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 21, 2000 le 21 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
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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 21, 2000 le 21 août 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
PRÉSENTATION PAR / PRESENTATION PAR
STORNOWAY COMMUNICATIONS LIMITED PARTNERSHIP 1789
PRÉSENTATION PAR / PRESENTATION PAR
THE PELMOREX LEISURE NETWORK INC. /
Le RÉSEAU LOISIRS PELMOREX INC. 1934
PRÉSENTATION PAR / PRESENTATION PAR
NEW DAY MINISTRIES INC. 1995
Hull (Québec) / Hull, Quebec
--- L'audience reprend le lundi 21 août à 0830 /
Upon resuming on Monday, August 21, 2000 at 0830
15213 THE CHAIRPERSON: Good
15214 Bonjour et nous vous souhaitons la bienvenue
à la deuxième semaine de notre audience.
15215 Monsieur le Secrétaire. Mr. Secretary,
15216 MR. CUSSONS: Thank you, Madam
15217 Before announcing our first applicant today,
I would just like to mention the withdrawal of the Category 1 application
by Home Interactive Television, which would have been heard later in our
15218 At the same time, Home Interactive Television
still wishes to proceed with the two Category 2 applications gazetted for
15219 I would now like to introduce Stornoway
Communications Limited Partnership.
15220 Stornoway is proposing four new
Category 1 services, therefore they are entitled to a maximum presentation
time of 35 minutes, and these four services would be @work.ca, Issues Channel,
The Dance Channel and The Pet Network.
15221 We have Ms Martha Fusca and her
15222 Ms Fusca.
PRESENTATION / PRÉSENTATION
15223 MS M. FUSCA: Thank you.
15224 Good morning, Madam Chair and Commissioners.
Before we begin our presentation today, I would like to present to you our
15225 My name is Martha Fusca and I am President
and Chief Executive Officer of Stornoway Communications. In 1983 my husband,
Kitson Vincent and I co-founded Stornoway productions, the lead partner of
Stornoway Communications. As President for the past seven years, I have managed
a successful operation producing and distributing documentaries, series and
15226 To my left is Bill Gray, Executive
Vice-President of Stornoway Communications and General manager of our four
channels. Mr. Gray is former General Manager of Prime TV and a
15227 To his left is Nancy Smith, CEO of Next
Media, Stornoway's advertising agency and new media consultant.
15228 To my right is Don Richardson, our
Vice-President, Business Affairs, Original Independent
15229 To his right is Julia Walden, President of
Borden Street, our partner in new media business and production
15230 In the second row, starting from your right,
is Stu Turner, our Senior Vice-President, Operations and Advanced Technical
Planning. Mr. Turner was formerly Director of Operations at YTV and
conducted both the launches of YTV and Treehouse.
15231 Next to Mr. Turner is Inta Erwin, our
Vice-President of Program Acquisitions and Distribution.
15232 Next to Ms Erwin is Michel Carter,
Vice-President and General Manager of Cogeco Radio-Television.
15233 On Mr. Carter's right is Dr. Gerry Wall,
President of Wall Communications Inc. Dr. Wall co-ordinated our market research
with Decima and assisted in the preparation of our business
15234 Next to Dr. Wall is John Hylton, Q.C., of
Borden, Ladner, Gervais, our legal counsel.
15235 On the side panel, starting on the far left
is Terry-Anne Boyles, Vice-President of the Association of Canadian Community
Colleges; Dennis Murphy, writer/director, formerly with the National Film Board
and TVOntario; choreographer Clarence Ford and Sean Debidin; Victoria Fusca,
Vice-President, Program Development, Stornoway Communications; Sheldon
Ehrenworth, founding President of the Collegium for Work and Learning and the
founder of the Public Policy Forum; Paul Kemp, Producer for Stornoway
Productions; Louis McCann of the Pet Industries Joint Advisory Council, and Oleh
Iwanyshyn, Director of Research for ViewStats Research Inc.
15236 We are also very pleased today to have our
advisory board, a highly regarded and experienced team who will work with our
board of directors on broad policy issues: Senator Céline Hervieux-Payette,
Senator Erminie Cohen, Gordon Ashworth and Diane Lam.
15237 As well as our consultative committee members
on our side panel, many of whom are here today, Senator Catherine Callbeck; Bob
Van Tangerloo, Executive Director of the Canadian Federation of Humane
Societies; our legendary Celia Franca, founder of the National Ballet of Canada;
Jim Byrd, former CBC Vice-President of English Television; Dr. Sarah Bassett,
London-based veterinarian; and Don Devoretz, Professor of Economics at Simon
15238 We are also joined by Kitson Vincent and Mark
Curry, the principals of Stornoway's Investors group, and Louis Audet, Chair,
President and CEO of Cogeco Radio-Television.
15239 Madam Chair, we would now like to begin our
15240 THE CHAIRPERSON: Ms Fusca, we hope that you
will slow down your delivery because we have simultaneous
15241 I'm putting Mr. Gray in charge of reminding
you so I don't have to do it.
15242 MS M. FUSCA: I'm sorry.
15243 We are here today to present our applications
for four digital licences: Issues Channel, The Dance Channel, The Pet Network
15244 This hearing offers a significant opportunity
for the Commission to maintain, and indeed promote, a healthy balance of
programming by adding new voices to counter the ever more concentrated broadcast
universe. Stornoway Communications is one of these new voices.
15245 This dynamic partnership between Stornoway
Productions and Cogeco Radio-Television is based on a shared vision of creative
business acumen and innovation.
15246 This highly creative team of English and
French Canadian businesses will provide exciting new broadcast services and a
commitment to interactive broadcasting that will ensure that the terms of the
Broadcasting Act become a living, breathing reality and meet the needs and
desires of Canadian audiences.
15247 The creative and business success of the
partners in this new company run strong and deep. We have a highly experienced
team fully capable of launching and operating new services. We have created four
distinctive television channels, innovative and new.
15248 We have created them with passion and
enthusiasm, achieving the objectives of this call, with a conservative eye on
our business plans and backed by solid financial commitments.
15249 Our services will provide diversity in the
Canadian broadcasting system with innovative programming schedules, a leading
edge interactive strategy and new viewing choices Canadians do not now have.
Hundreds of letters of support, representing millions of Canadians, attest to
the major contribution we can make to the economic, social, cultural and
political life of our country. We will use the new technologies to develop,
produce and distribute high levels of original Canadian content.
15250 As evidence of the desirability of our
services, we are very pleased to announce that prior to these hearings Stornoway
Communications signed a master agreement for carriage of all of our four
channels with the Canadian Cable Systems Alliance. This agreement was made at
the same subscriber rates presented in our applications.
15251 We would now like to share some further
thoughts with you with a video presentation.
--- Video presentation / Présentation vidéo
15252 MS M. FUSCA: Madam Chair and Commissioners,
we would now like to address the specifics of each of our
15253 MR. GRAY: Issues Channel. With the explosion
of television options that have come before viewers in the past few years, we
have seen an ever-increasing number of sources of information. But where on the
dial can we find a comprehensive service completely devoted to the ongoing
discussion of public and social affairs not in the news?
15254 Where can we find in-depth analysis and
opinion in respect of concerns not in the headlines, even though they affect the
day-to-day lives of Canadians? Where can we go for context? Where can we turn to
discuss, vent and explore our values, concerns and attitudes along with the rest
of the country?
15255 Issues Channel is the answer. Designed to
engage. It's about our country, our idea. Whether it's agricultural matters,
medical ethics, technological safety, consumer problems, child-rearing, drug
use, legal and otherwise, all, and much more, are topics deserving of continuing
15256 Dynamic new initiatives for Issues Channel
include New Voices which will be exclusively produced by 17 to 24 year olds. For
the first time young Canadians will be part of the national dialogue. Ombudsman
will provide a national forum for those who seek help.
15257 Two Solitudes: An Uncommon Dialogue will
introduce a much needed venue for ongoing discourse between our founding French
and English peoples. First Nations, created for and by aboriginal broadcasters
in partnership with Issues Channel.
