8316 But in acquiring foreign programming there is
always the issue of whether you are acquiring the digital rights to those
foreign programming to reproduce them on the Web.
8317 COMMISSIONER DEMERS: Thank
8318 AFV. In your application you explained that
you have plans to develop an entirely new format conversion and signal
distribution method called AFV, alternate format video, which you describe as an
open TV video network that uses non-proprietary Internet technology to transport
broadcast quality video.
8319 How will the application of this new signal
distribution method work with set-top boxes and BDUs
8320 MR. FESTINGER: When we began planning this
application, AFV was something that one of our technology people in Vancouver
was working on. It has since been accepted and has been renamed CTV
8321 The system itself is, right now, Web-based. We
have not experimented with the next generation of digital boxes in terms of
compatibility. What it allows is anybody in Canada with any kind of video camera
to send a quality of picture directly to the television station, not in real
time but in close to real time, that is limited only by the quality of the
camera, so it will not be limited by the quality of the transmission line or the
quality of the Internet connection.
8322 All anybody needs is a computer and a camera.
If the camera is television quality, then a television quality signal will be
received by DGNet without the need for satellite transmission, without the need
of costs, of very significant costs, to get someone from -- an artist, a digital
artist, from New Brunswick, for example, to send a very high quality image to
DGNet for display to Canadians.
8323 We have not yet experimented with the digital
box, but we know, because we are implementing the system currently, that it
works extremely well on a Web-based system and we are confident that we can
adapt it to digital boxes.
8324 COMMISSIONER DEMERS: Thank
8325 We have discussed in the previous application
the rollout of interactive capabilities. Do you have anything particular on this
application? In other words, what interactive capabilities are you proposing
from day one?
8326 MR. FESTINGER: We are proposing our full
complement of interactive capabilities. The issue really is: where will those
interactive capabilities be demonstrated initially?
8327 Initially, everything that we propose can be
done and will be done on the Web.
8328 As the digital boxes roll out, we will
migrate, without ever losing our Web presence, I'm sure, but we will migrate the
features to the digital box. That will, again, depend on which generation of
digital box we are talking about.
8329 So the intention -- and particularly with a
service like DGNet, which is steeped in technology -- the absolute commitment
has to be to be on the cutting edge all of the time, and that's what we intend
8330 COMMISSIONER DEMERS: Are you able to --
suppose we think of September 2001. Do you have an idea of what that technology
will be at that time, if you were licensed?
8331 MR FESTINGER: We have commited in our
application to be ready at May 1st.
8332 I wonder if Ken Murphy has some ideas about
what the technology will be like in September. That may be of assistance to the
8333 MR. MURPHY: Once again, I think there is a
recurring theme that come September 2001, essentially what will be happening is
those Canadians with digital set-top boxes, regardless of the generation, will
be able to, if you will, change channels to a Web page. What we know will have
to happen is a second generation box will be required 12 months hence, two
months hence, it's difficult to pin down, where those two programming streams in
fact are interlaced, synchronized and overlaid.
8334 So all of the features that John described
will be accessible September 2001 by, if you will, changing the channel to a Web
page and soon thereafter effectively interlacing them, if you
8335 MR. MACDONALD: Commissioner Demers, if I may
add to that? Over here -- amongst the waves.
--- Laughter / Rires
8336 MR. MACDONALD: While I can't speak for
ExpressVu I can certainly share with you that ExpressVu considers the rollout of
essentially second generation digital boxes to be absolutely critical to their
business plan. It is my understanding that they will start to do this early in
the New Year, and these will be effectively second generation boxes capable of
some of the higher levels of interactivity that Ken has talked
8337 But not to take away from the fact that it
will be a slow rollout and it will be done differently between DTH, who is 100
per cent digital today, and cable, there will be a substantial commitment
starting early in the new year.
8338 COMMISSIONER DEMERS: Thank
8339 I'm still at the interactivity, but from a
different perspective. I have asked the question of the other applicants, so I
will ask this one here. There may be a different answer.
8340 Have you spoken to distributors -- I imagine
you have one as a partner maybe -- have you spoken to distributors about
carrying the interactive elements that you proposed?
8341 MR. FESTINGER: No, we have
8342 COMMISSIONER DEMERS: Okay.
8343 Have you discussed with distributors the cost?
You haven't discussed anything with them?
8344 MR. FESTINGER: No.
8345 COMMISSIONER DEMERS: That would be the end of
my questioning, thank you, on this case.
8346 THE CHAIRPERSON: We have no questions so you
have no break.
--- Laughter / Rires
8347 COMMISSIONER DEMERS: So I can't even review my
8348 Okay. So we will now turn to Shadow TV. I have
namely the same points I raised. I will have questions on the nature of service,
competitiveness, diversity, finance, interactivity, attractiveness, contribution
to the Act.
8349 So in the case of Shadow TV, we note that you
have indicated Category 14, Infomercials, in your application, but you have not
indicated infomercial revenue in your business plan. Could you please state
whether you intend to air infomercials?
8350 MS McQUEEN: Nikki, did you want to talk about
that as part of the business plan?
8351 MS MOFFAT: Sure.
8352 Although we have included it as a category, it
is not a significant source of revenue at this time in our business plan and
that's why it's not included.
8353 COMMISSIONER DEMERS: Thank
8354 On competitiveness, the Commission is also
considering two applications for specialty licences to provide justice-type
programming. Since Shadow TV also proposes to offer some programming that could
be characterized as justice-type programming, would you consider the application
to be competitive with the justice applications?
8355 MR. MUSTOS: We don't feel that we would be
competitive with the justice applications. And I would also point out to you
that those applications did not indicate that we were a competing
8356 When you look at our representative schedule,
you will note that the proportion of programming in that schedule that would
pertain to justice-style programming is very, very small. In fact, the only
program is the one entitled, "Justice"; that is, the first program laid out in
the schedule, at six p.m.
8357 It is possible that some of the documentaries
that we might commission or acquire under the strand Case Closed might touch on
the subject of justice but, by and large, the law-and-order or justice component
of the service will be a minority contribution to the schedule.
8358 COMMISSIONER DEMERS: Thank
8359 So if both the Mystery/Suspense Channel and
the Justice Channel were licensed, do you feel that enough good programs would
be available to sustain the programming needs of two such services, on a
8360 MR. MUSTOS: Well, we think that our interest
in the justice programming will be very much linked to the mystery genre so --
in fact, our research indicated that many of the respondents to the survey felt
that a linkage between mystery and law-and-order or forensic programming was, in
fact, one of the strongest features of the Shadow application.
8361 I would also point out to you that among the
three applicants for a Mystery Channel, we are the only ones who are proposing a
limited non-fiction component that pertains to forensic and law-and-order-style
8362 I don't know if Kathie Macmillan would like to
add anything to that.
8363 MS MACMILLAN: Yes; just to say that people, in
fact, said, "I'm interested in the forensic aspect of this; it isn't available.
This sounds like a serious channel, something you can really get your teeth
into. This is something I have been waiting for. I can get mystery programming
on other channels but it isn't enough".
8364 COMMISSIONER DEMERS: Thank
8365 On diversity, as you are aware, similar
programming is already available and quite popular on conventional television,
as well as other specialty services.
8366 Please explain how the programming you are
proposing for Shadow TV will be different from comparable programming offered
8367 MR. MUSTOS: Well, I would like to point out
that I think, on the conventional side, there is nobody doing mystery
programming like CTV. We have really made an incredibly strong commitment to
this genre, in the last three years. When I cast my eye around the other
schedules of conventional networks, I did not see a lot of mystery programming
on any of the conventional networks or services.
8368 For example, I just did a quick tally of the
mystery programming that we have developed over the course of the years and then
licensed and, just in the last couple of years, we have done 12 MOWs -- I toss
that off quickly, but these are 12 high-budget prime time MOWs that probably
took a couple of years to develop and we have brought 12 of them to the CTV
prime time schedule in just the last couple of years. We have got two prime time
series; we have done a children's limited series; and we have got a whole slew
of wonderful shows in development. I think we are the network who would be most
affected by the licensing of a mystery service and I think we have a tremendous
expertise, now, to bring to Shadow that we, quite frankly, didn't have even
three years ago.
8369 Just to make a very quick sidebar on that
point. When we have been developing scripts for murder mystery, suspense or
thriller movies, it's a different animal from developing a script of a typical
drama. You have to be alert to the different kinds of cues you need to be
putting into your script so that you are giving hints, you are laying in a few
red herrings, you are not giving too much information too soon and that you are
going to offer the viewer who's really paying attention to the movie enough
clues that they can solve it on their own, by the end. This takes a real skill
-- and it's a skill that I think the UK has finally honed over the years. But I
think that, in Canada, we have not really worked in this arena until fairly
recently, in any significant degree, and I'm incredibly proud of the efforts
that we have made in this genre and I would love the opportunity to push that
further onto a digital platform.
8370 COMMISSIONER DEMERS: Thank
8371 Would there be any horror genre on your
channel, on Shadow TV?
8372 MR. MUSTOS: No; I don't think it is our
intention, at all, to put horror on Shadow.
8373 My concern, of course, does go the other way,
that we would, in fact, find mystery or thriller or suspense programming on a
horror channel, should you choose to licence one. I think that when you look at
mystery in its full state, which includes thrillers and suspense and classic
mysteries and, in our case, the non-fiction programming that we are proposing
that is forensic or judicial in nature, that's a fairly wide net. When you look
at horror it's a quite limited genre and we feel that, going the other way, we
would find high likelihood of cannibalization on a horror channel into thriller
or mystery. But we don't plan to do horror programming on
8374 COMMISSIONER DEMERS: Thank
8375 You have referred to the network, I believe.
How much overlap in programming will there be with the CTV Network
8376 MR. MUSTOS: I think the important think to
point out, in this regard, is that if you are talking about programming that is
on CTV in the same year as it would be on Shadow, I think very, very limited
amounts of CTV programming would be in the Shadow schedule.
8377 What we hope to do is reach back into
programming like the first few seasons like of Cold Squad. We are now in our
fourth successful season of that dramatic series -- it is a mystery police drama
-- and we have quite purposely not sold off the rights to the early seasons to
that show to other specialities, to a second-tier broadcaster, because we felt
that those episodes would have great value on a mystery platform like
8378 So, if we are talking about within the same
year, very, very little overlap. If we are talking about programming that had
ever appeared on CTV, we might be looking at a figure of seven hours a
8379 MS McQUEEN: I would say that this is one of
the perfect examples of synergies that you will have before you where the
conventional station has a very strong commitment to the genre and where the
assistance of a specialty channel will give an independent producer two windows.
One-stop shopping, so to speak. The producer can get a conventional licence fee
and then a second window licence fee from Shadow Television. This will make
better original drama for the priority program obligations that we have and it
would also give mystery lovers more of the genre that they love. So it is very
much a win-win situation to have the two abilities rather than -- all these
programs will have second windows somewhere. The fact that we have a channel
that can use that second window really is an advantage for both
8380 COMMISSIONER DEMERS: Thank
8381 Finance. Your application seems to be a bit
pessimistic in the number of -- in the subscriber revenue, particularly after
taking into account the popularity of foreign services, such as A&Es,
mystery/suspense and justice programming.
8382 Do you have comments on that?
8383 MS MOFFAT: If you are referring to our
subscriber levels, what we have done is looked at the forecast projected by the
CCTA and the DTH cable distributors.
8384 We have also looked at achieving an affordable
rate of 23 cents, which is the lowest rate offered in this genre, but we have
not compromised our commitment to Canadian programming, which is at 52 per cent
of our toll revenues.
8385 MS McQUEEN: Commissioner, if I read the
competitive chart rightly, in fact, we are more optimistic than our competitors
about the number of digital subscribers and we think that is based on a good,
8386 What we have done is to have the lowest rate
of each of the competitive applications. So that means our overall subscriber
revenue is, you are absolutely right, less than our competitors at the same time
that our Canadian programming expenditures are at the same level as one of our
competitors and higher than the other and we have the highest Canadian content
of all. So how do we do this? Simple. We have a slightly less rosy picture of
profitability. That's part of our commitment to building digital: strong
Canadian content; realistic subscriber rates; and an ability to get the channel
on air and stick with it for a while until we do become
8387 COMMISSIONER DEMERS: So if -- especially, you
referred to rates. So if you would not achieve the penetration levels projected,
would this rate still apply?
8388 MS McQUEEN: The
8389 COMMISSIONER DEMERS: The 25/27 cents per
subscriber, over the proposed seven-year licence.
8390 MS McQUEEN: Well, certainly, if a BDU wishes
to increase that rate, we would happily comply. But what we will have control
over and what we do commit to is that our Canadian content levels will be met no
matter what the subscriber revenue.
8391 COMMISSIONER DEMERS: Thank
8392 In fact, you are referring to Canadian
content, and it was made -- I think you made that point, Ms McQueen, at the
beginning, that it was a very important feature in your application, the fact
that Canadian content was very high in percentage. And, in fact, it is high in
most of your applications.
8393 Do you have anything more to add to why that's
the -- you have decided to go that route?
8394 MS McQUEEN: Well, it goes back to building
digital. We do believe that strong Canadian content will make these channels
different. It won't be more of the same thing. There will be diversity. There
will be viewer attractiveness. We -- you know, I just can't say it any other way
-- we do believe in Canadian television. We believe that Canadian television can
be successful with the commitment, the skills and the experience that we have to
offer with our expertise in this genre. We think we can take higher levels of
Canadian content, make that attractive to audiences and still have an affordable
rate, and it's just the strategy we bring to building digital; which is: viewer
attractiveness and a commitment.
8395 COMMISSIONER DEMERS: The availability of
Canadian content -- Canadian programs is not a question for you having set your
8396 MR. MUSTOS: No; in fact, we think that's,
again, something that Shadow will bring that will be a wonderful boon to the
industry and that is -- or to our viewers, that is -- and that is to be able to
bring to the schedule programs, Canadian programs, that aren't on T.V. right
now. Shows like "Seeing Things". Shows like "Benny Cooperman". Episodes from
"Cold Squad", from the early seasons. We are convinced that there is a wealth of
programming available, as well as an ongoing train of production and development
that will eventually make its way onto the screen at the main network
8397 COMMISSIONER DEMERS: Thank
8398 On interactivity, there are more precise
8399 Could you explain what the following aspects
of your interactive proposal will entail.
8400 Multiple-choice story endings, for
8401 MR. MUSTOS: I'm sorry. What about
8402 COMMISSIONER DEMERS: What will that entail:
multiple-choice story endings? This is part of your interactive
8403 And you also have an interactive series, which
is "Cat and Mouse", views as a detective and ad lib style games where one viewer
starts a mystery and the other adds to it.
8404 MR. MUSTOS: Right.
8405 COMMISSIONER DEMERS: Give us an overview of
8406 MR. MUSTOS: Sure. Sure.
8407 We think that the mystery genre is ideally
suited to viewer participation via interactive programming. The multiple-choice
endings that you talked about. I mean this is when you get to the end of the
murder mystery and you get to choose, as a viewer, what has actually
8408 We think that if you can also stop the show
part way through and look at an important scene from different angles, if you
can stop a show part way through and put it into slow motion so that you can
help yourself try and solve the mystery as it's unfolding before
8409 We have a brand new series called "Cat and
Mouse", as you pointed out, which we see as an entirely interactive series. It
would be a drama series and it would be a flagship show and it would be
commissioned from an independent producer.
8410 And then, in addition to that, we have a show
called "Gumshoe Inc.", which would be our magazine format show, that would
provide an opportunity for viewers to see writers of mystery fiction
interviewed, directors, to go into a chat room and discuss with them the
programs that are associated with the books, the movies. And we see ongoing
interaction with those people, too, on the Web site.
8411 MS McQUEEN: I don't know if you, Commissioner,
or any of you, ever saw the play "Tamara", which took place in a whole bunch of
different rooms and you could follow one or the other of the characters around.
That was great entertainment.
8412 For the first time, we now have the
opportunity to have that kind of entertainment on television by using the
virtual sets and different kinds of interactivity to make that
8413 There's also a popular thing that goes on at
resorts, where professional actors and customers -- someone comes in and shoots
Ivan, for example, and --
--- Laughter / Rires
8414 MS McQUEEN: -- we are all horrified,
8415 MR. MUSTOS: That's on the other
8416 MS McQUEEN: -- and then we find out that it
wasn't, of course --
8417 THE CHAIRPERSON: -- not allowed
--- Laughter / Rires
8418 COMMISSIONER DEMERS: That's on the other
--- Laughter / Rires
8419 THE CHAIRPERSON: That's what Mr. Mustos
8420 MS McQUEEN: So there are various kinds of ways
that people entertain themselves, in the mystery genre, which, now, you can
actually do through interactivity, and that's one of the great features of this
8421 COMMISSIONER DEMERS: So the subscriber will
come in through the chat room. That, in fact, is partly the answer, from the
subscriber point of view?
8422 MR. MUSTOS: Yes.
8423 THE CHAIRPERSON: You have indicated that 10
per cent of your revenues will come from e-commerce and merchandising
8424 Given that this appears to be significantly
higher than the industry, could you please explain your rationale behind these
8425 MS McQUEEN: Why don't we let Nikki take this
8426 MS MOFFAT: Our total interactive revenues over
the licence term are $6.4 million and that is comprised of sponsorship,
advertising and some e-commerce revenue. E-commerce is not significant in the
initial years of the service, but it will grow in the last three
8427 Just to give you some idea, the total revenue
in year one for interactive is $170,000 and rising to $1.4 million by the
seventh year. So it is quite reasonable when we look at our existing projections
for the Web sites that we operate today.
8428 MS McQUEEN: This is one of the lowest
interactive revenue numbers that we have put before you and I guess what puzzles
me -- the mystery for me -- is the other applicants and why they are
being so -- why they project so little interactive revenue. I noticed that
CHUM has $116,000 worth of interactive revenue over the whole time and, as I
say, this is a mystery to me.