15258 Connections will be a quarterly long forum
investigative report focusing on matters that affect the nation from the
underground economy to air safety, hospital care or organized
15259 Issues Channel is committed to fulfilling a
fundamental need not now being served by providing Canadians with comprehensive
context on events in our own country and abroad.
15260 If news and conventional broadcast of current
affairs programming can be seen as the tip of a floating iceberg, Issues Channel
will take you below the water line where the vast bulk and irregular shape of
15261 We will present a wide range of
views -- divergent, thoughtful and thought-provoking. Issues Channel
will take the time to find out what people care about. We will explore and
follow topics throughout the life of their impact and importance to Canadians
rather than simply reacting to the temporary prominence of a news item or the
broadcast of a one off documentary.
15262 Issues Channel will be the place to go for
those who want more, who want to understand the complexities, who want to focus
on discussion as they formulate their own opinions.
15263 The new technologies are a perfect match for
a quality service dedicated to connecting and engaging people from every region
of Canada. Interactivity will be a valuable tool to enable us to seek out and
receive input directly from Canadians. This interactive engagement with our
audience will help shape the content of our service. Canadians want this kind of
channel on their television. Our independent research confirms an interest level
of almost 60 per cent.
15264 In the process of providing Canadian viewers
with a vast and creatively diverse forum ranging from domestic concerns to
international affairs, Issues Channel has much to offer the Canadian broadcast
system. Beginning in year one, Canadian content will occupy a minimum of 55 per
cent of our broadcast day, rising to at least 65 per cent by year
15265 This means more than $42 million spent over
the term of the licence on Canadian programming of which almost $12.5 million
will go to independent Canadian producers. This represents 76 per cent of all
15266 Documentaries, talk shows, forums, magazine
programs, debates, occasional movies. Comprehensive and affordable at a
wholesale rate of 35 cents per subscriber.
15267 Issues Channel will be an exciting and
indispensable broker of ideas, of points of view, of knowledge, of values, of
15268 MS M. FUSCA: The Dance Channel. Dance is a
universal language. It is an expression of culture and history, the translation
of ideas, values, attitudes and emotions. Dance has given mankind a sense of
belonging during times of hardship, of war, of poverty, of oppression. Dance
allows all of us to leave our everyday lives and to enter into the blissful
realm of the spirit. Dance in its many forms has developed, grown and evolved in
every culture on this planet. Now there will be a television service devoted
entirely to what the Greeks call a gift from the immortals:
15269 Our broadcast schedule is designed to engage
a broad multicultural, multiracial audience from every region of this
15270 Programs such as Dance News and Romancing the
Past will serve as a cultural focal point to help bring both audiences and the
dance communities from across the country together. The Dance Channel is a major
cultural initiative for this country in a significant performing art which is
seriously under-represented on our broadcast system today.
15271 We will all have an opportunity to watch, to
learn, to be enlightened and entertained by the teachers, the choreographers,
people who dance for a living and those who do it for fun. We will explore the
purposes of dance, the rigours of training, the creation of new forms, the
history of dance.
15272 And there is something here for everyone from
Webcast.Dancecast for the net generation to dance and a movie for those who
prefer to sit back and think back. And for viewers who want to plug in and
charge up their bodies, we will have instructional series, Dance Lessons and
Dancefit, with schedules tuned into our viewers morning, noon and
15273 We are very excited about the opportunities
and the initiatives this channel affords the broadcast system, Canadian
audiences and the independent sector as well as the dance community itself. For
example, we will drive the independent production of Canadian dance films by
providing a new source of licence fees.
15274 We also plan a regional teen competition that
culminates in a national competition in year three, with a regional competition
and a U.S. challenge in year four. The enthusiasm for this initiative from every
province and the territories has been spectacular. And the Dance Channel's
Annual Celebrity Ball will celebrate a different kind of dance each year with
the proceeds going to charity.
15275 This channel provides outstanding value at an
affordable wholesale subscription rate of 39 cents, Over the seven years,
original Canadian production represents 64 per cent of total programming
expenditures or more than $20 million with over $7 million going to
15276 We have committed to spending 35 per cent of
each previous year's gross revenues on Canadian programming. This reflects
Canadian programming content that begins with 55 per cent, rising to a minimum
of 65 per cent.
15277 Our market research tells us that 40 per
cent of current digital subscribers and future subscribers will want the Dance
Channel. What's more, 19 per cent of TV households who are not digital and do
not plan to be would go out and get a digital set top box if that was the only
way they could get the Dance Channel.
15278 The Dance Channel will be historic and
contemporary, both traditional and hip, allowing viewers to make the connections
between them. As parents and grandparents continue to waltz to the gentle sounds
of years, their children and grandchildren, rock, swing and rave, finding their
own rhythm in this universal instinct.
15279 MR. GRAY: The Pet Network. A couple of years
ago, finally succumbing to years of pressure from my children, I purchased a
dog, an Old English Sheepdog. Brilliantly, within an hour of bringing the young
puppy home, it occurred to me to surf the net to see if I could find out
something about the breed.
15280 I was astonished, not only by the enormous
number of commercial sites wanting to sell me dogs themselves as well as related
products, but by the astounding number of personal Web sites about particular
Sheepdogs, their families, histories, habits and care requirements. There were
stories purported to have been written by individual dogs, tales of family
outings featuring dogs, first day home anecdotes, requiems for dogs who had
passed on and pictures, pictures, pictures.
15281 These sites were the result of a great deal
of time, effort, care and passion. And I was only researching sheepdogs! It
became very clear to me that pet owners are themselves quite a
15282 Add to that the fact that more than half of
Canadian households keep pets and it is obvious that a specialty service devoted
to them is a must. A large, at least semi-obsessed audience is a natural for its
own channel: The Pet Network.
15283 Dogs, ponies, budgies, cats. Ferrets,
gerbils, parrots, rats. Little boys, old ladies, moms and dads. Waiters,
plumbers, techies, grads. This service is for everyone, and our independent
research confirms that almost 50 per cent of current and future digital
15284 And we will do it, while at the same time
making major contributions to the broadcast system. At least 55 per cent
Canadian content in year one, growing to a minimum of 65 per cent in year seven.
We will spend more than $24 million on Canadian programming, almost $7 million
of it with independent producers in Canada. This amounts to 71 per cent of total
15285 The Pet Network will explore the worlds of
pets wherever they are. People from all walks of life, cultures and ethnic
origins care for pets. They and their familiars will be an integral part of our
15286 And we will use our special relationships
with the Canadian Federation of Humane Societies and the Pet Industries Advisory
Council to be sure we cover all the bases.
15287 The schedule will include programs for
general audiences, for children, for seniors. There will be shows about
veterinary medicine, training, pet behaviour. We will feature a regular series,
Adopt-A-Pet, for those in search mode.
15288 And for the first time, there will be a
television opportunity for public health authorities, breeders, humane societies
and others to get necessary information to pet owners on general care, disease
control and other important aspects of the responsibility of owning an animal.
And we will have fiction too, movies and series where pets take the
15289 The Pet Network will be full interactive. The
service is about community. We will bundle tools and software so pet owners can
contribute photo and video files of their beloved animals. We will establish
15290 We will create connections with organizations
from humane societies to veterinarian organizations to pet product producers. We
will seek input from our audience to allow us to create new programming for
television or revise what we are already doing to better meet their needs
15291 The Pet Network, a package driver for
Category 1 that is affordable at 30 cents wholesale, attractive and necessary.
Just ask your dog!
15292 MS M. FUSCA: @work.ca. Work occupies
one-third or better of ourselves. We dream about it, worry about it. We love it.
We celebrate it. We hate it. It bores us. It's a tonic. We find refuge in it. We
learn from it. We grow with it.
15293 There is no endeavour outside of love that
creates so many different, sometimes conflicting, even dangerous or euphoric
emotions leading to the greatest variety of action. All levels of governments
across the country and around the world are concerned with work, with job
creation, with education, with skills training, as are tens of thousands of
organizations and corporations in Canada alone.
15294 Work affects all of us. Rich and poor, young
and old, women and men, the healthy, the sick and the
15295 It can change our health, our marriage, our
relationship with our children, our neighbours, our community, our country. Even
after we are finished with work, think about how much times we spend talking
15296 @work.ca is the first proposed Canadian
specialty channel that speaks to the values Canadians bring to their every day
experience of work. This channel will provide people with practical information
in order to find work, improve skills, succeed and advance.
15297 Through a carefully constructed interactive
strategy using television content, @work.ca will be a welcome guide to the
growing complexities of the labour market in Canada.
15298 For example, our Work Update series will
develop specialized applications for target sectors of the working world such as
youth, the home office, the family business, the trades, managerial and
professional occupations. We propose to marry this broadcast platform
programming with the Internet platform by potentially steering viewers to, for
example, job databases that would be relevant to their region, industry,
interest or age.
15299 Programming strands such as The Home Office,
Work Update and The Balancing Act will provide audiences with practical,
enlightened, educational and interactive viewing. @work.ca also engages,
explains and documents the diverse accomplishments of the fruits of our own
labour with our series Investors, Inventors and From Rags to Riches. We will
explore the little known world of work of our silent soldiers, volunteers, with
Charity Works and The Mission.
15300 We will celebrate Canadian achievers who have
been at the forefront of many areas of endeavour, be they our teachers, our
leaders, our entrepreneurs, our thinkers, our artists, our quiet achievers, our
15301 For the first time, we will take account of
and share with audiences the stories of immigrants in our series entitled
Newcomers, where we will explore how their work has helped shape our great
15302 Over 50 per cent of current and potential
digital subscribers would watch @work.ca. @work.ca will begin with 55 per cent
Canadian content in year one and will reach 70 per cent in year seven. We will
spend $30 million on Canadian content with nearly $8.5 million for independent
15303 Significantly, total expenditures on Canadian
content over the seven-year licence period are 75 per cent of total programming
expenditures. We have committed to spending a minimum of 38 per cent of each
previous year's gross revenues on quality Canadian programming. Our asking
price, a very affordable 35 cents.
15304 @work.ca, a high quality Canadian service
that has demonstrated appeal to Canadian viewers will be an affordable addition
to a new package of Canadian digital services, one that will help drive the
penetration of these new services.
15305 MR. GRAY: Madam Chair and Commissioners.
Stornoway Communications offers the advantages of a new player: flexibility,
enthusiasm, and a start-from-scratch nimbleness necessary in this new digital
15306 We would like to note and applaud the
Commission's desire to see new digital services explore and utilize
interactivity. All four of our channels will make use of the Internet to
communicate with our viewers through e-mail, discussion forums, streaming
videos, posting of transcripts, contact lists, research, and so
15307 But our plans go much further into true
interactivity, the most important aspect of which is content. Technology in new
media is rapidly evolving and changing, something with which we, as producers,
are very familiar. Just as we bring in the best people and the latest hardware
and software in our productions, our interactive programming will remain on the
15308 Ten years from now, we will barely remember a
time when television was not interactive, and we will look back on an era when
media spoke, and we merely listened.
15309 But how will we get there from
15310 Technology moves faster than our ability to
predict it. Certainly there will be new forms of hardware, and just as certain,
we will witness the genesis of new types of interactive
15311 We understand that it will not be good enough
to simply rework extinct programming ideas in order to survive. With the rise of
popularity of the Internet, viewers have come to expect choices, the choice to
go further and learn more, to ask questions and get answers, to connect
instantly with experts, neighbours and citizens from around the
15312 At Stornoway, we have already started
programming interactivity in creatively innovative ways. Here is an example.
--- Video Presentation / Présentation vidéo
15313 MR. GRAY: The cross-promotional value between
television and the Internet is clear. TV programming such as "Canada's
Brain Drain" can be expanded on to the net, as you have just seen. Likewise,
programming concepts can launch on the Internet to drive viewers to the
15314 We are committed, creatively, financially and
strategically, to integrating interactivity into all programming strands for all
four of our channels and will continue to forge alliances with all appropriate
partners in this ever-evolving world.
15315 We are already developing, for example, a
further phase of "Canadasbraindrain.ca" with our partner, the popular Canoe
15316 And so, until set-top interactivity becomes
sophisticated enough, we have chosen to launch our interactive media projects
first on the Internet where they will be, at least for now, available to a
greater number of people than through digital television. Then our programming
plans and concepts will move over into interactive digital TV as it rolls
15317 It is worth noting that in its first three
weeks, "Canadasbraindrain.ca" has logged 40,000 "unique visitors" -- that is not
hits, but visitors -- without the benefit of a broadcast
15318 Interactivity, though in its infancy, is an
integral aspect of each of our channels.
15319 MS M. FUSCA: Madam Chair and Commissioners,
this Commission's licensing and regulatory policies have fostered the
development of sustainable, high quality Canadian specialty services. The year
2000 gives us an opportunity to further this good work and to enter the new
millennium with fresh voices and strong new players. Category One licensing will
give added strength to new entrants seeking carriage.
15320 As we have demonstrated, our channels are not
simply recycled or spin off versions of existing services. They have been
constructed from the ground up, and our interactive plans and the channel
strategies have been developed and executed together, interwoven from day
15321 Issues Channel, The Dance Channel, The Pet
Network, and @work.ca, each one appeals to Canadians of all ages, from all
regions and from all walks of life.
15322 Each one with a built-in audience; each one
distinct from existing services; each one poised to entice viewers to the new
realm of digital television, while strengthening the broadcast system through
high levels of Canadian expenditures and independent production, all presented
at a reasonable cost and backed by solid research and financing.
15323 We submit that each of them meets, and indeed
exceeds, the criteria outlined in your Notice of Public Hearing and therefore
deserves a Category One licence.
15324 Stornoway Communications -- new voices, new
concepts, a new player in a new millennium.
15325 We are passionate; we are committed. We are
prepared, and we are geared up and ready to prove it. Merci.
15326 THE CHAIRPERSON: Thank you,
Ms Fusca and your team. You did very well.
15327 Thank you, Mr. Gray.
15328 Commissioner Williams,
15329 COMMISSIONER WILLIAMS: Good morning, Ms Fusca
and the Stornoway Communications Panel Members. It is my pleasure to work with
you this morning to help us gain a better understanding of your application
through questions and discussion.
15330 As is our practice, I will proceed through a
set of general and corporate questions on your applications. We will then take a
short break prior to proceeding through each of your four services in
15331 To begin, I would like to talk about
15332 The Commission has indicated certain
selection criteria that it will use to license Category One services:
specifically Canadian programming; exhibition levels; the amount of original
programming and Canadian programming expenditures; contribution to program
diversity; attractiveness or demand for the programming genre; and the use of
15333 What criteria do you think are most important
in licensing the Category One services?
15334 MS M. FUSCA: Thank you, Commissioner
15335 We all looked at the criteria together, and
we spent a lot of time thinking about it. We had little minor debates, but the
long and the short of it is that we really believe that the Commission had
provided us with a very holistic, very broad comprehensive list of criteria with
which to work. We approached the applications working with that
15336 Going through it, however, and coming from
the background that we do, we are attracted just naturally to content. In tandem
with content, and always in tandem with content, is the notion that it must be
attractive. Without attractive content, we really don't believe that you get
15337 Therefore, we measured attractive content
against the rest of the criteria and we determined, for example, such things as:
Could we use the attractive content that we had designed in an interactive way?
Would we be able to take advantage of the technologies and genuinely engage with
the audience? We said yes.
15338 Then we looked at reasonableness of the
business plan and whether it would be affordable to the customer and again
measured against attractive content, and our answer was yes, we can. We came up
with affordable prices and a very reasonable business plan.
15339 When we got to how much could we co-produce
with independent producers from across the country, and could we afford good
solid licence fees to deliver quality Canadian attractive programming, the
answer was yes.