8429 COMMISSIONER DEMERS: Thank
8430 Will the whole schedule be interactive, Shadow
8431 MR. MUSTOS: I think the answer to that would
be in varying degrees. When you have an interactive series like Cat and Mouse,
obviously the interactive component will be huge. It will also be very high in
Gumshoe Inc. When we are taking early episodes of Cold Squad or when we are
going to really outstanding foreign programming like Prime Suspect or Chillers
or the Australian series Twisted, those shows have already been made, so there
is not quite the same capability for us to design as the show is being created
these interactive components.
8432 That being said, I think with say older
episodes of Cold Squad we see things embedded in the show information, more
information about forensics if that particular episode was heavy in that, or
perhaps referring viewers to upcoming programming on DNA testing, or perhaps
there would be links to Web sites debating the usefulness of polygraph testing.
Things like that would be added into older programming, so it would perhaps have
a more limited interactive component than some of the original programming that
we are proposing.
8433 COMMISSIONER DEMERS: But on the first, most of
your schedule would be interactive?
8434 MR. MUSTOS: Yes.
8435 COMMISSIONER DEMERS: Thank
8436 What would be the impact on your business
plans of additional delays to the launching of the new technologies or on the
lower than anticipated take-up by subscribers.
8437 I will add one. Would that delay a launching
8438 MS MOFFAT: No, that would not delay our
8439 COMMISSIONER DEMERS: Then on the other points
that I have raised?
8440 MS MOFFAT: Sure. On the business plan, we
believe our assumptions are realistic and it is all predicated on the digital
roll-out and we believe that all the services we have before you will be drivers
in any digital roll-out.
8441 If subscribers levers do not reach our
expectations in our business plan, it will not change our commitment to Canadian
programming in our content levels.
8442 COMMISSIONER DEMERS: Thank
8443 MR. MUSTOS: Just one thing to add to that. I
think this is an example --
--- Laughter / Rires
8444 One of the great strengths that CTV does bring
to the Shadow application is the fact that we do have a significant inventory of
mystery programs so that if subscriber levels weren't at the level of our
projections in the business plan, we have ourselves a high level of program that
we can bring to the schedule on day one, regardless.
8445 MS McQUEEN: We would also say that our
subscriber levels aren't wildly optimistic. We are saying that we will get 45
per cent of the universe in year one, and given the fact that the people who are
going to be buying these services will have invested in the digital box, it
seems to us logical that they will want services to go along with
8446 So the penetration will, if I had to bet on
it, will probably be larger than that. However, we wanted to make sure that we
did have a realistic business plan and that we weren't counting on it in case we
were wrong. But I think most of us could argue forcefully, if not convincingly,
that we have been pretty conservative in a technology, as I say, that will be
purchased by people who presumably are getting it because they want to have
8447 MR. MUSTOS: And we hope that the Shadow
Channel will be one of the main drivers in the package. The CCTA study back in
1996 pegged a Mystery Channel as the fourth most popular genre and since 1996,
the first three have all been licensed. So we do feel quite strongly that the
mystery service, which ever one you choose, and we hope that it will be Shadow,
will be a major driver in the digital roll-out.
8448 COMMISSIONER DEMERS: Thank you. Probably a
"yes" or "no" question here.
8449 Any additional hardware necessary, or
software, to have the interactivity that you described?
8450 MR. MUSTOS: No.
8451 COMMISSIONER DEMERS: At the consumer
8452 MR. MUSTOS: No.
8453 COMMISSIONER DEMERS: Thank
8454 Any problems of interactivity with DTH or
8455 MR. MUSTOS: Ken, is there anything you want to
add to that?
8456 MR. MURPHY: No, I think we touched on some of
the differences between cable platforms and direct-to-home and wireless
platforms this morning. It is a matter of scalability and focusing the features
on the reality of that platform at that given point in time.
8457 COMMISSIONER DEMERS: Thank
8458 On attractiveness demand, the demand study
undertaken by Goldfarb indicates that there is a perception that this service
should provide more serious programming fulfilling the needs of the adult market
to a greater extent than for children.
8459 Given this, what is your rationale for
maintaining a certain emphasis on children's programming?
8460 MR. MUSTOS: Well, we feel that we can't
completely ignore that part of our audience base and we hope that some of the
programming that we are offering to children will be programs that adults and
children will share together.
8461 MS McQUEEN: Kathie, do you have anything to
add on that point?
8462 MS MACMILLAN: No. I would just say that while
it skews to adult, clearly there is an interest in programs that challenge wit
and intellect such as thrillers and classic thrillers and those are applicable
to younger-aged viewers as well.
8463 MS McQUEEN: And I guess the other thing is as
programmers we believe that if we do great children's programming people who
responded to their survey will say, "Oh, yes! This is a good
8464 COMMISSIONER DEMERS: Thank
8465 I have a last question, but an important one,
on contribution to the art and I believe in the presentation of Ms McQueen there
was reference to that. How do you propose to ensure culturally diverse
programming on this service?
8466 MR. MUSTOS: We have a number of programs
already in our arsenal that we think will contribute to the cultural diversity
of our programming schedule. Each episode of Cold Squad, for example, is a
little mini-mystery in and of itself and we have explored in previous seasons
specific cultural communities in which someone has been killed and the cultural
diversity of that cultural group has been reflected.
8467 We have another series that we have just
ordered and put into our schedule called Mysterious Ways. That series has a
black lead in it, which we are very proud of.
8468 We have also done some documentaries and some
one-half hour dramas in Halifax and in Vancouver that have dealt with the
aboriginal community, and those programs we think would be appropriate for
Shadow in that one deals with an aboriginal legend, and our documentary from
Halifax deals with the justice system in the aboriginal
8469 So we feel that our approach, generally
speaking, at CTV, is to always try and reflect cultural diversity on our screens
and the same approach that we have taken as a conventional network, we would
certainly want to continue on this digital platform.
8470 MS McQUEEN: I will add, speaking as a real
mystery lover myself, that one of the things that you notice if you look at
mystery books is that people who read them enjoy cultural differences, exotic
locations. The mystery is a great way to introduce a whole bunch of different
places or ideas or cultural issues. Through the familiar format of a mystery you
can be taken many different places.
8471 So the mystery format, there are aboriginal
detectives, there are Asian detectives, there are black detectives, there are
all kinds of characters who solve crimes, and it seems, for some reason, in the
mystery genre, that often the cultural background of the detective is part of
the fun of the mystery.
8472 COMMISSIONER DEMERS: Thank
8473 You have indicated in your application that
you would seek out authors from the different underrepresented communities of
our country for their stories. Could you tell us how you would go about
8474 MR. MUSTOS: Did you say
8475 COMMISSIONER DEMERS: No. Underrepresented
communities in order to tell their stories.
8476 MR. MUSTOS: Okay.
8477 Well, I think that, again, I'm going to refer
to track record, and I'm going to speak specifically about the development
offices that we have at CTV in Halifax, Toronto and Vancouver.
8478 We have very credible people working in our
development offices. These are really highly-respected development people that
have come from production and the like. It is their job, it's what they do every
day, to reach out into their communities at every level and try and find the
best ideas. So I think that the fact that we are I think the only network that
has this kind of on-the-ground expertise, with real money, real development
money, to backup that commitment, where we are reaching out to the communities
in which we are placed, that we hope to have the same kind of outreach happening
for the purposes of the Shadow programs.
8479 Those offices and those development people
would extend that same expertise and outreach for the benefit of Shadow, as they
have in the past to CTV and have done a spectacular job.
8480 COMMISSIONER DEMERS: Thank
8481 Thank you, Madam Chairman.
8482 THE CHAIRPERSON: The discussion with Mr.
Mustos about competitiveness, which for us I think is, to some extent, the
flipside of diversity, has made me think of a take-home question to give to all
applicants, since program producers seem to have no difficulty differentiating
between horror, murder, crime, mystery and suspense, maybe you should give the
question to your accountants.
--- Laughter / Rires
8483 THE CHAIRPERSON: The question would be, which
of your Category 1 proposals would you not implement together with any other
Category 1 proposal that we might licence?
8484 So at the last stage of the proceeding, we may
well put that question to you and see whether the distinction between murder,
crime and horror still holds.
8486 MR. STEWART: Thank you very much, Madam
8487 In your description of service you mention
Category 7(g), other drama, and yet we don't see this picked up elsewhere in the
application. Can you elaborate on what plans, if any, you have for other
8488 MR. MUSTOS: You're quite right, there is no
7(g) in our schedule. It is just a representative schedule and we included that
just for future flexibility. I think we see the vast majority of our drama
falling into 7(a), (c) and (d).
8489 MR. STEWART: Just for clarification, when you
mention that your wholesale rate is -- 23 cents is the lowest, I take it
that you are still proposing to ramp-up that wholesale rate from 23 to 27 by
year 7. There has been no change in your application from that
8490 MR. MUSTOS: No. That's right. It does go from
23 to 27. But I would like to point out that even in the seventh year of Shadow,
where we would have a wholesale rate of 27 cents, we would still be half of what
the 13th Street application is proposing in year 1.
8491 MR. STEWART: Thank you very
8492 Those are all my questions,
8493 THE CHAIRPERSON: Madam
8494 CHAIRPERSON OF THE COMMISSION: Just a little
note to say that I cannot wait for a presentation in front of the CRTC to be
fully interactive, because when you use a word that is forensic and being
francophone not understanding what it means I could have gone and found out what
--- Laughter / Rires
8495 THE CHAIRPERSON: Mr. Demers.
8496 COMMISSIONER DEMERS: And now we turn to your
application for Men's Entertainment Network. My questions are related to the
nature of programming, original series, subscriber demand and
8497 I start with the nature of
8498 Programming for and about men could be a very
broad programming concept. Please explain what makes a program of interest for
8499 My second question will be: Please expand on
what is a man's program?
--- Laughter / Rires
8500 MR. ROBINSON: We believe that there is no
dedicated service that exists right now in the Canadian broadcast system that
reflects the interests and programs that would be directed at a men's audience.
Although it's true that men watch a lot of television, there is not a dedicated
service to their interest. So what we see is kind of a multilayer
8501 First of all, that we would construct a
schedule that deals with topics of interest that we believe will be directed at
men. We would not include sports on the service. Men are more than jocks. The
nature of establishing a program listing that would attract men to the services,
the first level, so that -- to engage them in coming to the channel to observe
conversations about topics of interest to men is the first level, but with
interactivity, we hope that that's another way in which they can participate in
the topic that's being presented on the program, and beyond that through Web
sites that they can actually extend the experience and add to the experience of
watching what has been presented on TV.
8502 In the proposal in the application we have
used the word "community" quite a bit. That's what we really believe the essence
of the service is. It's a sense of community for men to go to. So just as there
is, you know, WTN for women's audience and there is YTV for youth audience, this
would be a service that men would understand, first and foremost, is dedicated
to topics of interest for them.
8503 If this service was granted and the schedule
was created, our belief is that over the course of time we would want the
audience to tell us the kinds of topics that we are featuring that are of
interest to them or not of interest to them, and we would respond to what the
audience is telling us. That is the goal or the mission of Men's Entertainment
8504 COMMISSIONER DEMERS: Your application
indicates that the target audience of the proposed service would be men 18+. I
understand what you have answered, but can you assure the CRTC that the proposed
service would represent an identifiable genre?
8505 It is probably the same question I posed to
you but in a different way, but I suppose we have to be clear on
8506 MR. ROBINSON: Again, I think that what we are
trying to create here is a sense of identity for men. There would be a tone and
attitude about this channel that would be slightly irreverent but would be
informative in ways that men aren't seeing on other channels.
8507 If I look at a couple of the proposed
programs, maybe that would help.
8508 "For Men Only", as the flagship show, would be
a more lively, engaged conversation about topics that might not be as serious as
others, where we would want to have a debate -- a dialogue -- about
that topic, enhanced again by interactivity and/or Web site.
8509 "Men, Sex and Society" would be a program
which would be more issue driven, maybe single parenting or a health issue that
might be of particular interest to men, where again there would be a sense of
awareness of the topic, a discussion about the topic, an extension of what that
might mean for individuals, and individuals would be able to enhance that
discussion through more information elsewhere.
8510 The topics that we present, we believe, would
have to be of interest from a man's point of view and would affect a man's life.
Some of it would be silly, some of it would be serious, but all of it would be
about topics that we believe more directly affect a man's day-to-day life than
8511 I might ask Kathie MacMillan if she might add
a couple of comments from the research, because I found the research very
helpful in what was of interest to men.
8512 MS MACMILLAN: Thank you. It is an interesting
question, Mr. Commissioner. I would like to start by reading to you the concept
that we presented to males, either quantitatively or qualitatively, which I
think goes to the heart of the programming description that Mr. Robinson is
8513 The Men's Entertainment Network is intended to
service both the programming needs and the interests of men, but, equally
importantly, the need for community within the male gender. It will include
drama, science, technology, sex and society, health and fitness, and
entertainment that speaks specifically to men.
8514 The top line results are: 78 per cent of men
found the concept very appealing. Amongst the 18 to 29 year olds, 46 per cent
were in the top box, saying "very appealing". They are particularly interested
in a channel about their interests. I quote: "There is already a women's
channel, so why not?" "I don't like sports, but I would love to see a men's
channel with more than sports. This could deal with serious issues -- men's
issues." "Even though I watch a lot of TV, I would fit this channel into my
schedule. This is the ultimate channel. Where do I sign up?"
8515 Both quantitative and qualitative respondents
said that the Men's Entertainment Network would provide programs not available
elsewhere, particularly on broadcast.
8516 Seventy-five per cent of quantitative
respondents found the programming concept unique. Specifically, there is
intrigue over the focus on men and men's issues. It is seen as real-live
television for men, with example issues of health, sexuality, relationships and
recreation. This is programming not found elsewhere.
8517 The potential for interactivity would also
increase the uniqueness and was seen as being a plus behind it, as it would
allow viewers to get involved in program content, such as question and answer
periods, real-time chats and up-to-the-minute tickers.
8518 One respondent said: "This would be my go-to
8519 They are very, very positive and behind
8520 COMMISSIONER DEMERS: Thank you. They all seem
to understand what the men's genre is.
--- Laughter / Rires
8521 COMMISSIONER DEMERS: We will take it from
another point of view.
8522 Would the Men's Entertainment Network use
programming from The Comedy Network, The Discovery Channel, The Outdoor Life
Channel or any other specialty services in which CTV is
8523 MR. ROBINSON: I wouldn't say categorically no,
but I think the design of this channel is to find programs that currently aren't
available elsewhere. A number of the programs suggested in the application are
unique -- are original to our particular broadcast
8524 Again, the idea is that men have a place to go
to hear topics of interest to them, topics of discussion, to find out more
information about areas that would be of concern to men.
8525 A lot of the programs described in the
schedule are more analysis and interpretation and human interest -- sort of
leisure. Those types of programs we don't carry currently on a lot of CTV
8526 In the application we have asked for the
comedy series as a program category. Conceptually what we have tried to
establish is sort of a weekday, more informative schedule, where there are
"how-to" programs and human interest programs and magazine-style programs, and
on the weekend more entertainment shows.
8527 So I could see there being some comedy shows
on the weekend, as there would be some movies on the weekend.
8528 But as I think was indicated in this morning's
dialogue, one of the key points to these services is to find original
programming that will engage the audience. Having gone through The Comedy
Network launch, you have to find at least one show that people identify as being
your flagship show, and that will bring them to see other experiences as well.
But we really need to have at least one -- certainly we would prefer more
than one -- show which you can identify as your own.
8529 In designing the schedule for MEN, we wanted
to create as many new opportunities as possible.
8530 COMMISSIONER DEMERS: If we were thinking of
the services that CTV has already, you don't have in mind a program that has
some of the features that you think would be in a men's program, or in one of
the men's programs that you have listed in your application?
8531 MR. ROBINSON: Again, on the comedy front there
may be programs that might work on several platforms. We have used Red Green as
an example in our presentation because it is sort of a unique show about men.
But Red Green runs currently on the CBC and The Comedy Network. I wouldn't
necessarily, from a programming point of view, want to add it to a third
8532 As you were speaking -- and I didn't
think I would be raising Tom Green's name again at the hearing, but I am going
8533 There was a special that ran last week of the
Tom Green series that was called "The Tom Green Cancer Special". As you may
know, he had testicular cancer about three months ago. It was devastating to
him, being 29 years old.
8534 The hour special was certainly not a barrel of
laughs. It was very serious about what he went through, and his way of dealing
with it was to take cameras with him as he went through the ordeal of the
operation and the recovery. But it made a very important point to young men
about: This is a condition that you need to be aware of and that you should know
more about. You need to take your own measures to make sure that you are
preventing this from happening to you.
8535 Awareness and information is kind of how I
would point to the importance of that show and how it might apply to men on the
Men's Entertainment Network.
8536 That is an example. But, in principle, I again
go back to the notion that the channel needs to create its own identity, its own
attitude, its own presentation style. It needs to become familiar to the
audience, that men would go to that as experience. And the more originality you
have in the experience, the better off the service is and the more attractive it
8537 COMMISSIONER DEMERS: Thank
8538 So you understand that if the Commission were
to license your specialty, it would have, in a sense, to give it some kind of
definition and some kind of a framework, so these questions we're trying to
explore where and inside what kind of a definition you would
8539 "Original series," the application lists a
number of original series that would be carried on the proposed service without
making a specific commitment as to the number of original hours that would be
produced. Could you please specify how many hours the original series listed in
this application represent?
8540 MR. ROBINSON: In the application it represents
close to 750 hours, I believe. And just to be clear from the presentation, at
least half of our original programming would come from independent producers.
But we think, again, that a weekday daily magazine-style show is an important
kind of show for this service and once you do weekday five days a week, multiply
it by the number of weeks a year, you get the high volume and there would be a
large number of original hours, certainly, as part of this
8541 COMMISSIONER DEMERS: At the initial stage of
the specialty, how much of the production would be in house?
8542 MR. ROBINSON: Well, I mean, notionally, with a
minimum of a half of the original production committed to independent producers
-- you could say "half" -- so there is an advantage to in house, clearly,
because we have infrastructures that help all of that happen. And when you are
doing high volume, it's helpful. We've, you know, done weekday shows before in
high volume, but, you know, I just want to emphasize again our commitment is to
ensuring that we are contributing to the independent production sector by a
minimum of a half of our regional hours each year.
8543 COMMISSIONER DEMERS: And that may start right
at the beginning, or close to the beginning of...?
8544 MR. ROBINSON: That would start at the
8545 COMMISSIONER DEMERS: Thank
8546 On the subscriber demand, we were talking
about that. Do you have any indication of the level of subscriber demand for the
proposed service, at the proposed rate, for year 1 and 2 of 20 cents per
subscriber per month?
8547 MR. MOFFAT: If I could just make a reference
to our business plan, in the year 1 we have total subscribers of 700,000, and
rising to just over 3.1 million by the seventh year of the
8548 COMMISSIONER DEMERS: Thank
8549 And we get to interactivity. Here, again, you
have proposed a number of interactive elements in your application, both through
the Internet and the set-up box. What impact would you expect interactive
subscriber input to have on the programming development of MEN Entertainment
Network? Now, you've touched on that already, but maybe...
8550 MR. ROBINSON: Again, if I use "For Men Only"
as the example, where there would be a lively debate about a particular topic,
if I was a member of the home audience and wanted to participate in that
conversation, I could do that in a number of ways.
8551 From the video this morning, if you'll recall,
there was also the opportunity to respond to questions that were prompted by the
icon on the screen. That's another way in which I could participate as a member
of the home audience. And beyond that, if there was a topic in which I wanted
more information or I wanted to, you know, go to a chat room, where I could
extend the conversation about that topic, then the Web site would certainly be a
place that would allow that to happen.
8552 So, you know, the philosophy on this channel
is to keep enriching the conversation. So that I can watch a conversation
happening, I can then participate in the conversation, and then, hopefully, I
could extend the conversation in ways that would either make me more informed or
allow me to vent whatever I wanted to vent, but a way to, you know, continue
8553 And the features that we've talked about today
-- not to repeat what everyone has said -- but would be available by 2001,
and shortly thereafter at a launch of September 1st.
8554 COMMISSIONER DEMERS: Thank
8555 In general, and certainly, I imagine, at the
beginning, your viewer/subscriber would watch television and watch the...or be
on the computer at the same time?
8556 MR. ROBINSON: If that's the technology that
was available on September 1st, 2001, yes. That's the way my son watches TV
right now. But eventually, when those two merge, then the experience would be
8557 COMMISSIONER DEMERS: Thank
8558 And some questions that I've asked before on
other applications. Was there any consultation with distributors on this
8559 MR. ROBINSON: No, there was
8560 COMMISSIONER DEMERS: Thank
8561 I think I understood and understand you as
saying that the interactivity that we have discussed all along is the same type
of interactivity that you propose in your application, so that the questions
I've asked on that point, the development of interactivity, applies here
8562 MR. ROBINSON: That's correct.
8563 COMMISSIONER DEMERS: Thank
8564 That would be the end of my questioning, Madam
8565 THE CHAIRPERSON: I have just one small
question. This seems to have been taken from your application, calling it as
"Revival of Men Being Men" and I want to know if Mr. Mustos would consider that
a horror show?
--- Laughter / Rires
8566 MR. MUSTOS: I guess the question is: would
--- Laughter / Rires
8567 THE CHAIRPERSON: Commissioner
8568 COMMISSIONER DEMERS: So we move over to
Discovery Health Channel, our second-to-last together. And my questions relate
to nature of programming, Canadian programming...nature of service, Canadian
programming and interactivity.
8569 Nature of program, nature of service, could
you please specify which subcategory...okay, in your application you indicate
that programming would come from category 7 -- drama, in general. Could you
please specify which subcategories you propose to include in your nature of
8570 MR. MURPHY: Certainly. We propose to include a
category 7(a), 7(c) and 7(d).
8571 COMMISSIONER DEMERS: Okay, ongoing dramatic
series, 7(c), specials, mini-series, made-for-televisions films. Thank
8572 You indicate that the service will broadcast a
limited amount of drama: films and dramatic series. Would you accept limits for
this category as a condition of licence?
8573 MS McQUEEN: Yes, we would. And the condition
of licence we propose is the following:
8574 First, we will not run any first-run Hollywood
feature movies; second, all drama that we run will be directly related to the
genre, that is health; and thirdly, that we will limit such programming to a
maximum of 10 per cent of the service.
8575 And if we are on the subject of drama, there
were views expressed in the first application about the relevance of drama to a
health channel. We have some views on that ourselves, if it would assist you in
8576 COMMISSIONER DEMERS:
8577 MS McQUEEN: Well first, if I may talk a little
bit. Paul Lewis, who is the Vice-President of Programming at
Discovery -- Ken Murphy will want to talk about this as
well -- was explaining to me last night some science literacy studies
that he had noticed, and Paul I wonder if you could explain.
8578 MR. LEWIS: Sure. I will keep coming back to
the word "science" as I talk about this channel, but we did a scientific study,
along with the Royal Society of Canada, and the Ontario Science Centre, and it
was a literacy survey that was built on another study that was done by the
University of Calgary and what we were examining is how people gain their
science literacy and what the survey strongly indicated was that people tend to
get a lot of their information not just through documentaries but significantly
through feature films.
8579 To give you an example of this, Jurassic Park.
After Jurassic Park came out people understood a lot more about dinosaurs. They
understood a lot of basic science questions about dinosaurs that they didn't
understand before that movie came out.
8580 So this is a very good example of how film and
drama can really raise public awareness of science issues. And I can certainly
assure the Commission that we would not be broadcasting films like Frankenstein
and presenting them as, you know, this is the state of medical technology
--- Laughter / Rires
8581 Maybe ten years from now, but not
8582 MR. MURPHY: I might add that we have proposed
a fact or fiction panel discussion that would follow any feature airing
where -- a reference was made yesterday, for instance, to a creative or
artistic licence that may serve to distort some very important medical or
scientific facts, and we can, I think, serve the audience very, very well by
adding that fact or fiction debate and discussion and clarification, if
8583 The other point I would like to make --
and let me assure you that we have no intention whatsoever -- sorry,
Ed -- of putting Tom Green on the Health Channel. But the point that Ed
just made I think is a very important one, where indeed if you saw that special
on testicular cancer you learned a lot, and you learned a lot in a way that
perhaps is surprising when you consider that indeed a comedy show imparted some
important medical information.
8584 So our intention here is not to somehow load
it up with drama, but to use drama in a very selective and important way to
inform and raise awareness of health issues, and drama can be very effective in
8585 MS McQUEEN: Our belief is that if you really
understand how science is communicated you would want to have drama on a health
channel. Northrop Frye once remarked that the dramatic form is always more
satisfying to the imagination than the documentary form and the imaginative
process is what makes us eager to learn. Once our imagination is aroused, then
we are eager to learn.
8586 I would also point out that programs like ER
receive continuing appeals from medical associations and research associations
and organizations like the Kidney Foundation that their specific interest in
health be exposed on that show because they have found that that leads to what
Paul was saying, a dramatic awareness and interest in learning the facts about
8587 We strongly believe that medicine is not a
lifestyle. We may choose to have a healthy lifestyle but at the bottom medicine
is science. We will choose a healthy lifestyle more easily if we understand the
basic principles of medicine and the basic principles of
8588 One of the expertise we have is being able to
communicate scientific information not only with credibility, but with
accessibility. So that although physics and chemistry may not be everybody's
idea of a good time, I would say that the Discovery Channel has been able to
make them so for large numbers of people.
8589 Our belief is that a Health Channel should be
founded on a respect for and a grounding in science.
8590 COMMISSIONER DEMERS: Thank
8591 On Canadian programming, and I think this one
here is 70 per cent, is it?
8592 MS McQUEEN: Yes.
8593 COMMISSIONER DEMERS: You have proposed quite a
substantial commitment to Canadian programming. Is there enough Canadian content
available -- I posed this question earlier -- in this type of
programming to enable you to meet these commitments especially in the early
years of your licence term?
8594 MR. MURPHY: Absolutely. I would like to pick
up on a point made earlier. We are building our health schedule around a
flagship program Health Beat, a one hour per day vehicle for dealing in a timely
fashion with accurate, credible information that is of particular relevance and
focused on Canadian health needs, and that really provides the
8595 We are proposing, of course, that that would
be an in-house program built upon our core scientific and storytelling expertise
and that would represent, for instance, 250 original hours a year as the anchor
for our health schedule. We, in addition, are proposing to commission and
acquire a whole series of very exciting documentaries. We have extensive
experience with, and a track record with, the independent
8596 There is a high degree of interest in this
genre and a growing expertise and we are absolutely confident that there will
good, high-quality program supply from Canadian sources in-house and
independent, and we are fortunate to have our partner in Discovery Communication
International in the process of rolling out the Discovery Health Channel around
the world at this point as a fabulous and indeed an unprecedented source of
high-quality medical and health programming.
8597 MR. LEWIS: Can I just add that when we started
the Discovery Channel six years ago, a lot of people thought that the idea of
trying to fill an entire network of science, nature and technology programming,
let alone such a high percentage of Canadian science programming, was impossible
and a lot of people thought especially we were -- the word "nuts" was
used a lot of times when we told them we were going to be doing a daily science
program from all around the world.
8598 Broadcasters with a lot more resources than we
had thought it was an impossible job and we have proven over the last five and a
half years that we are able to do it and we have superseded our own
8599 MS MACMILLAN: Just one last point in terms of
the demand for Canadian content.
8600 Within the research an overwhelming 89 per
cent agreed that Discovery Health would provide information relevant to Canada
and Canadians and the focus group participants believe that the Canadian
perspective on health should not be ignored and that the Discovery Health
Channel should reflect Canadian views on health and provide programming geared
toward the Canadian lifestyle. Amongst women, that number increases to 91 per
8601 Thank you.
8602 MR. MURPHY: And if I just might add the
respondents repeatedly indicated that they saw the Discovery Health Channel as
very much an anchor for a programming package and that the Discovery Health
Channel would indeed drive demand for overall digital programming, but in a very
8603 MR. MACDONALD: Commissioner Demers, perhaps I
could add a comment as a partner in this channel.
8604 During the last round of specialties, I had
the misfortune of being on the other side of Comedy and you will recall that the
Comedy Channel made the first, and at that time unprecedented, commitment in the
70 per cent range -- 72 per cent exactly, as I
8605 We challenged Mr. Fecan on that quite
aggressively, I might add, and he explained that he is going to be nimble and
indeed they have been nimble, and the Comedy Channel has fulfilled its
obligations, has produced one of the best specialties that are out there, and I
bring that up only because it is really a testament to one of the points
underlying everything here, and that is doability, and the resources and the
management team to get it done.
8606 So I have every confidence in saying to you
that having worked with this team, and certainly having been on the other side
of this team previously, that if they say that there is the programming to get
it done, it will get done.
8607 COMMISSIONER DEMERS: Thank
8608 Your programming will be on a six-hour
8609 MR. MURPHY: That's correct,
8610 COMMISSIONER DEMERS: On a particular program
wheel, how much or how many repeats would there be either from a weekly
perspective or an annual perspective?
8611 MR. MURPHY: I'm going to ask Paul Lewis in a
moment to speak to that, and he can provide a level of detail to any follow-up
questions you might have.
8612 But I want to make one point about repeats.
Based upon our experience with Discovery Channel and @discovery.ca in
particular, it is frequent to have a higher audience at our 11 o'clock airing
than for our 7 o'clock airing. That is a further reinforcement that perhaps the
word "repeat" historically has been pejorative and speaks to dilution of the
value of a program schedule.
8613 But in specialty, and I think particularly in
a genre like health, it's really a matter of convenience. You don't want to
overdo it. But to have a reasonable repeat factor to give people the highest
degree of access to relevant programming, I think is a true asset. I think we
have struck our balance pretty good between original and alternative viewing
8614 Paul, maybe you can just speak to some of the
8615 MR. LEWIS: Well, scheduling isn't a
--- Laughter / Rires
8616 MR. LEWIS: When we have repeated a program for
the fourth time and it does better than the premier episode, it leaves us all
scratching our heads. It's a mystery.
8617 Anyway, we are looking at a repeat factor in
the health schedule of probably about -- each program would air about three or
four times a year over the course of the schedule. As Ken has said, that's not
that different from the Discovery Channel schedule. It works very well.
Depending on the program and the mood of the audience, the repeat factor doesn't
seem to have a large impact on dwindling audiences.
8618 COMMISSIONER DEMERS: So in fact, it is not an
impediment to attractiveness?
8619 MR. MURPHY: That's been our experience,
8620 COMMISSIONER DEMERS: Thank
8621 In your application you state that Discovery
is looking forward to working with Canadian independent freelance
8622 Approximately what proportion of your
programming budget will be dedicated to independent production?
8623 MR. MURPHY: I will respond by saying that one
of the key pillars of the success of the Discovery Channel has been our reliance
on the independent community. We have taken our commitment very, very seriously
and have spent with them over $45 million over the last five
8624 As we looked to develop the Health Channel
service, that commitment will continue. We are prepared to commit 40 per cent of
our Canadian programming expenditures to the independent community.
--- Pause / Pause
8625 COMMISSIONER DEMERS: I have already had a
chance to discuss the interactivity and other areas. There is nothing here to be
added or to be of particular interest to this channel?
8626 MR. MURPHY: No. And I think you have heard a
refrain that our genres are particularly appropriate for interactivity, but I do
feel compelled to make a similar comment with respect to health where so often
there are technological terms or biological terms that are used in an interview
or a documentary for which interactive explanations can be, I think,
8627 As well, I think links. There is an almost
insatiable appetite for relevant and accurate health information and I think we
can play a particularly useful role not in linking to the almost overwhelming
amount of health information on the Internet but in fact to act much more as a
filter, to add value, if you will, by linking to credible, accurate, relevant
and Canadian sources of digital information and I think that is what resonates
for me most with our interactive strategy for the Health
8628 COMMISSIONER DEMERS: Thank
8629 As to conversations with distributors, you
will give the same answer?
8630 MR. MURPHY: We have not had specific
conversations with the distribution community.
8631 COMMISSIONER DEMERS: Thank
8632 Additional hardware, the same
8633 MR. MURPHY: Correct.
8634 COMMISSIONER DEMERS: Thank
8635 I have no further questions,
8636 THE CHAIRPERSON: Commissioner
8637 COMMISSIONER WILSON: Just a quick question
about what proportion of your programming will come from Discovery in the
8638 They have a health channel in the U.S., do
8639 MR. MURPHY: Yes, they do. The expect to have
20 million subscribers by the end of this year, and as we speak they are
launching in Germany, the U.K., Latin America and other markets around the
8640 I'm going to ask Paul Lewis to speak to the
specifics of the role that Discovery International programming will
8641 However, I would just like to underline that
last point, that one of the strengths of the programming that will be available
to us from Discovery International is that international
8642 Paul, in fact, is just back from a trip
8643 COMMISSIONER WILSON: I'm not suggesting that
it's not. I'm just curious about the proportions.
8644 MR. MURPHY: But there really is much more
programming than U.S.-based programming available to us.
8646 COMMISSIONER WILSON: Right. Just as it is on
Discovery Channel right now.
8647 MR. MURPHY: Correct.
8649 MR. LEWIS: Well, we have in the schedule
probably about five or six hours of programming from our partners at Discovery
International. You know, as we said, this is not just programming from the U.S.,
this is programming from Discovery channels around the world, and that's really
bringing us quite diversity and ideas and ways of approaching health from
different cultures, which I think is important.
8650 The other side of this, I might add, is that
the Discovery International Network is extremely anxious to get our programming.
When I was in Germany and talking to my colleagues at Discovery Germany and
Discovery U.K., they kept saying to me: When are you going on the air? When are
you going on the air? They need programming. Most importantly, they were looking
for programming that does not come from the United States. It has a Canadian
voice to it because a lot of the health concerns, you know, the more socialized
view of medicine is much more in keeping with a lot of these other
8651 So we have two ways of exchanging material,
which gives a wonderful opportunity for independent producers here for us to
hook them up with other broadcasters around the world and give them another
vehicle for their programs.
8652 COMMISSIONER WILSON: Just out of curiosity,
the Discovery channels in the U.K. and in Germany, are they built around similar
kinds of models as the channel that you are proposing, whereby they are
essentially like a U.K. channel and they import some programming from Discovery
8653 MR. MURPHY: That's correct. And they also
share the challenges inherent in a digital environment where one has to provide
the kind of attractive evocative and accurate programming that will drive demand
for the universe and then ultimately subscription, and the desire and the
attractiveness therefore of sharing programming is particularly attractive
because of that digital fact.
8654 I would just like to put Paul's response on
five or six hours in an annual context.
8655 We expect that the total DCI programming slate
would be around 100 to 110 hours per year of original hours.
8656 COMMISSIONER WILSON: So that's a fairly small
8657 MR. MURPHY: That's correct.
8658 COMMISSIONER WILSON: Okay. Thank
8659 THE CHAIRPERSON: No more questions so go
8660 COMMISSIONER DEMERS: No questions from
8661 THE CHAIRPERSON: I'm sure that by now
everybody is wondering -- we all know what we are supposed to do here, but how
do we make it interesting.
--- Laughter / Rires
8662 THE CHAIRPERSON: I'm not going to tell you the
lead-up to that joke in case my grandchildren are required by their parents to
watch CPAC at least half an hour a day.
--- Laughter / Rires
8663 COMMISSIONER DEMERS: Well, we are in the
Exploration Network. That should bring some interest to the young people
8664 So I will have some questions on subscription
revenue, expenses, profitability, interactivity, nature of service, diversity,
competitiveness. Let me start with subscription revenues, penetration levels,
8665 A review of Goldfarb's study indicates that
only 9 per cent would be strongly likely to pay for the service. The research
conducted by Goldfarb appears to be silent on the monthly rate for this type of
service when willingness to pay is measured. Can you tell us how you have linked
your research studies with the subscription revenue protections?