15340 The one thing that I would like to add is
that in terms of diversity, not only were we looking at attractive content that
came from each region of the country and the territories, we would be using
multiple layers, you know the independent production sector organizations, to
make sure that it was indeed truly diverse.
15341 But when we got to diversity, we believed
very strongly -- and we would like to include it as part of the criteria -- that
one of the criteria is in fact to have new voices. As the world is shrinking
around us, we believe that this is very critical for any number of issues, the
most critical being diversity.
15342 I believe it was Chair Wylie, in her opening
remarks, that mentioned, and I was looking for it to quote from it, but, you
know, the notion of providing a healthy balance by providing choices. We are
obviously your answer to that, providing a healthy balance of choices to
15343 So, basically, that's the way that we
approached the criteria, with the addition of new voices to increase and
maintain and provide diversity.
15344 COMMISSIONER WILLIAMS: Okay. Maybe I can get
you to build on that a little bit.
15345 How important do you think diversity of
ownership is to the Canadian Broadcasting system?
15346 MS M. FUSCA: This isn't just self-serving. I
actually believe it's critical. I always have. You know, I don't want to pick on
the banks or anything, but, you know, I have always been a little miffed that we
don't have, you know, more diversity in banking in Canada. I would hate to see
that happen in our industry.
15347 It's great. I believe that it's important. I
think that when the Commission earlier on was quoted, probably last year, as
saying that we needed a strong industry, well, I couldn't agree
15348 Having said that, however, I also believe
that I think what Madam Wylie, Chair Wylie, was perhaps alluding to -- maybe I'm
just stretching it a little -- was the notion that, you know, we do need to make
sure that we have a balance there. We don't want to get all of our news and
entertainment from a couple of sources. I believe that personally. And I believe
Canadians feel the same way.
15349 THE CHAIRPERSON: Okay. Thank you,
15350 The implementation of service. Should the
Commission impose a minimum amount of time by which a Category 1 licensee must
implement its service? How about a Category 2 service; should the time frame be
the same as for a Category 1 service?
15351 MS M. FUSCA: Well, we have obviously had the
benefit of what has come before us. We are pretty agreed with most of the other
applicants, that I have heard anyway, that it is critical that Category 1
licences be launched at the same time.
15352 We are more than ready to launch September of
2001. We obviously believe that they have to go before -- Category 1s must be
launched before Category 2s.
15353 Did you want to add something to that,
15354 Did I answer your question in
15355 COMMISSIONER WILLIAMS: Yes, I think you did.
You said: September 1, 2001, much like the others; a natural launch was
important; and, Category 1 should be done before the Category
15356 MS M. FUSCA: Yes. Well, particularly if we
want to take, you know, the synergies of marketing strategies as a group. It
makes a lot of sense.
15357 COMMISSIONER WILLIAMS: Thank
15358 I will now move into the area of independent
15359 Given the challenges of the near term digital
environment, should the Commission be concerned about commitments to independent
15360 MS M. FUSCA: Well, we love that question, as
independent producers, of course.
15361 Absolutely, would be the quick answer. I
would like to expand on that a little.
15362 When designing our channels, you know, loving
the subject, I must admit, came first. Second to that was really our concern for
the independent production sector.
15363 We know that in the past launch has always
been a very difficult time for just about everybody, big and small, I might add,
new players and old. Therefore, the licence fees have often been very trying on
the independent production sector. That's why, when you take a look at our
applications, you will notice that we did our darndest and, in fact, are losing
money for a number of years, specifically because we wanted to make sure that
the licence fees were very solid and grow very steadily over the period of the
licence to the point in fact where when we sat back we could have produced more
hours in some instances, so that I could tell you that I was producing 4,000
instead of 3,000 hours.
15364 But we felt that two things were really
critical there: the quality that was going to go onto the screen; and, also the
livelihood of the independent production sector. So for that reason, we actually
increased licence fees.
15365 Again, I would like to say that on the dance
channel -- on the two channels we are taking an initiative to nurture -- along
with others, including the federal government -- the production of feature films
in Canada. We could not do it in the first few years of our licence, but in
years 6 and 7, we are very proud to say to you, and to the independent
production sector, that we have come up with licence fees equal to conventional
broadcasters in a forth window -- in other words, after pay -- equal to current
15366 So that's how we feel about the independent
15367 Did you want to add
15368 MR. GRAY: It's also a little bit of
self-interest in a positive way, too, because if we are to properly reflect this
country to itself, being based in Toronto we must work with independent
producers across the country if we really want to find out what people are
thinking and doing from coast to coast.
15369 So putting all of that together, the answer
to your question is yes.
15370 COMMISSIONER WILLIAMS: Thank you,
15371 Ms Fusca, how would you define "independent
producers" and how would you define "affiliated producers"?
15372 MS M. FUSCA: We thought about that as well,
because I had heard what I consider to be some rather disturbing definitions as
an independent producer.
15373 I think that an independent producer is truly
independent at, you know, 10 per cent. I think that it gets very dangerous when
you get beyond 30 per cent, particularly when you start going to the business
Acts and that sort of thing. I mean, I'm just somewhat concerned. I don't know
the particulars, so it's very difficult to gauge. I think it's very clear. I
think 10 to 15 per cent is enough.
15374 I can appreciate, I want to add however, that
because this is digital it's a different environment. There are larger groups
who may have the wherewithal to help smaller groups to the advantage of both
groups and the system. That makes sense. But I do think we have to be somewhat
cautious that we don't -- you have heard this before so this is nothing new,
right -- that the money goes out and actually it sort of comes back in, and we
have to be very concerned about who is really gaining the advantage, and also
who has editorial control.
15375 COMMISSIONER WILLIAMS: You have made specific
commitments in all of your applications indicating that no more than 10 per cent
of programming will come from Stornoway Productions. Is this 10 per cent
included or excluded in your overall in-house production
15376 MS M. FUSCA: That would be excluded from the
in-house production figures. However, I would like to say that it's less than 10
per cent from either Cogeco Radio-Television and/or Stornoway. So it's joint. In
other words, we wouldn't have 10 per cent from one and 10 per cent from another.
And we also would exclude it from our commitment to the independent production
15377 So it wouldn't be any money that is directly
arm's length. That's what we are proposing.
15378 COMMISSIONER WILLIAMS: Thank
15379 I'm going to now move into the area of
15380 In accordance with your description of your
proposed interactive elements and what we saw on the videos this morning, could
you tell us about your plans to introduce a set-top box with interactivity and
could you comment on what specific conditions you think will be necessary to be
in place in order to bring this about.
15381 MS M. FUSCA: I beg your pardon. Could you
please just repeat the last part of your question?
15382 COMMISSIONER WILLIAMS: Sure. I'm talking
about interactivity and I guess your future plans to introduce set-top box
15383 We are curious as to your comments on what
special conditions you feel would need to be in place in order to bring this
15384 MS M. FUSCA: Thank you.
15385 Our plans are actually very focused on a
specific type of programming. The strategies actually differ from channel to
channel, simply because they are so different, they are so unique and
15386 For example, you may have heard me mention,
when I was speaking about the dance channel, that we will have a
Webcast.Dancecast. It's geared at a younger, targeted at a younger group -- I
think it might just be easier if I described it to you, if you like, how that
would work -- whereby we would actually be televising/broadcasting the program,
but it would also be currently available on your computer; and you would get
different windows, if you will, on your computer where you could, you know, chat
with a friend or chat with other people that are actually watching it. You would
have the capability of, you know, focusing on shoes or a t-shirt, that kind of
15387 So it will have a multiple, very interactive
use to it, and it will be streamed at both levels.
15388 In terms of the set-top box, we believe that
we are developing programming that will actually drive the consumers to the
set-top box, specifically because when they hear what is out there they will
want to participate, and so it will grow.
15389 So we are very poised to make sure that our
programming and interactive strategies are there to push that
15390 COMMISSIONER WILLIAMS: Thank
15391 You have noted in your applications that you
have not submitted cost of revenues relating to interactivity as they will not
be regulated under the Broadcasting Act. However, could you please elaborate on
whether your plans for interactivity will impact on your business
15392 MS M. FUSCA: No. The plans for interactivity
are aside and apart from the business plans.