8666 MR. MURPHY: Just before I ask Kathie to
respond in detail to that point, one of the challenges we face as programmers is
we are in a position to design a service around wholesale fees. It is very
difficult for us to predict how our services might be packaged and priced by the
distributor. So absent that kind of information, it's difficult to get at the
kind of information you are seeking. Instead, we really tried to drill down on
the attractiveness of the concept and the genre of truly focusing on Canada and
showcasing the geography and people of Canada.
8667 Just before I ask Kathie to fill in some
details there, the one striking bit of information that Canadians told us was
the more they learned about Exploration Network the more they were fascinated by
the service and were truly engaged by it. I think it really captured their
8668 But perhaps Kathie can fill in some
8669 MS MACMILLAN: Mr. Commissioner, the issue
around pricing is a complex and scientific issue, and when we looked at it
around the type of demand for these types of services and the fact that we are
trying to come up with programming that will ultimately drive consumers to
digital services, we elected that in the qualitative we would ask about the
ability to pay an additional price and we would probe the respondents to find
out what sort of price they would immediately come up with.
8670 But on the quantitative, we were highly
reticent to put down a price point because consumers' experience in Canada today
is predominately that you buy packaged services and, depending upon your cable
company, those packaged prices can change fairly dramatically. So we were
unwilling to say for a 50 cent additional charge or a $1 additional charge on a
8671 Accordingly, we asked: What would be your
willingness to pay just at an additional charge? Therefore, it would be in the
mind of the consumer what that additional charge would be.
8672 When we talked about a qualitative leap,
people came back and said they would be willing to pay up to $5 for this channel
on its own, but they also expected it to be part of a package, and the
willingness to pay more than the $5 would also depend on the quality of the
package and the other types of programming found.
8673 With 9 per cent saying "strongly likely",
again, only having heard a concept read to them over the telephone and not being
able to enjoy the visual portions of the concept and the visual medium, we would
say it is a strong response. However, I would turn to Nikki in terms of saying
how the actual demand was calculated.
8674 MS MOFFAT: Mr. Commissioner, we took a
consistent approach in terms of our packaging with all our services. Our year 1
subscribers are 729,000, rising to 3.1 million by the seventh
8675 Again, our wholesale fees are 15 cents in the
first year, rising to 20 cents in the last year of the licence.
8676 COMMISSIONER DEMERS: Thank
8677 Just a point of clarification, Madam
Macmillan. The questions on this channel were drafted in the same way, or
presented in the same way, as for all the other applications that are in front
8678 MS MACMILLAN: That is correct.
8679 COMMISSIONER DEMERS: Thank
8680 On expenses and profitability, according to
your business plan, over a 7 year proposed licence term your total expenses
would account for 99 per cent of the total revenue. Positive profitability is
expected to be reached in year 6.
8681 Don't you expect any synergies to be derived
from operating multiple specialty services?
8682 I will give it to you in bulk.
8683 If the Commission were to license more than
one of your proposed digital Category 1 applications, how would this affect your
business plan or profitability level?
8684 MR. MURPHY: I will ask Nikki Moffat to respond
to that question, please.
8685 MS MOFFAT: Each of the services before you
today is built on stand-alone with synergies from our existing services. We have
managed to keep our operating costs at a minimum by building on the existing
infrastructure at CTV, and that has allowed us to contribute more money to
Canadian programming than some of the other services before you.
8686 In terms of break-even, we do break even at
the last year of the licence term.
8687 As Ms McQueen noted earlier, not all services
are going to be as profitable as we would like, but we do have a commitment to
this service and we feel it is very attractive.
8688 MS McQUEEN: If there were synergies, I think
one of the things we would do with this business plan is have additional
marketing of the digital tier and our own digital services. So that is how we
would go toward them. But it is kind of hard to know if there are synergies,
unless you tell us right now that these are the channels you are thinking of
--- Laughter / Rires
8689 MR. MURPHY: I would like to speak, though, to
one set of synergies that we did plan around, and that is our association with
"Canadian Geographic Magazine". They are experts in this field, and I think with
their expertise in the magazine industry, and with their publication and our
science background, we assumed that we would be jointly developing stories and
going out and acquiring those stories to really showcase Canada across multiple
platforms, including print in this case. So that was one set of cost-saving
assumptions that we did factor in.
8690 COMMISSIONER DEMERS: Thank you. We will get to
that point also.
8691 On interactivity, is there anything else to
8692 Mr. Murphy or somebody else?
8693 MR. MURPHY: No. I would like to,
though -- and, again, I had to promise all of my colleagues not to wave my
--- Laughter / Rires
8694 MR. MURPHY: We have seen for years now a
series of cameras with a very important function. They are pointing at highways
and they are pointing at parking lots for security, and so forth. One of the
things that is so very, very exciting about the notion behind Exploration
Network, when you combine it with some of the things that we heard about earlier
with respect to AFV, or alternative format video, is the prospect that now we
can have a series of cameras feeding real-time daily into Exploration Central or
Exploration Today, focusing on this great and vast land of ours; and beautiful
pictures, not clogged highways. That is the one point I would like to make that
distinguishes Exploration Network.
8695 COMMISSIONER DEMERS: Thank
8696 I just have a particular question -- the
last one -- on interactivity.
8697 Could you please describe the assumption
underlying your projected interactive revenue on this application? I understand
that it is 17 per cent.
8698 MS MOFFAT: Our total interactive revenue
during the 7 year period is $7 million. In the first year it is $400,000, rising
to $1.6 million by the seventh year of the licence term.
8699 Again, we looked at our existing services and
the Web sites that we operate, and these revenue streams coming in are from
sponsorship, advertising and some e-commerce transactions, but not
8700 COMMISSIONER DEMERS: Thank
8701 The nature of service: diversity
competitiveness. Mr. Murphy, you spoke about your relationship with the Royal
Canadian Geographic Society and "Canadian Geographic Magazine", and you stressed
the fact that your partnership would be in programming. Would there be other
areas of partnership, financial or any other? No?
8702 MR. MURPHY: No. We are really focused on
showcasing Canada to Canadians, rather than a corporate formal
8703 With respect to diversity, though, we are very
excited about building on CTV's relationship with APTN, because we think that
they can play a key role in bringing some of the more remote regions of the
country to prominence and, again, to showcase.
8704 You may have seen in our application the
notion of bringing a series of digital cameras -- cameras that produce
absolutely stunning images for under $5,000; images that would have cost
$100,000 even five years ago for similar technology.
8705 The opportunity now to work with APTN and get
those cameras out into the field is very, very exciting indeed.
8706 COMMISSIONER DEMERS: Thank
8707 How much programming overlap would there be
between Exploration Network and Outdoor Life Network or
8708 MR. MURPHY: Again, I will ask Paul Lewis to
fill in some of the details.
8709 Just before I do that, though, one of things
that we have found at Discovery Channel is a program like "Great Canadian
Parks", to our eternal amazement, has almost perpetual audience interest. Two
years after its debut, it can get a higher audience than when it first
premiered. And we have, through that series, looked at 15 per cent of the parks
in Canada. So we see a tremendous opportunity to move some of that programming
from Discovery Channel to Exploration Network.
8711 MR. LEWIS: A minority of the programming on
the Exploration Network would come from Discovery Channel. In fact, in the
proposed schedule we have here, there's no programming, for example, from the
Outdoor Life Network. I wouldn't see that kind of crossover happening. But some
from Discovery Channel, from programs that have been around since Discovery was
on the air, so some of these episodes haven't been seen in several years on the
Discovery Channel, programs, as Ken said, is "Great Canadian Parks" and "Storm
8712 So all told, we're probably looking at perhaps
about, you know, six hours of programming a week in the wheel that might come
from Discovery Channel. But that's a small amount of
8713 MR. MURPHY: We would in fact expect that it
would be less than 10 per cent from Discovery Channel. And, as Paul has
indicated, we have no intension of looking at programming from Outdoor
8714 COMMISSIONER DEMERS: Thank
8715 We note that you are involved in a category 1
travel application with BCE -- Travel TV. It appears that some of the proposed
programming on Exploration Network may overlap with applications such as Travel
TV. Could you please comment on where you can see potential
8716 MR. MURPHY: Well, I think there is a
fundamental distinction between the two services. Exploration Network will have
a profound basis in science and demographics and anthropology and hydrology and
so forth, and that, really, is the foundation, based upon our expertise in those
areas. And that, really, is the characteristic of Exploration Network. So I
don't think there's really any confusion between the two.
8717 And I might add that in our research not a
single Canadian saw any overlap whatsoever between a travel service -- any
travel service -- and Exploration Network.
8718 COMMISSIONER DEMERS: Thank
8719 MR. MACDONALD: Commissioner Demers, we --
putting on my Travel Channel hat for a second -- look very closely at the
schedule and did talk to the folks about overlapping program and were satisfied
that there wasn't any.
8720 And second of all, I think I'm correct in
saying certainly we did not intervene, nor do I think any of the other travel
applicants did. So I think that that provides perhaps some assurance that
there's a limited overlap, at least as from a competitive point of view, as we
8721 MR. LEWIS: I think the best way to
differentiate travel from exploration is to say that our storytellers will be
explorers, not tourists, and they certainly won't be looking for travel deals.
They'll be on expeditions, stories of survival.
8722 COMMISSIONER DEMERS: Thank
8723 If the CRTC were to license a travel
application, other than Travel TV, would you anticipate this licence to be
competitive or complementary with Exploration Network?
8724 MR. MURPHY: We would not see them at all as
8725 COMMISSIONER DEMERS: Thank
8726 Under the "New Program Category" definition,
category 11 is described as "programs primarily about the world of entertainment
and its people." Please describe how this category fits in your proposed
8727 MR. MURPHY: Fundamentally, we are part of
where we live, we're part of a geography. We're influenced by it and we, in
turn, influence it. And as it's very, very difficult to consider an exciting and
dynamic exploration of Canada without looking at Canadians. So our intention was
really to include the human element, if you will the human geography, of Canada,
and that is the principle behind that category.
8728 MR. LEWIS: Perhaps if I could give an example
here. I had -- this was a little while ago -- a husband-and-wife team in my
office who were planning to canoe through the Northwest Passage. And as crazy as
that might sound, they were extremely serious about this. And it really captured
the spirit of Canadians in exploration. And I think that's a really important
facet of the channel: was capturing not just the spirit of the country, but the
people, as they explore their country.
8729 COMMISSIONER DEMERS: Thank you. Thank you very
much to your team, Mr. Fecan.
8730 Madam Chair, this ends my
8731 THE CHAIRPERSON: So this completes our
examination of your applications. Perhaps Mr. Fecan wants a few minutes to wrap
8732 MS McQUEEN: We've been sitting here for a long
time in this windowless room on a beautiful summer day, and, as Canadians, we
treasure every single one of those days. And you will be sitting here for many
more of those precious days. And we have been discussing matters complex and
arcane and detailed. When we leave here, all of us must deal with the cynicism
of columnists, who believe that this hearing is all about dividing up the
8733 We know that it isn't. This is likely the most
significant hearing that any of us will participate in. It is, quite simply, an
historic moment in our history. It is the transformation of Canadian television,
the entrance to the future of the two most powerful communication means ever
developed by human kind.
8734 We respect the significance of this hearing.
We believe that the Commission has crafted an unusual and innovative strategy
for the introduction of digital and we hope very much that you find that our
commitments and our applications are responsive to your
8735 We want to say also that we are committed to
making this a cooperative process. We will work with you, we will work with
every distributor, we will work with the other services. We want to build
8736 MR. FECAN: I know it's late, but I would be
remiss at this point if I didn't ask for the order.
--- Laughter / Rires
8737 MR. FECAN: We think we've got appealing,
exciting ideas. We know our Canadian content levels are high -- comparatively --
our rates are low and we believe we leverage our strength for the benefit of the
8738 Most importantly, when you look around the
room at this magnificent team, which I'm proud to be part of, both corporately
and individually you will see dedicated, passionate, imaginative and, yes,
nimble people, who have consistently delivered and who are playing at the top of
8739 We believe digital is the new frontier and we
really have to be there. We want to be there, both as a company and as people.
We feel we have a lot to give and we really hope we are given the opportunity to
participate and make digital a success. Thank you.
8740 THE CHAIRPERSON: We thank you very much for
your cooperation. You certainly have managed to make things interesting right to
the end of the day, despite the long day. And when the cameras are off, I will
tell you who that comment -- for those of you who don't know -- was attributed
8741 We will be back in 15 minutes to hear the B.C.
Media Travel TV application.
--- Upon recessing at 1615 / Suspension à 1615
--- Upon resuming at 1635 / Reprise à 1635
8742 THE CHAIRPERSON: Welcome back to our
8743 Mr. Secretary, please.
8744 MR. CUSSONS: Thank you, Madam
8745 Our next applicant is BCE Media Incorporated
on behalf of a general partnership with Travel Co, OBCI and CTV
8746 BCE Media is proposing a new Category 1
service to be called Travel TV. There is a maximum presentation time here of 20
minutes, but not until Mr. Alain Gourd has introduced his
8747 Mr. Gourd.
PRESENTATION / PRÉSENTATION
8748 M. GOURD: Madame la Présidente, Madame la
--- Rires / Laughter
8749 This is the first single application at the
end of a long day where it is sunny outside, that is, and therefore we will
propose to you to travel to the salient features of our
8750 La première étape de notre voyage sera
évidement d'introduire les membres de notre panel.
8751 Je suis Alain Gourd, président et chef de la
direction de BCE Media, and I am proud indeed to introduce the other members of
our team which is one of the strengths of our application.
8752 A mon extrême gauche se trouve Daniel Lamarre,
président et chef de la direction de TVA.
8753 To my immediate left, Trina McQueen, Executive
Vice-President, CTV. To my right is Jim Macdonald, Senior Vice-President and
Chief Media Services of BCE Media.
8754 Behind me is Nikki Moffat, Vice-President,
Finance of CTV's specialty Operations. To her right is David Elder, our legal
counsel. To her left is Elizabeth Duffy-MacLean, Director of Business Affairs,
8755 Derrière Daniel Lamarre se trouve Michel
Chamberland, président de Canal Évasion.
8756 And at the side table are Ivan Fecan,
President and Chief Executive Officer of CTV, and Kathie Macmillan, President of
Goldfarb Consultants, our research firm.
8757 Madame la Présidente,
8758 This application brings together three strong
Canadian communications companies: CTV, TVA and BCE. We are excited about the
quality and the potential of the innovative application we are
8759 Travel TV will be a high-quality, affordable
service with broad appeal to viewers. In fact, we expect that it will respond
very well to the Commission's priorities making a major contribution to the
launch of the new digital specialty services.
8760 Ours is the only travel application before you
that offers synergies with an existing French-language service, Canal Évasion.
And it will break new ground in interactive services to Canadian viewers based
on the deep commitment and experience of its owners.
8761 MR. MACDONALD: Travel is vitally important to
the Canadian economy, employing more than 525,000 of our fellow citizens and
bringing in more than $50 billion in revenues in 1999. Seventy per cent of this,
or $34 billion, is spent by Canadians indulging in their passion for travelling
8762 One of the most exiting things about creating
Travel TV has been the opportunity to design and build a truly Canadian channel
that can be commercially successful. Because Canada is one of the most popular
travel destinations, our Canadian programs will be highly attractive to
audiences both here and worldwide. In fact, one of Travel TV's key goals is to
generate content that works at home and is also exportable.
8763 In addition to a strong desire to travel, our
research has found that 80 per cent of Canadians surveyed expressed a positive
interest in travel television programming. In fact, travel is so attractive to
head of households demographics that we believe it will strengthen any new
8764 Our application has been extremely
well-received by a number of key individuals and organizations, and we wish to
thank the many intervenors who have supported us. We are particularly proud to
be the only travel application to earn the support of the Canadian Automobile
Association or CAA.
8765 The CAA is the most important travel
organization in the private sector and represents four million Canadian
travellers providing them with consumer advocacy services, quality ratings,
travel bookings and emergency assistance.
8766 Despite the unprecedented number of
applications that the Commission has received, there can be no question that the
launch of digital is a move into uncharted waters. The winning applicants must
have the commitment and the resources to stay the course. Our partnership of
BCE, CTV and TVA includes the management expertise to launch the service
successfully and the resources to sustain its quality.
8767 Our business plan is solid and realistic,
offering the optimal combination of quality Canadian programming and affordable
subscription rates. We believe this will help ensure the success of our channel,
as well as other channels launched at the same time.
8768 MS McQUEEN: Commissioners. Quality Canadian
programming will be the hallmark of Travel TV. We will create 750 hours of new,
original Canadian programming in our first year of service.
8769 We will spend $3.6 million on Canadian
programming in the first year and more than $41 million over seven years, and
that is a commitment of 53 per cent of our revenues over the term. This
represents the highest level of Canadian programming expenditures of any
application in this genre.
8770 We have also committed to the highest level of
spending on independent production of any travel application. We will begin with
a solid 53 per cent Canadian content, moving to 70 per cent in year
8771 Travel TV has lots of categories. It is a
full-service channel, offering a complete range of programming for people who
travel frequently, as well as for those who just love to dream about
8772 We have a wonderful team in place to ensure
the quality of the service: The infrastructure and experience of CTV, the
interactive expertise of BCE Media and Sympatico, and the cross-cultural
insights and synergies of our sister specialty, Canal Évasion, and our
French-language partner, TVA.
8773 Travel TV is uniquely positioned to leverage
resources and increase the quality of both Canadian and foreign programming. The
valuable relationships which make this possible include the partnership with
Canal Voyage, now available in France, Belgium and Switzerland.
8774 Travel TV will schedule innovative and
creative new Canadian travel shows, including programs commissioned jointly with
Canal Évasion, such as Romantic Destinations and Postcards
8775 Together, we will reveal Canada and the world
from a Canadian perspective.
8776 M. LAMARRE: Depuis le lancement du Canal
Évasion, nous avons beaucoup appris, à la fois de notre propre expérience et du
vécu partagé de nos partenaires du Canal Voyage-France.
8777 Travel TV pourra bénéficier de ces
connaissances acquises, et surtout de l'accès à un contenu non-canadien très
diversifié dans les deux langues officielles.
8778 Mais beaucoup plus important que cela, nous
travaillerons ensemble pour composer avec la difficile réalité d'un marché
francophone exigu encore plus étroit que celui du Canada
8779 La programmation télévisuelle de qualité est
très coûteuse. En conjuguant les ressources de ces deux marchés avec deux
fenêtres, nous arriverons à augmenter la qualité de la programmation de part et
d'autre à surmonter ce problème. Ce sont les téléspectateurs qui en
8780 Cela ouvre aussi de nouvelles possibilités
pour les producteurs indépendants du côté francophone et des perspectives
uniques à ce projet. Les investissements considérables en programmation
canadienne au cours des sept prochaines années apporteront aux téléspectateurs
un produit original et crédible à un coût fort raisonnable.
8781 Ce service offrira une diversité et une
profondeur de contenu uniques grâce aux forces respectives des partenaires en
lice. A TVA et au Canal Évasion, nous avons bien hâte de commencer à le
8782 MS McQUEEN: And when we build Travel TV, what
will it actually look like?
8783 Our flagship show is destination.watch, a live
half-hour news magazine which will expand to one hour in the second year. Every
day, three times a day, destination.watch will provide up-to-the-minute travel
information. Timeliness and depth of coverage will come from immediate access to
local and international content from our network of local stations and
8784 We will explore travel destinations at home
and abroad from a uniquely Canadian perspective, from urban experiences to
island fantasies, from popular hot spots to roads less travelled, from personal
travelogues of famous Canadians to the historical routes of our show, Famous
8785 Reflecting the multicultural aspects of
Canadian life, new Canadians are the stars of New Style Old Country, providing
intimate insider information about their homelands.
8786 Young Canadians can tune into Travel XPress
for an alternative look at travel destinations.
8787 Canada's unique brand of aboriginal
eco-tourism is one of our country's best-kept domestic secrets, although it has
been attracting Europeans here for some time. Through our programming agreement
with APTN, we will open that up for Canadians.
8788 We do indeed have Something for Everybody.
That's the title of our weekly half-hour guide to family-friendly destinations,
whether you are toting rambunctious toddlers or grandchildren or reluctant
8789 Travel Magazine offers practical travel tips
with special segments for seniors, women, children and the solo traveller. On
Bargain Travel, viewers learn how to travel on a shoestring, share their budget
tips and stories on the Travel TV Web site, and benefit from last-minute
8790 And for the ultimate armchair travel
experience, we will screen great wanderlust films from Canada and around the
world every Sunday night, like Around the World in 80 Days, Travels with My
Aunt, and La Florida.
8791 All of this adds up to an exciting television
service that will make a unique contribution to the system. And there is so much
more. Let's have a look.
--- Video presentation / Présentation vidéo
8792 MR. MACDONALD: The Travel TV Web site featured
in the video will offer a combination of interactive content that works in
conjunction with programs in real time, and highly functional travel-related
8793 While there is no shortage of travel
information on the Web, it is not organized in a way that is user-friendly to
Canadian travellers. Our site will allow Canadians to use a powerful specialized
travel search engine to find exactly what they want, priced in Canadian
8794 The Web site will offer a detailed interactive
program guide. You will be able to ask for what you want, when you want it, in
simple formats friendly to older computers, or in multimedia. If you don't want
to miss a Travel TV show, you can ask for a reminder: in your e-mail or your
voicemail, on computer, your pager or your cell phone. You will be able to
communicate with the people who work at Travel TV, or e-mail requests for more
8795 The Travel TV Web site will also link to
reputable information providers for real-time weather reports, airport arrivals
and departures, interactive maps and last-minute travel
8796 Our valuable checklists will cover passport
information, visa requirements, medical coverage, recommended immunizations and
customs information, amongst other things.
8797 We will also rely heavily on additional
sources of content such as CTV's local stations, TVA's Quebec stations and BCE's
city portals, such as toronto.com and montrealplus.ca.
8798 From anywhere you will be able to find out
which hotels in Calgary allow pets or which restaurants in Old Montreal have
wheelchair access. Very few.
8799 Travel TV will create an entirely new
community of Canadians, sharing opinions and perspectives based on their
personal travel experiences in a searchable database. All of this will happen on
the Web in harmony with the television service.
8800 But as we discussed in this hearing, by early
next year, we will begin to see the next generation of digital set-top boxes
which will begin to integrate television and the Web. With this distributor
capability will come truly converged interactive content.
8801 At this point, you will be able to use your
remote control to say to your television set, "tell me more" or "take me there",
"let me talk to so and so" -- all the things you can do now on the Web and more
but with high quality full-motion video. Viewers will be able to join live chats
with the show's production team, Canadian celebrities, travel professionals or
8802 Finally, as we build this ground-breaking
service, we will find many ways to help bridge the successful transition to new
media skills and opportunities for the independent production
8803 MR. GOURD: Madame la Présidente,
Commissioners, we are highly enthusiastic about this project because of its
unique strengths. We are proposing an attractive, quality service of proven
market demand and broad appeal.
8804 We project the highest Canadian content
spending among the travel applications before you, generating 750 new original
hours of Canadian programming in the first year alone. We are committing to
spend 53 per cent of revenues over the licence term, a total of more than $41
million. Our Canadian content will increase from 53 per cent to 70 per cent over
the term, and all this at the lowest average subscription rate over those seven
8805 Ours is the only travel application to offer
an affiliation with a francophone service. This will deepen and enrich the
viewer experience in both languages, while aggregating resources to quality
8806 Our independent productions will have strong
export potential because of their quality. The appeal of Canada as a
destination, and our diverse international relationships.
8807 We have proven expertise in interactivity. The
Sympatico Web site is the most visited Canadian portal on the World Wide
8808 We are proposing interactive features
consumers can really use and enjoy, building a community of shared experience
8809 And, finally, we are 100 per cent
Canadian-owned and dedicated to a genre where the depth of content and of
interest can support this. The individual partners offer a track record of
success in the launch of new services.
8810 We look forward to making an important
contribution to the launch of the new digital services at this crucial juncture
in the history of the Canadian broadcasting system. Therefore, Madame la
Présidente, Commissioners, we look forward to obtaining your approval to make
Travel TV a successful Category 1 service.
8811 Thank you. Merci.
8812 THE CHAIRPERSON: Thank you, Mr. Gourd and your
8813 Commissioner Williams, please.
8814 COMMISSIONER WILLIAMS: Good afternoon, Mr.
Gourd and fellow panel members.
8815 MR. GOURD: Good afternoon, Commissioner
8816 COMMISSIONER WILLIAMS: This hearing, like most
others, has attracted a familiar and usual group of applicants, if I can stretch
that a bit. However well that we do know you, there are still a few corporate
questions that we will have to go through in order to flesh out your
8817 I guess, first, I would like to thank you, on
behalf of the Commission, for your concise and complete application, because
this will allow us to travel fairly quickly through the questions that remain to
round out your full application.
8818 So, for the first set of corporate questions,
it's going to deal with selection criteria -- and the Commission has indicated
certain selection criteria that it would use to license Category
8819 What criteria do you think are most important
in the licensing of Category 1s?
8820 MR. GOURD: Well, Commissioner Williams, four
applicants later we were kind of expecting the question -- just to show that we
were paying attention.
--- Laughter / Rires
8821 MR. GOURD: And, therefore, I would like to
underscore, at the outset, that the eight criteria themselves are, in our
opinion, quite appropriate. They cover, comprehensively, the various issues that
could be considered and, therefore, we don't really have to add to
8822 In terms of the most important criteria, in
our opinion, I would mention attractiveness because, at the end of the day, the
success of the launch of the new digital tier is what matters, the
attractiveness to the viewers.
8823 Contribution to the Canadian broadcasting
system lay in programming, reasonableness of the business plan, ability to
implement -- and I would like Jim to present on position on these
8824 MR. MACDONALD: Thank you very much,
8825 What we really would like to do is to just
talk, if I may, with a few sub-headings, but we certainly feel that the
attractiveness of the service is a very, very important point because without,
as Trina said in the last series of applications, without audience interest we
really have nothing.
8826 So, demand for the genre and, therefore, the
research, we think, is a very important part. Cost to the consumer is certainly
important. And the ability to contribute to BDU packaging is a very important
factor to us -- and let me just elaborate on that, for a second.
8827 In past launches, I think that there has been
a notion of drivers -- and you will certainly hear virtually everybody here say
that they are a driver -- we really think that that has changed and that, as we
split the hair further and further, there aren't going to be specific categories
that are capable of pushing a whole group, but they are capable of making a
valuable contribution within a plan, within a package, and make a contribution,
in terms of demographics and overall interest within the household and,
certainly, in that area, we feel travel is an important one.
8828 Within the commitment to Canadian programming,
we certainly feel that that should be the second criteria because it takes into
consideration the regulatory responsibilities of the Commission and certainly
takes into focus all of the aspects of the Broadcasting Act. And in order that
we have it, exhibition of Canadian programming, we think, is very, very
important. But, also, it's not just the quantity. We have always had that
discussion whether it's quantity or quality. We think that the quality is very
important, and that is reflected by the expenditures on Canadian
8829 We think that in differentiating the service
that the commitment to original hours is very important.
8830 And, certainly, diversity of content has to be
looked at within the overall framework of all of the applications -- and, in
that regard, the fact that we have a francophone component, as well as a genre
that is not covered in conventional television, is very
8831 And, finally, under the general area of
Canadian programming, once we have taken care of the regulatory fulfilment,
there's clearly the interest in interactivity, which we think is a very, very
important part of this going forward.
8832 The business side, I think, has to be very
much taken into consideration.
8833 As we have gone through each level of
licensing of specialty services, we have gotten into an area where the ability
to make money, or to be at risk, has gotten greater and greater and, therefore,
I think the Commission really have to look very carefully at the business plans,
have to be satisfied that the various groups have the wherewithal to pull it off
and, therefore, the strength of the business plan, the financial strength of the
applicants, the management experience and the promotional and marketing
abilities, we think, are very important -- and it's not just what's in the
applications for launch and promotion, it's not just what's there, it's what
else are the various parts of the applicant able to bring to
8834 In other words, CTV's advertising ability is a
very important part of this that is very much over and above the advertising
that is included. The ability to promote the Travel TV on Sympatico, over and
above, is very important. And, equally, it will be important to use some of the
U.S. content on ExpressVu to help promote not only this service but all of the
8835 So those are the key areas, in the order that
8836 Alain, do you have anything to
8837 COMMISSIONER WILLIAMS: Okay. Thank
8838 The next area I want to explore is
implementation of service or "drop dead" date, launch date, and, I guess I will
begin by: Should the Commission impose a minimum amount of time by which a
Category 1 licence must implement its service.
8839 MR. GOURD: It is quite important, indeed, to
ensure the success of the launch because this is the first step in this new
digital interactive journey and it has to be successful to be conducive to many,
many more steps as distributors expand their technological capability and as
programmers refine their contents. So, therefore, there is, in my mind, an
overwhelming advantage in having a launch of all of the new Category 1 services
and many, hopefully, of the Category 2 services at the same date. This allows
programmers and distributors, together, to maximize their respective
contributions in order to ensure that it starts with the image of
8840 For example, Bell ExpressVu and Star Choice
could use their local avails in the U.S. specialty services to make the
promotion of these new services and other distributors could make use of their
own capability to contribute, as well. So, therefore, yes, the answer is,
8841 MR. MACDONALD: Commissioner Williams, just to
add, our application did say that we would be ready to launch in May. However,
September is certainly acceptable to us. And, in fact, quite frankly, we think
it is important to do it right than to do it fast. And, also, we feel that
launching into the fall, when people are back from their holidays, is probably a
much smarter opportunity. But, as Alain said, the most important thing is that
we launch in a co-operative and collective way so that the launch is
8842 COMMISSIONER WILLIAMS: Okay. Thank
8843 The next question deals in the area of
8844 We have looked at your proposal. What did you
mean by "independent producer"? Can you give us your definition of "independent
8845 MR. GOURD: Independent producers are a very
key component of our project and, of course, it is important to know what do we
mean exactly, the percentage of the level of minority shareholding, and I would
like to turn to Trina to answer that.
8846 But before I turn to Trina, there is one
important dimension I would like to underscore. And it is that it is important,
at the end of the day, that some independent producers -- many of them,
hopefully -- have as partners, as minority partners, broadcasters or other
entities to maximize synergies to develop cross-fertilization, and to develop
also exchange of best practices. So to have in independent producers some other
minority shareholders, in my mind, is, per se, an important
8848 MS McQUEEN: And I think even if we didn't
like, it's inevitable. In fact, what we are seeing is more and more takeovers
and wholly-owned production companies by broadcasters. However, our notion of
when true independence starts is when you have 60...sorry, I'm trying to...I
can't do math in public. Let me start it the other way around.
--- Laughter / Rires
8849 MS McQUEEN: We believe --
8850 CHAIRPERSON OF THE COMMISSION:
8851 MS McQUEEN: Thank you, Commissioner -- is if
you have 66 per cent of your company, you are an independent producer -- or
8852 COMMISSIONER WILLIAMS: In your Canadian
programming expenditures, your 53 per cent is proposed, and then an
additional...do you have additional comments to add to your response dated May
15? We know that you suggested a couple of alternatives.
8853 MR. GOURD: Well, the Commission did request
some suggestions, and we made a few, as you indeed know. However, at the end of
the day, 53 per cent is the minimum. We are committed to that and we will be
pleased to, indeed, deliver the goods.
8855 MS McQUEEN: I think that the commitment that
we have made is on the record and stands. Again, we are interested in all the
proposals, ours and the Commissions, and would be happy with a licensed
condition that reflects any one of those proposals. We would probably be happier
with the ones that were suggested by the Commission and the ones that we
8856 COMMISSIONER WILLIAMS: Okay, thank
8857 I'm intrigued by some of the comments I've
heard on the importance of financial strength and capacity in order to
effectively launch digital. So would your opinion then be, then, size does
matter, the financially smaller applicants are at a form of disadvantage in this
8858 MR. GOURD: As we said, the number one criteria
is attractiveness, then contribution to the broadcasting system, quality of
programming. And then when we focus on ability to implement, yes, in some cases
to have experience, that is the key criteria. And we believe that this
partnership particularly, the programming expertise of CTV and TVA, the
cross-fertilization between the francophone télévision and our project, the
ability of BCE in the area of interactivity are very important
8859 Does it mean that a smaller group, a more
focused applicant, has no creativity? On the contrary, on the contrary, we
believe that each applicant, each type of application, carries its pros, its
qualities, and you can have creativity and an ability to implement from every
8860 MS McQUEEN: And we would also add that big
companies are capable of putting forward really dumb business plans just as
easily as small companies.
8861 But I guess one of the things that we've
talked about in this hearing is that you might actually lose your licence if
you're not able to be up for a launch in a certain period of time. So we would
suggest that given that, and given that if an applicant had won a licence in a
competitive hearing and was unable to deliver, it would be a shame that the
system would be, in a sense, robbed of that genre, or that category, which might
have added attractiveness.
8862 So, again, we are suggesting not a look at a
business plan from a big or small company, but a look, to be sure, that the
people who are before you can delivery.
8863 MR. MACDONALD: Commissioner Williams, in the
CTV presentation, Trina talked about the long term versus the short term, and I
don't think that that can be emphasized enough.
8864 Typically, in the past, we have seen specialty
applications become positive in the second or third year. In this particular
round, we are, as I said in our in-chief, looking at a long time out before we
are turning cash-positive. So there has to be very much an investment philosophy
here and I think that we have to ensure that the companies (a) are committed,
and (b) have the resources to really go the distance.
8865 COMMISSIONER WILLIAMS: Okay.
8866 I just have a couple of questions on your
application. Why have you applied for a category 1 licence? And have you also
applied for a category 2?
8867 MR. GOURD: Category 1, because of the
attractiveness, the contribution to Canadian programming and the strength of the
business plan. But let me turn to Trina now because, indeed, we have applied for
category 2, as well.
8868 MS McQUEEN: We think that the category 1
applications are really going to be crucial to making digital work. And,
fundamentally, I think our statement has always been that the most attractive
digital package offered should be the one that the Commission
8869 In category 1, you will know that they are
going to be in that package. You will be able to make a judgment on all the
criteria that you have. And when you make that judgment, I think that the
category 1 licences before you will have to have certain things. And we believe
that Travel TV has those things.
8870 It's a genre that people find very attractive.
There are good sources of programming. This application has partners who are
strong and partners who contribute from different cultural aspects. So for all
these reasons we think that travel is a good genre from category 1 and that
Travel TV is the category 1 choice.
8871 COMMISSIONER WILLIAMS: Would you agree to
remove category 15, which deals with filler programming from your
8872 MS McQUEEN: Yes, we would be willing to remove
category 15 from our application. Thank you.
8873 MR. MACDONALD: I thought that was critical to
8874 MS McQUEEN: It's my favourite
8875 COMMISSIONER WILLIAMS: I'm now going to move
into the area of interactivity.
8876 If we license a category 1 service with
interactive elements by a set-top box, do you think distributors should be
obligated to carry those interactive components?
8877 MR. GOURD: In principle, yes, because we feel
that the interactive data stream is an integral part of the program. And the
data stream that is carried, in addition to that, should be respected. It should
not be tampered with, it should not be changed without the consent of the
8878 Then the question is: what data stream? And
there there is a component of reasonableness. Because, for example, if a few
services have three times as much video on their data stream as on the main
service, then you might lack bandwidth for the other services or for services
that will come in the future. So it is a matter of, yes, in principle, but the
number of kilobytes and the bandwidth should be discussed between distributors
and programmers to ensure that it's reasonable for each service and in
8879 And David Elder has studied that question and
I would like him to comment, if he wishes.
8880 MR. ELDER: Thank you, Alain.
8881 Again, we do consider these interactive
services to be an important enhancement, but particularly for some DTH companies
and, I guess in particular, we are thinking about the expense of satellite
bandwidth. There has to be some concerns, some heed paid to reasonableness.