15393 COMMISSIONER WILLIAMS: Okay.
15394 Should distributors be obligated to carry the
interactive components of those services that are granted Category 1
15395 MS M. FUSCA: Well, I'm not in disagreement
with what you have basically heard before, so I'm not going to bore you with
15396 Having said that, there is some concern. I
mean, the idea that it will require greater bandwidth at some point and that we
may be getting into gatekeeping modes and self-interest, those are some
concerns, yes, they are.
15397 Having said that, I gather from conversations
that we have had that right now the mood is reasonably co-operative, in fact
quite co-operative, so I'm not hugely concerned. The concern is more potentially
technological later on.
15398 Do you want to add something,
15399 MR. GRAY: I think there is a bit of a line
that -- I think you have heard from other applicants last week, there is a
bit of a line.
15400 If the interactivity is integral to the
program itself, it seems to us that that is part of the program service. If it
becomes ancillary to that, then it occurs to us that there would probably have
to be some level of negotiation with the BDUs.
15401 COMMISSIONER WILLIAMS: Okay. Thank you,
15402 I'm going to now move into the area of
Canadian programming expenditure.
15403 Is a condition of license requiring minimum
levels of annual Canadian programming expenditures necessary for digital
15404 MS M. FUSCA: Yes.
15405 COMMISSIONER WILLIAMS: In a word.
15406 Several different approaches to calculating
Canadian programming expenditures have been proposed as alternatives to the
Commission's formula. Do you have any comments on any of the suggestions made
during this hearing?
15407 MR. GRAY: Again, as we have said a couple of
times, we witnessed last weeks' sessions and are aware of this
15408 In fact, with our applications we had
averaged over the term after year two. With our Issues application, in the
deficiency stage the Commission came back and asked us if we would be willing to
go to previous years' gross revenues in the instance of Issues -- we
weren't asked in the other four -- but we said sure.
15409 So when it comes right down to it, we are
prepared to go with either calculation as the Commission sees
15410 COMMISSIONER WILLIAMS: Well, using the CRTC
methodology, which is the Commission's formula, take the seven year total
Canadian programming expenditures and divide it by the total seven year
projected advertising and subscription revenues, would result in a slightly
lower percentage in three cases as compared to the method that you have just
described, particularly in the Issues, the Dance and Pet Networks, for work, the
percentages are the same.
15411 MR. GRAY: Yes.
15412 COMMISSIONER WILLIAMS: My question is: Would
you accept 38 per cent as a condition of license?
15413 MR. GRAY: Yes.
15414 COMMISSIONER WILLIAMS: Okay.
15415 I am now going to move into the area of
15416 In each of your applications you start at
year one with relatively high Canadian content, 55 per cent. Can you please
comment on your ability to meet this commitment? Specifically, is there
sufficient programming available in each genre to meet these levels in the early
years of the license term?
15417 MS M. FUSCA: Well, we are actually very
confident. We wouldn't have made that commitment -- because we take
commitments to Canadian content and to the independent production sector very
seriously. So in terms of what can we produce and did we cost it all out, and
all of that, to the nth degree.
15418 In terms of, you know, our discussions with
the independent production sector, I can only tell you that they were delighted
to be offered two or three times more than they are typically offered in a
15419 Last, but not least, we have a great team
with Victoria Fusca, my sister, and Inta Erwin, our Vice-President of
Acquisition and Distribution, where, you know, we checked what was available in
Canada either from independent production sources and also community channels,
i.e., TVO, we spoke to the National Film Board and then, of course, we went out
into the world, so to speak, and there is lots of good stuff.
15420 Now, of course, our ambition is always
15421 COMMISSIONER WILLIAMS: In each of your
applications your Canadian content levels are lower during the evening hours,
between 6:00 and midnight. Can you explain this difference?
15422 MS M. FUSCA: Yes. We were -- I guess you
could call it just a little producer insecurity. We simply did that because we
wanted to make sure that we had ample opportunity to get people accustomed to
the new series. This is quite apart and aside from flagships.
15423 While we are ready to launch, we are not
certain, depending on how negotiations go, whether we can commit to the
independent producers and whether they would be ready to deliver by that date.
So that is why you see a slightly lower percentage in prime time where we would
indeed and in fact build more Canadian content in those slots as time goes on,
as early perhaps as the second half of the year or, alteratively, year two. That
is pretty much why you find that that way.
15424 The other thing I might add is that we wanted
a little flexibility in terms of content as it rolled out to us.
15425 COMMISSIONER WILLIAMS: What is the repeat
factor in your programming schedules?
15426 MS M. FUSCA: That is a really interesting
question because it is a very big issue with us. It is a very big issue for two
reasons. One is that it is reasonably high. It depends on the channel, it
depends on the program, but the reason -- so it's between, say, 8:00 and
10:00. Some instances, foreign stuff that we may have a little more of in sort
of the wee hours of the morning.
15427 But the reason why it is so important is
really the design of the channels. If you take a very close look at the way that
@work.ca and the Issues Channel are designed, what you will discover is that the
flagships are actually on, you know, between 7:00 in, say, the work channel,
and, I think, 12:00 on the Issues Channel. That is because you are getting
little building blocks, the way that -- may I explain to you how it's
15428 So that if you get up in the morning and
there is a little bit of a story, let's take Canada's Brain Drain for an
example, the first issue might be: Well, what on earth are we talking about when
we are talking about Canada's Brain Drain? Well, that story is on at 8 o'clock
in the morning. We might actually repeat that story at 3 o'clock in the
afternoon and again at 8:00 because it makes sense. It is an integral part of
the way that the schedule is build and not a repeat in the traditional way that
we understand repeats.
15429 Bill, did you want to add something on
repeats as well?
15430 MR. GRAY: Yes.
15431 First of all, we don't think repeats are bad.
I know you have heard that from others and we feel very strongly that with the
explosion of the number of channels available few people are sitting watching
one channel all day long, so we are providing alternative viewing possibilities.
We don't for a second think that somebody watching our Issues update program at
6 o'clock in the morning is going to be watching it seven times that day. So we
want to keep people informed.
15432 At the same time, in those flagship programs,
as Martha described, as they are repeated through the day they are updated and
altered with server technology, which is very simple to do. We are calling that
one original program, but in fact they are sort of semi-original, semi-repeat.
Again, we see nothing wrong with repeat programming.
15433 We also intend not to just simply run repeat
cycles where we have a 26-half hour episode series and simply run the 26 weeks
back-to-back to back-to-back. Depending on the channel, but on Issues Channel
for example, we will select from a series that we would buy that has 26 or 52
episodes and program those episodes that we already have in the can in order to
tie into the themes that we are doing throughout the week.
15434 So our repeats aren't just -- we are not
just rolling it, we are actually programming the repeats in selected
15435 MS M. FUSCA: If I might just add to that,
because I was fumbling a little earlier, is we also plan theme months for Issues
and @work, and also we have decided that we would like the audience to
participate in telling us, you know, what they felt was worth repeating or what
we discovered was the best of from the various chatrooms that we will have. So
part of the repeat is actually determined directly by the
15436 COMMISSIONER WILLIAMS: Thank you,
15437 I would like to talk a bit now about
15438 Could you please describe how you determined
your penetration rates and how they relate to your market research for each of
your four proposals?
15439 MS M. FUSCA: I would do that for you, but
Dr. Wall is so much more articulate in this area than I am so I think I
will ask him to talk to you about this.
15440 COMMISSIONER WILLIAMS: Okay. Thanks.
--- Pause / Pause
15441 DR. WALL: The red light is on, I guess we are
rolling. Thanks, Martha.