8882 MR. MACDONALD: Commissioner Williams, we do
understand, however, the difference between carrying the Internet act of content
which is a very integral part of the programming and the possibility of
e-commerce applications where the box is actually used in a transactional way
and so I think that certainly our view is that if there is a transactional use
of the interactive content that there would be a shared revenue opportunity
between the BDU and the program supplier.
8883 As far as the notion of there being a program
and a sort of an add-on cost, if you want to carry the interactive, in our view
it is the interactive programming elements that are going to drive the whole
channel. So it shouldn't be a menu selection where everything is
8884 COMMISSIONER WILLIAMS: The Personal
Information Protection Electronic Documents Act is a new federal legislation
dealing with the exchange of personal information in the private sector which
goes into effect next January.
8885 Have you taken measures to ensure compliance
with this legislation as it relates to the components of services you have
proposed for the exchange transmission gathering or display of personal
information that takes place?
8886 MR. GOURD: I must say we were expecting that
question to a certain extent and it goes without saying first that the law of
the land will be fully respected by our Travel Channel.
8887 In addition to that, it is an area where BCE
has a lot of expertise. It has developed policies, codes that apply to eight or
nine units within the BCE family. Bell ExpressVu, for example, is covered by
such a code of conduct, and again I would like to ask David Elder to expand on
what we have done because it is an area that we have focused on
8888 MR. ELDER: Thank you, Alain.
8889 I think it is fair to say that privacy and
protection of customer privacy has been of some importance and concern to the
BCE family for some time.
8890 We consider privacy to be one of the key
a code that meets the CSA standard referred to in the new federal
8891 We have been working quite actively at
implementing this new standard and I think in the very near future, actually,
you are going to be seeing from us a lot of publicity to make sure subscribers
know what protections are available to them and what the BCE companies are
8892 We have also appointed one of our senior
executive officers to be responsible for the implementation and ongoing
compliance with this legislation and our new code and policy.
8893 COMMISSIONER WILLIAMS: Good. Thank
8894 What distribution options have you negotiated
other than distribution over ExpressVu?
8895 MR. GOURD: It goes without saying that
obviously we have spoken to at least one distributer, Bell ExpressVu, and it has
been a big plus in the preparation of the application because we had not only
the expertise of Sympatico-Lycos pertaining to interactivity on the Web site,
but we benefitted from the expertise of Bell ExpressVu relative to interactivity
on the TV screen and the discussions we have had were first that every service
in this new package should receive the same support, the same marketing and
technical effort whether it is affiliated or not.
8896 Secondly, we discussed the importance of
packaging that we all agree, whether Travel TV or ExpressVu with the position of
SPTV that it should be packages, five to ten services, and there I want to
relate a very interesting experience that Bell ExpressVu has encountered. As you
know, it is offering thematic packages, but over 70 per cent of the subscribers,
having acknowledged that they can go for smaller packages, go for one of the two
major packages and that has also been discussed with Bell
8897 So in a nutshell, we did not discuss specific
terms about a concrete distribution agreement because we felt that it was more
proper to wait until the CRTC had made its decision, but we discussed broad
approaches, technical dimensions that would be available to all
8898 MR. MACDONALD: In developing the business
plan, you should be aware that our clear expectation was as part of a package
8899 COMMISSIONER WILLIAMS: Thank you for
8900 Now, what are your views on the possibility of
program suppliers in BDU's sharing costs for the set-top boxes or certain
components or technologies that would facilitate interactivity?
8901 MR. GOURD: We clearly feel that in terms of
the set-top box, it should be the responsibility, and the total responsibility,
of the distributor. We don't feel that we should ask the programmer to do
anything else but the critical dimension which is to develop attractive
programming, including attractive interactive feature, and of course the
programmer would be responsible fully for that component.
8902 MR. MACDONALD: We trust you recognize he was
speaking in that regard as the CEO of ExpressVu.
--- Laughter / Rires
8903 COMMISSIONER WILLIAMS: Well maybe we could
spend a bit of time on ExpressVu then.
8904 Can you describe ExpressVu's roll-out of the
second generation of set-top boxes in terms of timing, and maybe spend a little
bit of time on describing the advance features that these boxes will make
available to Canadian viewers?
8905 MR. GOURD: Indeed, but please allow me to say,
as an introduction that in addition to the comments and exchanges we might have
today that the President of ExpressVu, David McLelland, and key members of his
team, are scheduled to be present in front of you on August 30th to expand
further any discussion we might have.
8906 As other applicants have mentioned, the
deployment of interactivity relative to television will go through a series of
steps and the steps, the approach, will differ from one kind of distributor like
Direct Home as opposed to another like cable.
8907 I have noted, for example, that cable is more
focusing on Web-based interactivity, whether on the TV set or on the computer.
In the case of Bell ExpressVu, our main focus is interactivity on the TV screen
because we are a broadcast distribution undertaking.
8908 However, our step one was to provide
satellite-based Internet with higher speed to more remote areas. So we said,
before we move to our true goal let's start by equalizing a bit the ability to
have Web-based Internet. So as of March 30th of this year, we have launched,
using a technology acquired from DirectTV in the U.S., Direct PC Satellite
Edition which is to allow more remote areas to have higher speed Internet, to
bring them a bit more at par with the main urban centres in order to have
Web-based Internet. But that is the computer separated from the TV
8909 Our second step, which is in motion
now -- we have tested various technologies, we have even started to
introduce the boxes without activating them yet -- is interactive
television on the TV set and that will be non-Internet. It is interfacing with
the remote control with the TV set.
8910 That will be available mid-2001. As I said, we
have started to introduce boxes. We have already 100,000 as we speak out of a
population of 550,000 subscribers. We will introduce another 100,000 before the
end of the year, so we will have 200,000 out of 700,000. Then hopefully before
mid-2001 we will have 100,000 more which will be 300,000 out of 900,000 so the
percentage is growing. Then when the CRTC will have made known the services that
are licensed, we will be able to partner with the programmers and decide when we
should activate these boxes through a software download that will make them not
only capable of interactivity but actual interactivity
8911 That normally should be a few months before
launched. In that sense, a September launch makes it a bit easier for us because
it gives us more bidding space to have more boxes and to have the proper
8912 What will these boxes be able to do? It will
use a datastream that will go through the vertical blanking interval, and the
kind of content that will be distributed will be basically text and still
8913 There will be general services that will be
offered whatever programming services are licensed as part of the general
service. For example, weather is certainly a general service that should be
automatic with the box whatever the choice of the given subscriber relative to
the specific digital services they choose. Maybe stockmarket information should
be another general service, and so on and so forth.
8914 Then there would be the specific services for
each of the programmers, the specific datastream for Travel Channel, Shadow, MEN
and so on and so forth. That would be introduced as well.
8915 Finally, it would not be able, at this point
in time, to have full motion video. It will have e-commerce capability where,
for example, if you look at the sports program, you have an icon, you press the
icon and you can have information about the program, like statistics about
players, about a team; but you can have another icon which is the e-commerce and
you press it, then to the phone line it's sent, in the modem, it's sent to a
fulfilment house where the transaction can be completed.
8916 Jim has mentioned that when the box is
activated you have to partner in terms of costs and sharing of
8917 So that will be step No. 2.
8918 Step No. 3 -- because we have learned the hard
way from time to time at Bell ExpressVu that when we try too much, you know, at
the same time, it's not always as successful as if you do it step by step --
step No. 3 would be during 2002, probably mid-2002.
8919 So each year we would introduce a new
technology and take some new steps. That would be to bring the Internet
interactivity to the TV set.
8920 Step 1 was to the computer; step 3 to the TV
8921 There we are still testing with our U.S.
partner in technology, Echostar. Echostar has introduced a box with interactive
Internet capability, which is Microsoft-based Web TV.
8922 There is another technology which is
8923 So as we speak we are examining both. We are
testing both. We believe that both still have some limitations that we would
wish to have some improvements, like the quality of the text on the TV screen is
much different than the text on the computer screen. You take the same text, it
has to be adjusted because it's not as readable on the TV screen if you don't
make adjustments. We feel it isn't there yet but both technologies and the
people supporting them are working very hard on it, and we believe that it will
be definitely ready for 2002.
8924 These new boxes that we are envisaging for
2002 would have -- in addition to normal entertainment -- would have still
interactivity outside of the Internet, Internet-based interactivity, plus
high-definition TV. So that would be the new box in 2002.
8925 Later, but that has not yet been approved by
our board as a possible step No. 4, we hope to be able to launch NYMIQ II where
we would have broadband interactive Internet, where the interactivity would be
fully by satellite and with very, very high speed. That is also at the design
8926 COMMISSIONER WILLIAMS: Until that gets
approved by your board and gets put into service, would the ExpressVu
distribution method not be as robust as the cable network?
8927 MR. GOURD: In terms of board approval, I was
referring to step No. 4.
8928 In terms of the first three steps, I would say
that our Internet offering is as robust as any other Internet offering. It's
working just fine. It is a bit slower than high-speed Internet in major urban
centres because it's 400 kilobytes per second while cable and Sympatico can
offer speed over 1 megabyte.
8929 But, you know, for not far away from here, if
we are thinking about Wakefield, Maniwaki, it's quite a nice speed for markets
which are relatively close to major urban centres. But it's robust. It's a bit
slower, but much faster than what they used to have through the dial-up, which
is 56 kilobytes.
8930 In terms of step No. 2, the ITV box,
acknowledging that it is different, that it's on the TV screen, on Internet, it
is robust, it's tested, it has been introduced in the U.S., it works well, and
it's a matter of partnering with other distributors and the programmers to say,
"Okay. We are launching, let's say, September 1, so we must activate the boxes
three months before and let's agree on the datastream and make it
8931 COMMISSIONER WILLIAMS: In your view, what will
be the role or interplay that you consider will or should take place between the
program providers and distributors and the equipment manufacturers ensuring that
we have a digital full interactivity rollout, as part one of the
8932 Part two is: Will this apply equally to cable,
DTH and MDS?
8933 MR. GOURD: First, in terms of the role of the
various players, as Trina said a bit earlier, it is too soon. I think I cannot
underscore enough how crucial it is because it's new territory. We know our box
works in the laboratory, so the technology is there, but how do you make it
successful in the marketplace where viewers will actually receive
8934 So it's more than technology. It's how you use
the technology, how you market it, how you present it, what kind of content,
what feature do you push first? Do you push first e-commerce? Personally, I
don't think so. I think we should push first the enhancement to the programming,
but some people might have a different view.
8935 So the partnership between the distributor and
the programmers and the others, like the manufacturers, in our case, Echostar,
is absolutely fundamental.
8936 It should indeed apply to cable as well.
However, it appears that DTH, as one perspective suited with technology and its
strength, and cable as an approach which is rooted in its technological
characteristics, while there should be some exchanges and co-ordination between
direct home and cable there should be a primary relationship between the various
programmers in each of the two categories of distributors.
8937 COMMISSIONER WILLIAMS: If the interactive of
your proposed services doesn't work on DTH or MDS, what impact will this have on
the availability of the service to those subscribers?
8938 MR. GOURD: I will turn to Jim for that
8940 MR. MACDONALD: I want to make sure I
understand the question first, if I may.
8941 You said if the interactivity is not available
through the distributors?
8942 COMMISSIONER WILLIAMS: Yes, that's
8943 MR. MACDONALD: Well, from a competitive point
of view, I'm assuming, therefore, that everybody would be in the same boat, and
therefore we would be essentially launching as a service based only on the
programming that we were offering and the net enhancements that we would be
8944 I'm going over this because "interactivity" is
a word that gets misused a lot -- or misunderstood, more correctly. So we would
launch absolutely with all of the Web-based activity that we showed you during
the video and then we would start to build out the truly interactive components
as it was available from the distribution. But it would not materially impact on
our -- it wouldn't impact on our business plan at all, quite frankly. It would
just impact on our desire to make this service a much more interesting one,
which we think will happen as a result of the interactive
8945 COMMISSIONER WILLIAMS: Another part of your
earliest presentation -- the word "export" struck a chord with me. I guess
the businessman in me sees such a tremendous potential to bring visitors to
Canada from other parts of the world, given the focus of your specialty
8946 How much consideration, because obviously some
has been --
8947 I wrote the question before your
8948 How much consideration has been given to this
export opportunity and have negotiations been initiated for carriage in foreign
countries? That would be the first part of the question, and I guess another
question that is pretty important: Has ExpressVu explored developing a customer
base in the United States, our nearest neighbour?
8949 MR. MACDONALD: Why don't I start this, and
then Alain can talk about it specifically on ExpressVu.
8950 Fundamentally, we believe that as producers of
Canadian programming -- and, in that instance, not necessarily are we
producing it, but certainly we are working with independent producers -- we
have to be looking at not only the domestic market, but how can we bring that
production to the world market.
8951 In the case of Travel, we have a unique
opportunity because of the interest that people have in Canada and the fact that
this is such a terrific destination for people from all over the
8952 So we feel that although we have not consulted
with anybody, we have not included any export revenue in our business plan, we
certainly feel that there is an opportunity to do so. But the benefits of that
will primarily accrue to our independent production partners.
8953 The benefits that we expect to generate are
that by bringing more money into the production equation we will be the
recipients of a higher quality program, knowing that the cost of that program
is, in part, being amortized by licence fees coming in from other countries in
8954 MR. GOURD: I will focus on ExpressVu, and then
I will ask Michel Chamberland to expand on the benefits of the partnership with
Canal Évasion, which is bringing some export capability for Travel TV in
8955 Bell ExpressVu has developed a series of
partnerships with U.S. companies, primarily with Echostar, and we agreed between
us, particularly because of the regulatory framework in the two countries, where
direct-to-home is considered a national activity as opposed to a continental
one -- we agreed that in terms of retail we would not undertake to retail
our service in the U.S. by selling our small dish in the U.S. and, conversely,
Echostar particularly has agreed not to sell at the retail level a small
Echostar dish in Canada.
8956 However, there are possibilities at the
wholesale level where we could sell some programming services, for example, to
Echostar and they would re-uplink these services and put them on their own
8957 We are discussing these possibilities as we
speak and looking at the regulatory framework to see how we could achieve that
with as minimum disruption as possible to the regulatory
8958 Now, pertaining to the opportunity which is
presented by Canal Évasion, I would like to turn to Michel
8959 M. CHAMBERLAND: Merci, Alain.
8960 Monsieur le Conseiller, membres du Conseil.
J'étais anxieux de prendre la parole. Pour ceux qui me connaissent normalement
je suis devant.
8961 Je dois dire, je veux souligner une chose à ce
moment-ci, c'est l'enthousiasme qui qualifie le groupe de CTV, Trina, Jim et
toute l'équipe de CTV, face à ce projet.
8962 J'ai eu le privilège de pouvoir lancer la
première chaîne sur le voyage au Canada en langue française avec Évasion et je
vous en remercie.
8963 On parlait de la distribution tout à l'heure.
Déjà dans la distribution qu'on a faite au moment de Canal Évasion, on a déposé
une entente qu'on a avec Canal Voyage-France où 52 heures de la programmation de
Canal Évasion se retrouve sur Voyage-France donc par ricochet sur la Suisse, la
Belgique et les territoires et les départements. Donc cette entente-là
8964 Je crois que dans la synergie qu'on saura
développer avec nos collègues de Travel TV il y aura certainement des produits
qu'on saura créer et qu'on pourra distribuer à l'intérieur de cette entente-là
et on pourra même, avec la complicité de Georges Bonopéra et de son équipe
extensionner cette entente-là, l'agrandir du même coup et je dois aussi vous
dire -- et je crois qu'Alain va l'apprendre à ce moment-ci, je m'en
excuse -- on travaille aussi la possibilité de créer des bouquets entre
Voyage Évasion et éventuellement Travel TV et ces bouquets-là on pourrait les
exporter dans d'autres marchés à travers le monde.
8965 Donc il y a déjà des discussions avec le
Japon, il y a des discussions sur d'autres territoires. Donc pour nous on est
emballés de voir une équipe qui se situe, parce qu'on est un peu au centre de
tout ça. Quand on a fait une demande déjà Voyage-France avait un an, ils avaient
26 000 abonnés. Aujourd'hui ils en ont tout près de trois millions. Nous on
a maintenant sept mois. On commence à peine à marcher et je vois mes collègues
de CTV qui partent avec un projet aussi emballant.
8966 Je dois vous dire que j'applaudis et j'ai bien
hâte de pouvoir travailler en synergie sur des projets. On en a identifiés déjà
à ce moment-ci. On a identifié Évasions romantiques, on a identifié Cartes
postales, on fait déjà sur l'hiver dernier Cartes postales en Floride. On fait
maintenant Carte postale sur l'Ontario. On souhaite faire des Cartes postales
comme ça à travers le pays et avec la complicité de Travel TV et les Évasions
romantiques, il y en a aussi partout à travers le pays.
8967 C'est ce qu'on vous avait dit. Je pense qu'à
mieux connaître on apprécie d'avantage et c'est le mandat qu'on se donnerait. On
a bien hâte de pouvoir mettre en collaboration les producteurs québécois, les
producteurs francophones et les producteurs anglophones et de les faire
travailler de façon synergique sur l'ensemble du pays.
8968 Donc pour l'exportation, oui, il y a
possibilité de participer à l'entente qu'on a nous déjà, qui est signée pour six
ans avec Voyage-France et il y a possibilité de l'agrandit j'en suis
8970 MR. GOURD: I would like to add that Canal
Voyage has produced a written intervention to confirm what has just been said by
Michel, and we have filed this written expression of deep interest with our
application. It is in the file.
8971 COMMISSIONER WILLIAMS: Thank
8972 With respect to original Canadian programming,
can you clarify how much of the programs it describes in its schedules as
Canadian productions that will be original productions?
8973 MR. GOURD: Absolutely. We would be very
pleased to do that.
8975 MS McQUEEN: At this point we are anticipating
that we will have 1,495 original hours in the schedule.
8976 COMMISSIONER WILLIAMS: Thank
8977 MR. MACDONALD: I'm sorry. It is actually 750
hours in year 1.
8978 MS McQUEEN: I guess I am counting the whole
thing. Excuse me.
8979 MR. GOURDE: Both are right. It is how many
8980 COMMISSIONER WILLIAMS: That was a pretty
--- Laughter / Rires
8981 MS McQUEEN: Yes. I thought so.
8982 MR. GOURD: They are both
8983 MR. MACDONALD: That is why we work so well
8984 COMMISSIONER WILLIAMS: Travel TV stated that
interactivity would provide opportunities for unlimited interactive segments and
enhancements. No revenue projection was included in your business plan. Can we
attempt to address that?
8985 MR. GOURD: Yes. We are pleased to focus again
on interactivity, because we heard this morning about the interactive capability
of CTV and BCE. I suspect that tomorrow, Daniel, we will hear about TVA's
8986 I'm sorry, Thursday.
8987 So the group, as a whole, is committed to
8988 Jim, would you like to
8989 MR. MACDONALD: Thank you.
8990 I guess if you start right from the broadest
strokes within BCE, of course there is a corporate culture that is committed to
8991 When we were putting together the application,
I guess we were a bit confused as to the use of the word "interactivity". We
were expecting that in the first portion of the application all of the activity
would be Web-based and not true interactive television.
8992 Knowing that the boxes were coming out and
knowing that the investment was likely to end up in a loss, and knowing likely
that the Commission was going to ask us to make a commitment in terms of
revenues, as a percentage of revenues, we chose not to fill that in because a
loss would then actually reduce the amount of Canadian
8993 We do have a business plan, which is very much
driven on the basis of Web-based activity. Over the seven years, though, it
generates a loss of approximately $1.4 million.
8994 The only number that we actually did include
in our application you will find in the pre-operating costs. There is a $400,000
commitment to Web-based investments at that point.
8995 But that is the background, and that is what
we expect to happen, that there will be a net loss of $1.4
8996 We do not anticipate that there will be much,
if any, revenue within the first licence term that comes directly from the
"interactive" portions of the schedule. Although that is possible, depending on
what the boxes do and what we are able to negotiate with the
8997 It is, as an example, possible to do on-line
reservations. And as I mentioned earlier, if a transaction is actually done
through the box, we fully expect to share that. I hope that that explains why we
didn't include it in the first place.
8998 MR. GOURD: If I may, when you talk about
losses, it means that you have expenditures. And I'm looking at the sheet that
is in front of Jim and we can convey to you that we intend to spend over $8
million over the period to promote interactivity.
--- Pause / Pause
8999 COMMISSIONER WILLIAMS: I was also intrigued by
your comments on exploring programming ideas with Television Northern Canada and
the Aboriginal People's Television Network that would feature geography,
lifestyle, heritage and culture of the aboriginal areas and communities. As you
know, when you were in Yellowknife, one of the companies that I owned built the
television uplink for TVNC 10 years ago. So I always follow with interest the
development of TVNC to APTN and I'm curious as to the types of arrangements and
approaches that you're using to partner with or work with them.
9000 MR. GOURD: Indeed.
9001 And before I turn to Trina, maybe I could add
one more reminiscence, and it is that in my previous incarnation we had
partnered with APTN, as well, in order to distribute them -- it was at Cancom
throughout the country -- and therefore, for us, this partnership, including in
terms of ecotourism, is quite important.
9002 We have a programming agreement with APTN and
Trina will expand further. Trina.
9003 MS McQUEEN: As we said in the beginning of the
program, one of the things that we were intrigued by is the discovery that many
Europeans take special travel adventures -- and perhaps you have seen this or
know of it -- for aboriginal ecotourism. And it seemed to us that this, in
particular, was a rich source of stories -- not exportable maybe, as you have
said, but also interesting to Canadians.
9004 Most of the people who do this, they are often
Germans, French, people from Europe generally, but this seems to be a little bit
of a secret. So that was one of the programming ideas.
9005 We are talking to the people at TVNC and at
APTN and they have told us they are enthusiastic about working out
co-productions. And, obviously, they have the knowledge of the most wonderful
places and the freshest ideas that we can work with them on.
9006 COMMISSIONER WILLIAMS: Have you made contact
or connections with producers from the area -- aboriginal producers from the
north, for instance?
9007 MS McQUEEN: We have not. We have so far worked
with APTN and TVNC, but they have told us of producers. We haven't yet contacted
specific producers, but if you have some names we would be very grateful. Thank
9008 COMMISSIONER WILLIAMS: Okay.
9009 I'm going to move now to the proposed nature
of service area of question.
9010 In your application you said that any sports
programming elements should be short clips, representing, at most, a few minutes
within the 30-60 minute program and that the programming would be incidental to
the primary focus of the program, which is travel and tourism.
9011 Would you please confirm that you would accept
a nature of service condition of licence that does not include sports,
9012 MS McQUEEN: Yes.
9013 COMMISSIONER WILLIAMS: -- 6(a) or
9014 Yes. Thank you.
9015 MS McQUEEN: Yes, we did. And I believe we
wrote to you and told you that we had been overzealous. We were concerned that
in some travel programs, where we saw a shot of people at a soccer game, or
9016 COMMISSIONER WILLIAMS: Beach volley ball or
9017 MS McQUEEN: It's an Olympic sport -- that
might count as a category. But we understand now that that isn't necessary and
we are happy to drop that. There's no intention of carrying any kind of live
sports on the channel.
9018 COMMISSIONER WILLIAMS: Okay.
9019 You also propose to include drama categories
7(c) and (d) so that you can air "Travel Showcase", billed as the best travel
theme movies from around the world.
9020 How much drama programming per week would you
intend to schedule? And would you accept a limit on the amount of drama that you
9021 MS McQUEEN: Certainly. At present, we show one
movie per week, and I think that works out to less than 5 per cent. So we would
be happy to take a restriction of 5 per cent. But that is a very important
category. I think all of us who love to travel have been turned on to a
destination through a movie or through a dramatic program. So we would hope that
we would be able to continue scheduling that movie. And they would all be
related to travel.
9022 MR. MACDONALD: Commissioner Williams, as you
know, we are running a wheel and that movie, the one movie that Trina referred
to, is in prime time, just so that we are clear.
9023 COMMISSIONER WILLIAMS: Okay.
9024 Your application also includes category 8(b),
music video clips, in the nature of service, but not in your descriptions of
9025 Could you please describe how music videos
will fit into the travel genre?
9026 MS DUFFY-MacLEAN: Commissioner, I think that,
again, what we were looking at doing was offering every possible category of
travel in order to ensure that we covered the entire spectrum of what interests
people. And, again, anything that we did in music video would be restricted to
9027 COMMISSIONER WILLIAMS: Songs on the bus and
--- Laughter / Rires
9028 COMMISSIONER WILLIAMS: Okay.
9029 In Public Notice 1994-59...sorry, I've covered
that one, that was the filler programming.
9030 MS McQUEEN: Again, on categories of service,
there is no doubt that we did ask for quite a number of categories of service.
And reason for that, again, is that if you have a niche which is oriented to a
certain kind of interest -- same thing with MEN's -- I think you have to make
sure that you are expressing that interest in a number of different format. It
draws a lot of people to the channel who might not come if it was just
documentary after documentary. But this way, with a number of categories, we can
do news with "Destination Watch", documentaries, movies and it just makes the
kind of lively channel that we think will help a digital
9031 COMMISSIONER WILLIAMS: Yeah, I
9032 MR. MACDONALD: We were very concerned, as an
example, in sports -- if I can just go back to that for a second. I mean, there
are a number of people that enjoy going to the bug-a-boo specifically for that
kind of skiing. So is that travel or sports? Or going diving in the Cayman
Islands, or, my personal favourite, sailing in the Virgin Islands. But anyway,
has that become sports or travel? And we just wanted to go overboard rather than
9033 COMMISSIONER WILLIAMS: Be careful if you are
sailing, if that's your goal.
--- Laughter / Rires
9034 COMMISSIONER WILLIAMS: I note that some of
your proposed programming will focus on adventure and outdoor travel. How much
of the programming of Travel TV would duplicate or be similar to that of Outdoor
Life and how much would be duplicate or similar to that of the proposed
9035 MR. GOURD: Again, we were expecting that
question and I would like to ask Trina to provide the answer.
9036 MS McQUEEN: First of all, there would be
minimal duplication of this. Certainly the Exploration Network is not a travel
service in any way; it is a science service. It would be unusual for there to be
duplication. But in any case, we are happy to make a percentage commitment on
9037 Elizabeth, would you like to advise
9038 MS DUFFY-MacLEAN: Yes. Thank
9039 In Category 5(b) we are looking at about a 5
per cent maximum. I think you had two parts to that question. The other part was
Outdoor Life. I think the overlap again, back to what Trina said, would be
minimal. We have looked at that programming. As you have heard all day today,
there are synergies that each of the channels can look at, but we are looking at
a very significant original commitment in hours. So I see that as quite
9040 MS McQUEEN: I think the largest category that
we are looking for is Category 11, general entertainment and human interest.
That would be probably half the schedule.
9041 Other major categories would be news,
Categories 1 and 2(a), and long form documentary, with about 20 and 25 per cent
approximately. So the rest of the categories are really very
9042 COMMISSIONER WILLIAMS: Thank you. You propose
to broadcast daily 18 hours. You have submitted as Schedule 9 a program schedule
of six hours, from 18 to 24 hours. Should we conclude that your programming
wheel will repeat itself twice a day?
9043 MS McQUEEN: Is this another math in public
9044 COMMISSIONER WILLIAMS: No.
--- Laughter / Rires
9045 MS McQUEEN: Three times a day, I
9046 COMMISSIONER WILLIAMS: So is that 18 hours or
9047 MS McQUEEN: 18; six times
9048 COMMISSIONER WILLIAMS: Yes. Your math is good.
There is no question your math is good.
9049 A review of Goldfarb Study indicates that only
8 per cent would be strongly likely willing to pay for the service and that 42
per cent falls under the potential likelihood to subscribe.
9050 The research conducted by Goldfarb appears to
be silent on the monthly rate for this type of service when willingness to pay
9051 Can you tell us how you have linked your
research study with your subscription revenue projections?
9052 MR. GOURD: Jim, to introduce, and then Kathie
9053 MR. MACDONALD: Well, I would like to suggest
that we start with Kathie and then we will come back and show you how we put
together the projections.
9054 MR. GOURD: That is okay with me,
9055 MR. MACDONALD: Thank you.
9056 MS MACMILLAN: Commissioner Williams, we
formatted the questioning here the same as we did with the CTV submissions. So
we deliberately did not ask a specific price point because of the package
configuration that consumers currently buy and are familiar with. Instead, we
probed on the qualitative front.
9057 There, we found that on a stand-alone service,
people indicated that they would pay up to $5.00 for Travel TV without further
information and would pay up to $15 for Travel TV as part of a package. However,
the actual price point would depend on the other channels offered in the
9058 I would also suggest that when you look at the
strongly likely, at the 8 per cent at an additional charge, it is fairly similar
in terms of the proportion when compared to a competitive submission where they
looked at 30 per cent of the audience who would be likely to subscribe to
digital. Then amongst that 30 per cent who were likely to subscribe to digital
they asked "would you be willing to pay a dollar", and they came back to
approximately 30 per cent of the 30 per cent.
9059 My mental arithmetic says that it is fairly
close to the same number against the total sample.
9060 MR. MACDONALD: Thank you,
9061 Do you have any specific questions,
Commissioner Williams, of Ms Macmillan before we finish answering your
9062 COMMISSIONER WILLIAMS: No, I
9063 MR. MACDONALD: Okay. In this particular case,
we built the business model before we commissioned the research. The research
was used really to verify the business case, and I am glad it did verify the
--- Laughter / Rires
9064 MR. MACDONALD: However, I would like to ask
Nikki Moffat to share with you how our shadow TV application came
9065 I am teasing. It's a mystery. No, they were
very specific. We went through each area, and we worked out penetration levels.
I will ask Nikki to go through the details.
9066 MS MOFFAT: Thank you. Our subscriber level
assumptions are similar to what we just discussed in our CTV proposals. We took
a subscriber level of 822,000 in the first year of the service and rising to 3.3
million by the end of the licence term. That represents a total penetration
level of 44 per cent in the first year and rising to 70 per cent by the final
year of the licence.
9067 We really looked at a wholesale fee of 35
cents that is affordable to the consumer and will help facilitate the roll-out
9068 MR. MACDONALD: I think one of the things that
we looked at, aside from trying to develop a reasonable business plan -- and we
certainly think the penetration levels were reasonable -- was also looking at
the forecasts for digital penetration that were submitted by
9069 If you compare our total universe, which
starts at -- this is not the total subscribers but the total universe --
essentially 1.9 in year one, rising to 4.8 in year seven, actually our universe
was lower than CCTA's, at 2.4, and exactly spot on, therefore, at 4.8 in year
9070 So we felt pretty comfortable about the
universe, and we felt very reasonable about the penetration levels. That is how
we put it together.
9071 MR. GOURD: If I may, in order to make sure
that the figures do not appear mysterious, at least at the DTH level, for DTH
penetration of course we benefited from the experience of Bell ExpressVu and the
track record of the two Canadian direct to home licensees which in fact are
doing much better, for example, than their counterpart in the
9072 Therefore, based on that, we have also
finalized our penetration forecast in the DTH universe as well.
9073 COMMISSIONER WILLIAMS: Just further on your
business plan, in your assumptions you indicated that your service would be
distributed to all cable, DTH and MDS Canadian distributors. Your financial
projections do not include any projection for MDS distributions.
9074 Can you tell us why you have not projected any
revenues from this source of distribution?
9075 MS MOFFAT: It is actually included in our DTH
assumptions. It just was not labelled as such on the scheduled that is
9076 COMMISSIONER WILLIAMS: So it is
9077 MS MOFFAT: Yes.
9078 COMMISSIONER WILLIAMS: Do you know the
9079 MS MOFFAT: I believe it was 20,000 subscribers
in the first year, actual subscribers for the service, and rising to 150,000
subscribers by the end of the licence term.
9080 COMMISSIONER WILLIAMS: Okay; thank
9081 What impact do you expect interactive
subscriber input to have on the programming development of Travel
9082 MR. GOURD: Trina, in terms of impact on the
content on the way we develop the programming?
9083 MS McQUEEN: Commissioner Williams, you have
put your finger on a use for interactivity that I think is like a hidden part of
9084 One of the things about television is that we
know really relatively less about television viewers than most retailers do
about their customers because of the way viewers are measured. We cannot track a
single purchaser as any retailer can track a single purchaser.
9085 So although we have broad ideas and although
we use surveys such as Kathie Macmillan's to underscore those ideas and give us
more context, the interactivity where viewers actually tell us what they like is
of considerable value to us.
9086 When we were doing the Discovery Channel --
when I was at the Discovery Channel, we would often put on programs and take
them off based on our Web site and what people were telling us about programs.
In fact, at one time we ran -- and I think Pay Movies does this too, where
viewers would choose their own Sunday showcase from a menu via
9087 This builds a community of viewers. And again,
in making digital attractive, I think what we are all trying to do is build
communities, not just kind of passive television but a kind of television that
becomes part of your interests and part of your life.
9088 So the ability to understand customers and to
give them control and influence, strong influence, over our programming schedule
is an absolute boon for interactivity.
9089 MS MACMILLAN: Commissioner, if I might add,
when you look at, you know, the evolution of how the interactivity will come
along -- and there's been a lot of discussion over the past two days of what
that's like -- but when we spoke to our focus group respondents, they were
particularly interested in the interactivity for a travel channel and they found
it highly relevant. They indicated they would like to see programming
applications that include links to events, deals on travel, feedback, access to
pictures of destinations, but, further, the interactive component of Travel TV
intrigues participants whose interests lies in the potential for gathering
further information about something they may have seen on Travel TV. Although
participants recognize that interactive television technologies are not yet
readily available, another revolution in the role of television is expected, and
welcomed, in the near future.
9090 COMMISSIONER WILLIAMS: Thank
9091 A few more questions on the set-top box and
then I'm done. We will see what awaits you after that.
--- Laughter / Rires
9092 COMMISSIONER WILLIAMS: Have you consulted with
equipment manufacturers in preparing this proposal? And if so,
9093 MR. GOURD: Yes, through ExpressVu, we have
consulted with our main supplier, Echostar Communication, from the U.S. Not only
have we consulted but we have tested various boxes in our laboratory, in the
Toronto area. We have tested ITV boxes and also, not only the box itself but
also the software you use for the download, because a set-top box can
accommodate various kinds of middleware or software that allow to trigger the
interactivity of the box. And we have also consulted Echostar, and others,
pertaining to the next generation of boxes, which would be Step 3, the box with
Web TV interactivity, and these ones we are still testing as we
9094 COMMISSIONER WILLIAMS: Are these boxes that
you have talked to Echostar about, are they compatible for use in a cable
9095 MR. GOURD: The characteristics of each
distribution system are such that DTH requires a box which is what we call,
perhaps incorrectly, a "broadcast mode", where all the information is broadcast
all the time, while cable -- and which is more oriented at the T.V. screen --
while cable is probably more oriented at Internet-based interactivity, both on
the T.V. screen and on the computer.
9096 So, in a nutshell, it's two different
technologies, while there is a common root, which is the interactivity -- but
for the consumer, it's two different technologies.
9097 MR. MACDONALD: We did look at the G.I., the
General Instruments DCT 2000 box which is being deployed by Shaw and Cogeco. But
this box is really not capable of actual full-up interactive. So we have to look
at the next generation of G.I. boxes.
9098 Rogers is currently looking at the Scientific
Atlanta Explorer 2000 box. The current version allows some level but it really
isn't there yet, so there will be a next level of box that has to come along
before we get to the level that we have been talking about.
9099 MR. GOURD: It goes without saying that each
distributor, including Bell ExpressVu, tries to stay at the leading edge of
technology because it is one of the selling features of the new digital
distributor and, therefore, boxes are tested all the time to make sure that you
are always one step ahead of the other distributors, it goes without
9100 MR. MACDONALD: Just to confuse it even more,
I'm sure you have heard of Web TV, which is distributed by Microsoft, and, of
course, that was really, I think, the first notion that most of us had about
truly interactive television because they got out into the market quickly and it
was the box that was positioned as interactive.