15442 I guess the starting point for making the
penetration forecasts has to start with an understanding of what is going to
happen with digital subscribers and, of course, we, like all other applicants,
started with the information filed by the cable operators, CCTA, and the
15443 So our own approach was to use a midpoint
between the pessimistic and the optimistic for the cable operators, to take the
satellite operators forecasts -- and not that we didn't trust their
forecasts, but to be conservative about it -- we took a discount on that,
if you will, we lowered their estimate by a considerable amount, by about
40 per cent starting in year one, to give us a reasonable starting
15444 We also included MDS based on published
statements and conversations with them. So that gave us a digital universe, if
15445 Moving from that to a market research, we
approached it in a number of ways. You have seen from other applicants what I
would call a conventional approach to doing market research where you go out and
you describe a concept and you let the respondent know that this may be on a
television channel. You ask for an expression of interest.
15446 That can occur in a number of ways. You can
simply grade it "very interested" to "somewhat interested", "less interested"
and "not interested at all", or you can use a point scale, which some of the
applicant's research has done.
15447 Our own approach was to take it a step
further, if you will, and to separate out those subscribers who are currently
digital subscribers or who are planning to become digital subscribers within the
next two years. Using that as a foundation universe, because those are really
the folks that are going to make the decisions on purchasing, those are the ones
that we focused on and developed our expressions of interest, if you will, "Are
they interested in our particular channels".
15448 Moving from that, we then went and got
specific with price. Again relative to most of the research that has been filed,
there have been relatively few that have actually got into the price question.
As you know, if you are expecting people to spend money, they want to know what
it's going to cost them. We don't think it's sufficient to simply ask "Are you
interested in the service?" and not let the respondent know that they will have
to pay for it and, going beyond that, that they will have to pay something very
15449 What we did was we categorized two different
kinds of package, plus a stand alone package, and asked respondents their
willingness to purchase at price points. We had three different price points for
each of those packages and for a stand alone.
15450 Coming out of that market research we had a
pretty good sense of what the Canadian public, in particular what digital
subscribers or those who plan to become digital, would purchase, at what price.
Based on that, we derived our penetration rates. Normally, although our market
research gave us a higher level, we started at a somewhat lower level for
15451 We also cross-checked our penetration levels
against things like what's happened historically with other launches of tiers,
what can we expect. We also have to remember that we are going to be packaging
some of these services with other channels, so there will be a lift, if you
will, in the complementary or from the difference in channels across
15452 Just in conclusion we, you know, started
top-up -- excuse me, bottom-up and ran it all the way through to
establish our penetration rates.
15453 COMMISSIONER WILLIAMS: Thank you, Dr. Wall. I
would like to go back to Canadian programming expenditure for a moment or two. I
missed a couple of questions there and I would like to cover
15454 This is regarding your calculation of
Canadian programming expenditures and the two different formulae. You said for
work, CAU would accept 38 per cent as a condition of licence. For the Issues
Channel, your calculation of 42, or the Commission's figure of 37. This would be
a question. Would you accept 37 per cent?
15455 MS M. FUSCA: Yes, we would.
15456 COMMISSIONER WILLIAMS: For the Dance Channel,
is it your calculation of 35 or the Commission's figure of 32? Would you accept
15457 MS M. FUSCA: Absolutely.
15458 COMMISSIONER WILLIAMS: And for the Pet
Network, your calculation of 35 per cent or the Commission's figure of 32 per
15459 MS M. FUSCA: Absolutely.
15460 COMMISSIONER WILLIAMS: Thirty-two. Okay.
Earlier in the hearing Astral raised the issue of the difficulty in concluding
negotiations with distributors. I noted your opening remarks where you had
signed a master agreement with the Canadian Cable Systems Alliance and that it
was at the rates as presented in your application. Certainly with that group you
haven't had any difficulty.
15461 Have you approached other broadcasting
15462 MS M. FUSCA: No.
15463 COMMISSIONER WILLIAMS: Okay. Do you think
that the CRTC should order that negotiations must be completed six months prior
to the launch?
15464 MS M. FUSCA: We believe it's a good
15465 COMMISSIONER WILLIAMS: Okay. Should we
conclude that larger BDUs like a shareholder, Cogeco, would accept your
wholesale rates without much, if any, negotiations based on your experiences
with the Canadian Cable Systems Alliance?
15466 MS M. FUSCA: We would certainly like to think
so, but we haven't had that conversation.
15467 COMMISSIONER WILLIAMS: Okay. All right. The
main point that I wanted to bring out of that was if the six months prior to
launch idea was a good one. You seem to support that.
15468 MR. GRAY: Mr. Commissioner, I think it's very
important that we as a community establish through the Commission some kind of
deadline. We all witnessed what happened last time in terms of the negotiation
process. It made it very difficult for a number of channels that launched. It
really wasn't very good for anyone. We would very much encourage that kind of
15469 COMMISSIONER WILLIAMS: Do you envision
different rates for different sized BDUs?
15470 MR. GRAY: We propose our market rates, our
wholesale rates rather, as market rates. We have established our business plans,
as you have seen, based upon them. We have estimated to the best of our ability
what the penetration in digital will be.
15471 We think those are very fair numbers and in
our case we think they are very affordable from, again, the research that we
have done. Indeed, we believe that our CCSA agreement in fact establishes a
market rate for our four channels. Those are numbers that we would expect from
other BDUs and, indeed, if the Commission were to consider enforcing wholesale
rates, we would be quite comfortable with those numbers.
15472 COMMISSIONER WILLIAMS: If a BDU has a
significant digital penetration as opposed to CCSA which it may be developing,
but say it was CCSa and ExpressVu, for example, a dominant digital player, would
you think that they would be obtaining the wholesale rate?
15473 MR. GRAY: We fully expect it's going to be a
difficult negotiating time. As I said a moment ago, we would happily accept
legislated amounts from the Commission. I don't know if you are considering that
or not -- rates, I should say.
15474 I'm not trying to dodge your question, but we
feel that we want to remain quite firm with our published rates.
15475 COMMISSIONER WILLIAMS: I'm not sure how the
rest of the panel or Commission members feel about negotiating -- I
mean mandating certain wholesale rates, but my own view is we are into an age of
negotiation and we are into an age of market demand, let the invisible hand, I
guess, work out where your level should be.
15476 MR. GRAY: I think we are in general agreement
with that, but I did bring up the idea of mandated amounts simply because of
recalling the history of the negotiation last time, but perhaps the answer is
what you were suggesting, which is some kind of deadline for negotiation and
some kind of arbitration process so that we can be assured that the new
applicants or the new tier aren't trying to figure out whether they are launched
or not two months before the package goes out.
15477 COMMISSIONER WILLIAMS: Thank you. Madam
Chair, it's still early. I propose rather than the break that we
15478 THE CHAIRPERSON: We are not
15479 Madam Bertrand.
15480 CHAIRPERSON OF THE COMMISSION: Good morning.
I was listening to you and maybe with the rest of the week, it kind of brought
of a question that I will address to you, but probably address to
15481 We have been talking a lot about the
attractiveness of a service that is the most important element and many other
applicants have expressed the same priority. It just occurred to me, should we
look at attractiveness in the same way as we have looked at it in the analog
world? Isn't the fact that even if it will roll out slowly in terms of the full
potential of interactivity, how should we -- is there a different way
to look at attractiveness and appealing service in this world in comparison to
where you were a more passive type of viewer?
15482 I was watching on the screen your activity of
the brain drain. I was wondering how much of that kind of alphanumeric type of
information should be on the screen.
15483 How much will that be -- comment dire
donc --bringing new viewers that wouldn't have watched in the past and at
the same time, how much would more traditional type of viewers be kind of upset,
you know, not really go for it at first.
15484 So I would like to know of your views, if
it's a genuine concern or should I just put it back on my weekend and say I was
too tired or is it something we should be concerned about?
15485 MS M. FUSCA: It is interesting. In your
question I felt that there were a couple of bundled issues in there and I think
my favourite part was probably something that I, as a producer and person who is
sitting right before you, I am a little concerned with myself, which is to say
that I like a nice clean screen. I don't want to see 16 boxes, and so on and so
forth, right? Having said that, I have four children who love it. I mean just
love it. They are just whizzing away and they are changing the English language
as well, I don't know if you have notice.