9101 We don't know how many Web TV boxes there are
in Canada. Experts have guesstimated that there are approximately 10,000 boxes
-- which is not particularly large -- and that probably half of those boxes are
what was referred to as the "Web TV Classic" and that the "Web TV Plus" box is
only probably 5,000 -- and that would be the box that would be required for the
interactivity that we have been talking about.
9102 COMMISSIONER WILLIAMS: The interactivity that
you are talking about in the medium to longer term -- apart from the set-top
box, what other hardware or software will be necessary to use your full-service
offering? For example, would a digital video camera or a remote keyboard be
required? And if so, how would you propose to recover the costs of these
9103 MR. GOURD: Jim, would you like to answer. And
9104 MR. MACDONALD: Well, the first piece of
equipment you have to have, of course, is a television.
--- Laughter / Rires
9105 MR. MACDONALD: We want our application to be
9106 I want to go back, really, to what Alain said,
which is that we see the equipment as really being the responsibility of the
distributor and we expect that the equipment package will be put together by the
distributor. Certainly, there could be add-ons that could work in conjunction
with different kinds of boxes. One, as you suggested, would be an interactive or
an infrared keyboard. A camera could be added. But we don't see that as
something we are likely to do.
9107 Most of the interactivity that we are talking
about will be generated off of the remote, and the keyboard will allow, you
know, different levels of access and to drill down in a different
9108 Trina, do you have anything to
9109 MS McQUEEN: I don't know whether I can
successfully add much about the interactivity.
9110 I guess one of the things that we talked about
in the news application was the ability to send back pictures, very
successfully, with these little tiny digital eyes, and it certainly is true that
one of the great synergies of this application is that if you take TVA, Canal
Évasion, CTV, Discovery, Outdoor Life, TSN -- I don't know, Daniel, how many
crews that would be in spots around the world capable of sending back to Travel
TV digital pictures, videostreaming, of a marvel of places on the planet, and in
Canada -- not that Canada's not on the planet. But certainly one of our great
strengths is that we have so much ability to tap into people on the ground who
are capable of sending digital pictures back which, then, can give Canadians a
really clear idea of what is out there on a timely basis.
9111 MR. LAMARRE: I think what we are discovering
in working as a consortium here is, as you have seen for the last two days,
there is a lot of questions not answered about interactivity. But the one thing
which is very positive about what is happening in this forum is that a lot of
people are talking to a lot of people, and we discovered, within BCE and CTV and
ourselves exchanging about the kind of tests we are doing in all of our mini
labs because -- just to give you an idea, LCN is probably state of the art, in
terms of all the digital equipment, and that's easy to say because the latest
venue in a category is always the one who has the state-of-the-art equipment.
So, in the news category, we are, and so we have a lot of digital equipment
which is working internally. But when all the technology will be in place, we
would be in a much better position to exchange much more with CTV. We already
have a lot of exchange with them on the News Channel and in all of our
facilities. So, I guess the bottom line is there is a lot of ways that the
consortium like the one you are having in front of you today can bring together
not only a knowledge but an infrastructure in this country, and abroad, that
will help to bring some more interesting interactive products for the
9112 MR. MACDONALD: And while we may have to wait a
little bit for the broadband strategy to actually evolve, one of the most
exciting things about what we are proposing is the opportunity bring people
together and share travel experiences. I mean travel is not all just a lot of
fun, these days. I mean some of it is, but we travel for a whole bunch of
different reasons. And the opportunity to share experiences and routing and so
on and so forth is really interesting, and hotels to go to, why you go to this
place, why you don't go to that place deals that different people become aware
of, and you have probably been involved in some of the mail groups, but there's
a tremendous amount of very valuable information that can happen. And I think
that's going to be a really exciting part of what this is all about, just the
opportunity to bring the community together, the community of
9113 MS McQUEEN: And that goes to your point about
bringing, Commissioner, the viewers in to be part of the channel and to give
their input and their influences.
9114 One of the things that this channel is
committed to is straight talk about travel. That is what Destination Watch is.
It is where you will find out that something that is called the "Rose and Honey
Bed and Breakfast" is actually next to a pig farm. Or it won't tell you about a
secluded lake without telling you when the blackfly season is at that secluded
9115 I think that in order to get that kind of
information the viewers are a wonderful source.
9116 So there is a kind of creativity going on
between the channel and its viewers, the best synergy of all, that produces
better programs for everyone.
9117 COMMISSIONER WILLIAMS: My son just returned
yesterday from three months in South America, and prior to that six months in
China, and prior to that God knows where, so I know that he is a very
experienced traveller for a young man now, having been to --
9118 MR. MACDONALD: Would he like to be a
--- Laughter / Rires
9119 COMMISSIONER WILLIAMS: I am certainly not
promoting any form of employment for him, but I can see --
9120 THE CHAIRPERSON: Madam Chair, get your
--- Laughter / Rires
9121 COMMISSIONER WILLIAMS: I can see where he
would certainly be an avid viewer of a service like yours.
9122 MS McQUEEN: Just out of interest, did he
communicate with you by e-mail while he was away?
9123 COMMISSIONER WILLIAMS: Yes, all by
9124 MS McQUEEN: That is just an example of how
this kind of thing ties people together in different countries.
9125 COMMISSIONER WILLIAMS: A little more on set
9126 Given that certain types of interactive
television necessitate a return path which would provide viewers with
instantaneous responses to their requests, will you be considering alternative
forms of distribution for your service? And are there other solutions to this
potential limitation to the development of interactive television that DTH
current satellite technology imposes? I have heard the broadband solution coming
down the road.
9127 MR. GOURD: I will ask Jim to elaborate on the
approaches of the service proper, and then, if needed, I could add information
pertaining to DTH distribution.
9129 MR. MACDONALD: Oh, give me the return
--- Laughter / Rires
9130 MR. MACDONALD: I don't pretend to be
particularly technologically driven. The return path -- obviously, the
speed of the return path is going to be critical to instantaneous delivery, but
we think that it is going to be more of an issue for the BDUs when it comes to
their introduction of things like interactive games, which we expect to be a big
part of what they will do with interactive.
9131 In other words, the ability for two people to
be competing in a game at the same time from different parts of the country
obviously requires that there can't be any latency in the return path at
9132 I think that what we have seen from certainly
the discussions we have had with ExpressVu and conversations we have had with
Bell, through the Bell labs, because they are certainly working on this as well,
is that return path should not be an issue for us, given the bit rate of service
that we have and the type of service that we have. It may be for others, but we
don't anticipate that it is going to be for us.
9133 MR. GOURD: And from a Bell ExpressVu
perspective, we agree absolutely with that assessment. The return path, of
course, in the case of direct-to-home, for the time being, is the telephone
line, whether for satellite-based Internet to the computer or interactivity on
the TV screen.
9134 I have to say, however, that in terms of our
second step, which is interactivity on the TV screen, a phone line is required
mainly for e-commerce, because the main programming interactivity is between the
remote control and the decoder, because since it is a broadcast mode all of the
information is sent to the set-top box.
9135 Let's take the example of weather information.
We will send all of the time all of the information -- not every second,
but let's say every 15 minutes -- for all of Canada and its main localities
to all of the set-top boxes. So if you are a subscriber, a view who wishes to
know more about Ottawa, you would press "Ontario", and then you would press
"Ottawa", and you would have the weather condition pertaining to Ottawa. Then
you might need more information about the road conditions, so you would press
once more and you progress into the information.
9136 But that interactivity doesn't require a phone
line. It is rapid, fast, between the remote control and the set-top box and the
TV set. It goes without saying.
9137 COMMISSIONER WILLIAMS: Before I hand you back
to our charming Chair, my colleague Chairperson Wylie, do you feel that your
application has been given a fair hearing, and do you have any information that
you wish to add that we haven't been able to bring out?
9138 MR. MACDONALD: If we get the licence it will
have been a fair hearing.
--- Laughter / Rires
9139 MR. GOURD: Having said
9140 THE CHAIRPERSON: A judge would not be
impressed with that.
--- Laughter / Rires
9141 COMMISSIONER WILLIAMS: It is certainly a
9142 MR. GOURD: It has been very comprehensive.
Indeed, it has been most stimulating, most interesting.
9143 Maybe Trina would wish to add some
9144 MS McQUEEN: Just to go over with you the major
points that we want to leave you with, Travel TV has one of the highest Canadian
content rates, at 53 per cent; the highest percentage expenditure commitment;
and an affordable rate of 35 cents; high original hours, even though not quite
as high as I first told you.
9145 We believe that among its other strengths is
that this is clearly a Canadian application. It brings together cultural
diversity and insights right in the partnership of the channel. It brings
together programming expertise and interactive expertise through its
9146 So it is a made-in-Canada travel
9147 Those are the messages that we would like to
leave you with.
9148 THE CHAIRPERSON: Before we start impeaching
the Chair, we will allow her a few questions.
--- Laughter / Rires
9149 CHAIRPERSON OF THE COMMISSION: Thank
9150 Coming back to the issue and the concern we
have over the matter of independent producer -- le montant de programmes
autorisés pour les producteurs indépendants.
9151 You have established that what you consider an
independent producer is anything that is above 66. "Above" or "below", I didn't
know which word to use.
9152 But that answers only part of the question.
What about the amount of production that would be confined to any affiliated,
independent producer? Is there a percentage that you --
9153 First, there is the question: Do you think in
the digital world that we should still have that concern?
9154 I repeat what our brilliant Chair has been
saying all along. We are raising the question. We are not saying it has to be
there; we are raising the question and we are asking: Is there a necessity in
the new world to impose what we had in the analog world?
9155 I think the framework we have put together
shows that we are capable of seeing that it is a different world and it takes
different parameters in order to really meet those challenges.
9156 So we are not expecting and we don't want you
to say yes just because you want the licence; we really want to hear what is
your point of view, because you have done the studies and the business plans and
you know more than we do in terms of what is really feasible and
9157 Do you think it is still necessary in the
digital world to impose those kinds of measures? If so, what would be for you
9158 Thirdly, the consideration of shareholders,
like TVA being part, or CTV, what will be the in-house production -- the
limit? Is there a limit that you see as shareholders that would come? Because it
is a different thing.
9159 As partners, do you see that you will be kind
of sharing between you, with your expertise, in terms of the commitments you are
9160 MR. GOURD: Madam Chairperson, first a general
comment. Somebody said earlier that digital interactive distribution -- I
think it was Ivan -- it is a platform.
9161 What is important is the programming, and the
broadcasting system has been in constant evolution but building more strength in
terms of programming, developing approaches, developing trends, including
regulatory trends, which have served the system well. Therefore, we do not see
from these regulatory/programming/production trends sudden transformations that
would eliminate totally approaches that have served us well in the
9162 That was the general comment I wanted to make.
Yes, it is an important step in the journey, but it is not suddenly a new planet
or a new travel destination.
9163 Trina, on other dimensions...?
9164 MS McQUEEN: My understanding is that in the
Broadcasting Act it says that there must be a substantial contribution by
independent producers. Even if it weren't in the act, I think that most
broadcasters need independent producers. They bring diversity, fresh ideas,
funds that they raise on their own to any program service.
9165 In this digital world I think we are seeing
two things happening. One is the desire for original programming, which we have
talked about a great deal. The second question is, with the limited initial
budgets of these channels, how can they do original programming?
9166 The answer for many of them is to develop
in-house flagship shows that brand the channel and give it a consumer perception
and a visibility.
9167 Most of these flagship shows can be most
efficiently done in-house. So I think as we move from one stage in the evolution
of television to another, the role of the independent producer
9168 For example, one of the things that happens in
these in-house is that they give employment to a number of producers who are
starting out and more and more there are fewer and fewer places for producers to
get training in television, the basics of television. Unfortunately there have
been so many cutbacks in in-house programs that that doesn't exist any
9169 Many of the producers that we see having
independent companies now started out working on this kind of in-house daily
show, getting to understand the rudiments of television production and
television techniques. So I think there is a place -- I don't like to call
the bottom, but an entry level where a producer can come and get
9170 Many, many times we will see these people go
on to form their own independent production companies and go from there. We also
see that many very small independent production companies like to have a place
where they can actually go for three to six months and have a salary and some
benefits while they are working on raising funding for their next truly
independent production. So these shows do provide a forum for those small
independent producers to come in and out and have some financial stability and
9171 Third, there are people who do not want to
work for a company, whether it's Travel TV or CTV, but who produce a kind of
programming because they love to do it and are happy to do it without owning the
rights to it, and it seems to us that this kind of producer often works for
channels like Outdoor Life or like Travel. They are "travelholics", if that is a
word, they are addicted to travel and the idea that they could get paid for
doing what they love and bringing back a program is good for
9172 All of this long-winded answer is to say that
we think the in-house flagship show does provide some benefits for people who
either are or will be independent producers. It seems to us that after that, we
have heard different versions of what they would like from independent producers
and you will be talking to the Producers Association. Some people say they would
like fewer hours with higher budgets. Others like large volume with lower
9173 So it seems to us that there should be a
variety of arrangements with independent production in these channels, that it
shouldn't be a kind of one size fits all, but it should relate to the genre, it
should relate to the cost-base of the channel and it should relate to basically
how the channel provider sees the most original hours that fit the genre of the
9174 So those are some words about independent
producers. Yes, we think there should be a commitment by each channel, but the
commitment should vary depending on the genre and nature of the
9175 MR. GOURD: Thank you, Trina.
9176 Jim, about our commitment.
9177 MR. MACDONALD: Thank you very
9178 I think that Trina made some excellent points
and I would like to just share with you some of the business side of putting
9179 When we started putting the application
together we knew that, as I alluded to Ivan earlier, we would really to have to
be nimble that the subscription base was likely to be very skinny and how could
we get the maximum amount of programming most efficiently.
9180 As Trina suggested, there was in-house
programming based around Destination Watch. But our conclusion was that many of
the shows we wanted to do were best done by the independent production sector,
including the shows that we would be doing with Canal Évasion. It wasn't a
co-production. It was a joint commissioning through the independent production
9181 So at the end of the day when we finished what
would work best and how it would all line up, we came to the conclusion that
about 30 to 33 per cent of our overall Canadian programming budget would in fact
be committed to the independent production sector. That works out to be about
$13.5 million. But that is how it worked out in our particular programming and
how we put it together.
9182 CHAIRPERSON OF THE COMMISSION: Thank you very
9183 THE CHAIRPERSON: Counsel.
9184 MR. McCALLUM: Would that translate into a
certain percentage of programming, the $13.5 million?
9185 MR. MACDONALD: No, we didn't look at it in
terms of number of hours because number of hours can become very confusing. We
simply looked at it how we saw the overall portion of our Canadian spending
going to the independent production community and, as I said, it was somewhere
between 30 and 33 per cent or $13.5 million.
9186 Mr. McCALLUM: Thank you.
9187 Just on the music videos, or music video
clips, Category 8(b). Would you propose any sort of limit to the amount or the
number of the percentage that you would offer in this service?
9188 MS McQUEEN: Five per cent or less would be a
satisfactory number to us.
9189 MR. McCALLUM: And that is related to the
number of hours?
9190 MS McQUEEN: That would be 5 per cent of the
number of hours of programming, yes.
9191 MR. McCALLUM: Thank you. Thank you, Madam
9192 LA PRÉSIDENTE: Madame
9193 LA PRÉSIDENTE DU CONSEIL: Avec l'aide de ma
collègue, j'ai une question supplémentaire.
9194 About the independent producers, I understand
the 33 per cent, the program budget. What has happened to the affiliate
producers of TVA? Would they be considered totally independent producers or
would they be --
9195 MR. GOURD: They would be covered,
9196 CHAIRPERSON OF THE COMMISSION: So they
would -- when we say program 30 to 33 per cent to independent producers, it
is not affiliated -- pas affiliés ni à CTV ni à BCE ni à TVA ni à Canal
9197 M. GOURD: Exactement,
9198 THE CHAIRPERSON: And it would not be relevant
on the actual ownership proportion of TVA and Travel TV.
9199 MR. GOURD: I think it is very important that
we give a clear message and if we start to make, I think you will agree,
distinction between shareholders having 40 per cent, one having 10 per cent,
it's not clear, it becomes ambiguous.
9200 THE CHAIRPERSON: Maybe Ms Robinson will help
us with that later on in the process because this is complicated further in this
case. Just off the top of my head, I would not be prepared to get into because
it is a partnership as well, et cetera.
9201 MR. GOURD: But --
9202 THE CHAIRPERSON: Some work for you, Madame
Robinson. Sorry, Mr. Fecan.
9203 MR. GOURD: But Madam Chairperson, behind the
important legal consideration, I think there has to be a substantive message and
it is that independent producers have to be independent.
9204 THE CHAIRPERSON: Exactly. But from there, if
there is to be equity and fairness, we have to find some way of defining it so
it is applicable everywhere.
9205 MR. GOURD: And we will definitely rely on
Kathryn Robinson to shed light on that.
9206 THE CHAIRPERSON: Yes, it has been brought up
with a number of applicants.
9207 MR. GOURD: Yes, certainly.
9208 THE CHAIRPERSON: I think that concludes our
questioning and we thank you. We apologize for keeping you so late, but we have
remained interested even though we were here at 8:30 this
9209 MR. GOURD: Thank you.
9210 On espère que vous avez fait un bon voyage
9211 MR. MACDONALD: And we would like to thank the
Commission and the staff who have been fabulous throughout this whole process.
They work very hard and they very rarely get acknowledged, but we thank them
very much for everything.
9212 THE CHAIRPERSON: You don't know how well we
--- Laughter / Rires
9213 Alors ça complète la journée et nous
reprendrons à 8 h 30 demain matin.
9214 We will resume at 8:30 in the morning.
--- Whereupon the hearing adjourned at 1835, to resume
at 0830 on Wednesday, August 16, 2000 / L'audience
est ajournée à 1835 pour reprendre le mercredi
16 août à 0830