15486 Like they never spelled the word "for", it's
like 4, and "you" is U. So there is going to be a whole revolution in
15487 So having kept that in mind as well when we
were thinking about these channels, I think that we really have to make sure
that with each sectors of our market that we are very careful about how it is
that we are speaking with them, interacting with them, so that the programming
will have a lot to do with the time of day, the type of program, the type of
audience that you are dealing with. I mean, that's my approach. We have
discussed this, that is my own personal approach, and I think it makes sense.
You really don't want to alienate. If you note, for example, on the Issues
Channel that you have a very hot subject that is going to appeal to women
between 45 and 65, let's say. You know having a lot of split-screen stuff and
pointing them to the Web for the moment, the Internet for the moment, and/or
trying to get them all wound up as digital rolls out in a couple of years is
probably not a good idea. So that is one issue.
15488 In terms of attractiveness. You know,
attractiveness is a very interesting word and there are various and sundry ways
of trying to determine what is attractive.
15489 Typically, the people that are good in our
business, anybody will tell you honestly, it's a gut thing, it comes from the
gut. Having said that, Dr. Wall with Decima and you know, his own capability, I
think he is well-known to the Commission, really did a phenomenal job for us and
with us, determining in a very real way what the attractiveness in terms of
15490 So you work with your gut, you work with the
market research, but then we went far and wide into the community to speak with
people like Terry-Anne Boyles and Sheldon Ehrenworth and the Senators even just
to see how they felt having had a long history in community work, and so on and
15491 So there was all of that, and those are the
ways and means that we decided on what was attractive. At the end of the day,
personally again, it's really content that we are talking about, is the content
attractive? And then we have to make sure that when we marry it to the new
set-top boxes that we are all so eagerly anticipating, that it really makes
sense to your audiences.
15492 Nancy, did you want to add
15493 MS SMITH: I would just add that in our work
that we are doing with new media, we are finding, you know, you have the early
adaptors, but then we are finding that mass audiences are now really responding
to new media in a way that we never would have imagined. Women are on in huge
numbers now. So I think that part of the answer here is to evolve as your
audience does so that in fact you are taking them with you, and at the point
that you have a screen that looks different, they are actually ready for it and
they want it, and I think that is part of what we have to do, we have to roll
out with our audience.
15494 CHAIRPERSON OF THE COMMISSION: Well, my
question is: If we were like five or six years ago and you would come forward
with those themes, what would be the difference in terms of saying those are
attractive themes for the analog world and we are sure of it. Wouldn't we have
the same kind of, you know, choice as you are presenting here? What makes the
difference of appeal going into digital? Are the themes different or are we
having the same themes and what will be strictly different will be the fact
that, yes indeed, it will be the interactivity first with the Internet and
eventually directly with the TV screen?
15495 MS M. FUSCA: If I have understood you
correctly, I think you are asking a very interesting question which
15496 CHAIRPERSON OF THE COMMISSION:
--- Laughter / Rires
15497 MS M. FUSCA: You are welcome. It's
interesting because I am indirectly flattered, perhaps, and probably naively so,
I might add, but no, the notion of analog versus digital -- and I am
probably way out there not understanding. But the interesting thing is that when
you take a look at the four channels that we have proposed to you, they have
very broad appeal beyond, I believe, what would typically be called niche and/or
specialty spin-off stuff, work. You know, we have market research that shows 50
per cent, but I will bet you anything that it will be a far greater number of
people, and it will be dependent on attractiveness of content, appeal, marrying
the educational with the what I call intrinsic education entertainment
15498 Even dance. You know, when you are doing your
research and you say to people "Would you subscribe to a dance channel",
immediately there is a certain ballet stage thing that happens. You are not able
to really wow them with the dynamic variety and diversity of what you are going
to have on the channel.
15499 When it's on, I am convinced that, in fact,
it will have a far larger viewing public that the 40 per cent. So if you are
talking -- and please forgive me if I am totally out in left field
here -- if you are talking about attractiveness and the notion of these
channels and whether they are actually bigger perhaps than what we have
typically seen with some other applications, I would say, yes.
15500 You know, the interesting thing about
producers is that they really want as many people to see their stuff as
possible. So that is what we are always after, and I guess we did the same thing
with these applications.
15501 MR. GRAY: Madame Bertrand, I think --
and this is not market research, it's personal anecdote and gut feeling, but it
seems to me that people who are not involved in our industry don't have a clue
about what all this digital business is other than there are going to be more
channels and they have to pay extra for them and they have to have a box for
15502 But I think the capabilities of the box and
all this stuff that we talk about is probably not, at least initially, why
people are going to buy say a digital tier. They are going to buy it because
they see a group of channels that they want, and they have marketed those
channels and they want to buy them, and there is an added bonus if there is some
kind of interactivity coming or whatever.
15503 But first and foremost, it's kind of the
mentality of saying, "I want to get those channels. Oh, I have to get a box for
that" and somebody convinces them that oh well, it's worth it. Anyway,
apparently you get a better picture. I think that is where it will start, and I
think then down the line things will start to change as the set-top box becomes
truly interactive in any kind of mass way that is workable. Then we will see
that sort of value-added part to having channels that are in that realm and not
the other. But then we will get into analog cross-over and all of that down the
15504 I guess what I am saying is the content of
the channels themselves on this first digital tier, TV content, is still the
first and most important element.
15505 MS M. FUSCA: Julia Walden would like to add
15506 MS WALDEN: You were mentioning alphanumeric
and that is how you read Canada's Brain Drain content. To simplify it, imagine
an exciting issue going by on the Issues Channel and alphanumeric could be live
poling. I think that is very acceptable to audiences now, as Nancy says. We
would be positioning ourselves with their acceptance.
15507 On the other end of the scale, on Ken's brain
drain, we set out to target the office professional and youth job market and we
were very successful in reaching that group. Ironically, it's precisely the
group for whom the brain drain issue has a potentially significant impact on
their lives and they are younger. Two out of every three are below 35, males
outnumber females 5 to 1, 71 per cent are university educated, 55 per cent earn
more than $50,000 a year. So you can see that even in advance of the
roll-out of digital television, we are building a relationship with a potential
audience through the Internet and that is very important.
15508 CHAIRPERSON OF THE COMMISSION: Thank you very
much. Thank you.
15509 THE CHAIRPERSON: You were following the
hearing so you must have heard about, if you hadn't already, about the uproar in
Alberta the Log Channel was removed, a picture with burning
15510 I often wondered just how that would have
fared on Mr. Wall's survey beforehand -- unless there are a lot of grandmothers
15511 All that is to say that perhaps
attractiveness should be diversity. Is there something there that we didn't have
before, since even burning logs seemed to have appeared attractive to some
viewers? And then of course there is Canadian content. It is a very difficult
thing to test, no doubt, because no one would have thought of asking anyone:
Would you find burning logs appealing?
15512 It is difficult to pitch something that you
don't have already, and lo and behold you find it interesting.
15513 I say that, of course, after reading all
these clever surveys telling us what is most attractive and most appealing. You
will have an opportunity, of course, to discuss with Commissioner Williams later
this whole aspect of diversity, which I think is linked to attractiveness. What
is there may be popular as an addition.
15514 I would like to go back to the independent
producer issue. You will again have the opportunity, when Commissioner Williams
discusses your specific applications, to address it.
15515 In the two applications where you commit to
not having more than 10 per cent produced by Stornoway, there is no mention of
Cogeco or of Carrefour. In one -- I think The Pet Channel -- there is only a
mention of Stornoway in the application and it is only for the first year. So
hopefully you will clarify that.
15516 Would it be your view that what you feel
strongly about the 10 per cent rule would capture your partner -- I think you
said that, although I am not sure it is in the applications -- and the company
owned by Cogeco?
15517 Do you think it is important that this
definition of an independent producer be the same in every application? You have
heard different definitions of what is an independent producer in the commitment
made by other applicants.
15518 MS M. FUSCA: I am going to ask Bill to
respond to this as well.
15519 For starters, just to get back to the Cogeco,
Carrefour and Stornoway, as I did mention earlier, we are very committed to
providing less than 10 per cent each, together. In other words, the total that
we would acquire, whether it already produced material or original material,
would equal less than 10 per cent from both of these companies and/or any
other affiliated company.
15520 In terms of -- I have lost my train of
15521 Also, I wanted to specify that this money
would not come from the money allocated for independent producers. It would
actually come from in-house production.
15522 In terms of my own personal view about
independent producers, I think we have to make sure that we are very careful. I
think we can have some flexibility in terms of 10 per cent or 15 per cent. I
just believe that getting to 30 per cent to 35 per cent is far more than I
believe is required or is necessary.
15523 Why would anybody have to have that? You
worry about the independence of the producer, and you also, frankly, worry about
where the money is going.
15524 Stornoway Productions, by the way, is on
record at the last round as having supported applications and being very
concerned about the money going out and coming back, sort of leaving one hand
and flowing directly to the other. If they wanted our support, I felt that it
should at least come to us, a good chunk of it.
15525 So that is really where I
15527 MR. GRAY: I have been an executive at
Téléfilm, a broadcaster and an independent producer. So I have seen and thought
about this particular concern from all of those perspectives, and I think I
understand it. And each of them has a different perspective.
15528 I think we have to take a kind of overview in
terms of the industry. If we are to encourage independent production by having
independent producers, maybe not controlled by but certainly there is a large
enough economic interest by a broadcaster that it benefits the broadcaster to
focus its independent production commissioning on that producer.
15529 It is going to limit all the various
diversities of different numbers of producers who can produce for those
particular channels, as well as again the diversity of voice that will get
15530 THE CHAIRPERSON: You would want this
limitation on yourself and on everyone else as well.
15531 MR. GRAY: Yes.
15532 THE CHAIRPERSON: You are a production company
effectively, are you not?
15533 MR. GRAY: Yes.
15534 THE CHAIRPERSON: So if by any chance you were
so unlucky as not to have any licence, it would be important to you to make sure
that some production comes to you as well.
15535 MR. GRAY: And if we are fortunate to have
licences, we are quite happy to deal with a broad spectrum of independent
producers. And if we became a very successful broadcaster and purchased a large
chunk of another producer, then we would be limited in our self-dealing with
15536 THE CHAIRPERSON: As the world evolves, we see
a lot of connection now in licensees between producers. What is virtue today may
be sin tomorrow.
15537 So there should be a very low threshold, and
it should be applicable to everyone.
15538 MR. GRAY: Even with our long-term view,
15539 THE CHAIRPERSON: With the Canadian
programming expenditures limit, usually when we ask a question we get very long
answers. All we heard you say was yes, there should be such a
15540 Would you expand on why you are so sure that
it is a yes.
15541 We have not heard, for example, any comment
about whether the same thing should be applicable to everyone. Should it be
based on the numbers that are put forward? Do you see, like so many others, a
difficulty if there is not some flexibility brought in? And if so, how should it
be brought in?
15542 You have been following what other parties
have said to date?
15543 MS M. FUSCA: I am sorry, I wonder if you
could reiterate the beginning of the question, just so that I am
15544 THE CHAIRPERSON: You were asked by
Commissioner Williams whether you felt that it was necessary to have Canadian
programming expenditure requirements demanded of every applicant, and you just
said yes. Usually, we get a long answer.
15545 So that we don't feel deprived, we would like
to hear you on the usual questions which are: Should the mechanism be applicable
across the board to everyone, and why or why not? And do you share the concern
of many applicants that it is too rigid a formula and requires flexibility in
riskier digital environment?
15546 MS M. FUSCA: I would definitely agree in
terms of flexibility. I think it is very important to be as flexible as we all
15547 Having said that, I believe it is really
critical. After 20 years in this business, I hate to say it, but if we didn't
have those rules in place, you would see a lot less Canadian content. It is just
too tempting, too easy, too profitable to go elsewhere. And that is the rather
sad reality of life.
15548 I know that there are going to be a lot of
people who want to kill me over this, but I have been --
15549 THE CHAIRPERSON: Well, the party to please is
the regulator, of course.
--- Laughter / Rires
15550 MS M. FUSCA: Interestingly enough, I could
not say otherwise.
15551 Just on the previous issue, we have been on
record earlier, when we were not applying for licences, saying that we need
this; we really do.
15552 THE CHAIRPERSON: Of course, that was your
livelihood at the time.
15553 You mean you applied
15554 MS M. FUSCA: Yes, this is
15555 The other issue about the minimums, I firmly,
firmly believe -- and I have thought about this actually long and hard,
especially these days -- that we need minimums. We can be flexible if we find --
I think the Commission in the past has shown extreme flexibility, seriously,
when people have come before you and have been having a difficult time and have
required changes, and that sort of thing, which have made sense, which were in
the public interest. It happened.
15556 I think that flexibility is always a good
thing, but I think minimums are critical.
15557 THE CHAIRPERSON: Would it be better to build
in flexibility in the formula rather than have those awful hearings where people
want to reduce their commitment?
15558 MS M. FUSCA: I guess it is really up to you,
isn't it. Do you want to hear them or not?
15559 THE CHAIRPERSON: It seems to us, of course,
the points have been made, that it's more equitable, if there is a need for
flexibility, to build it into a formula so that it's applied across the board
and then the requirement is expected to be met throughout the licence term. I
don't see how else we can choose what will be, in any event, a few applicants
out of the number we have before us.
15560 MS M. FUSCA: It makes a lot of
15561 THE CHAIRPERSON: Yes.
15562 I hope you have been keeping track of the
take-home exam, as well.
15563 MS M. FUSCA: Actually, what I have been dying
of curiosity is, you know, how many grandchildren.
15564 THE CHAIRPERSON: Isn't that lovely. She is
really catching on now talking about grandchildren.
--- Laughter / Rires
15565 THE CHAIRPERSON: I have four grandchildren. I
have very clever children who had twins, a boy and a girl, then the rest was
just "par surplus". They are, of course, very clever, all of the four.
--- Laughter / Rires
--- Off microphone / Sans microphone
15566 THE CHAIRPERSON: Thank you.
15568 MR. McCALLUM: Just on the question of
affiliate, I believe you were asked for a definition of "affiliated company" in
relation to independent production, and I don't think you supplied a definition
of "affiliate", although I think your answer did strongly suggest that both
Stornoway and Les Productions Carrefour would be affiliates.
15569 Do you have a proposed definition of what is
meant by "affiliate"?
15570 MR. GRAY: We would suggest 10 per cent
economic interest as apart from simply trying to determine equity or
15571 MR. McCALLUM: Ten per cent economic interest.
So that is the same threshold for both independent producer and affiliate?
That's what you are proposing?
15572 MR. GRAY: Yes.
15573 MR. McCALLUM: And that would be for the
purposes of designing a condition of licence? Those would be the sort of
definitions to incorporate into such a definition?
15574 MR. GRAY: Yes.
15575 MR. McCALLUM: Thank you.
15576 MS M. FUSCA: Actually, since Bill and I have
had a chance to discuss this ever so briefly, I would like to also ask Mr.
15578 MR. CARTER: Thank you,
15579 Following your question, counsel, and that of
Chair Wylie earlier, we agree with what obviously Martha and Bill have just
said. We would just like to point out one element that sometimes is not well
15580 Productions Carrefour, obviously, would be an
affiliate of any of those four channels; no question about that. Now, if
Production Carrefour were to produce something, was to produce something for,
say, Canal Vie or Canal D, I think it should be clear that in that particular
instance it is an independent producer because there is no economic relationship
between Cogeco or Cogeco Radio-Television or Carrefour and Canal D. It's not
because Carrefour is owned by a broadcaster that automatically it is not an
15581 MR. McCALLUM: In that case, then, I take it
you would want to have the possibility of a first window opportunity in such a
situation as opposed to something produced by Stornoway, where you have
suggested that a second window opportunity would be applicable. Is that
15582 MR. CARTER: Well, I'm talking about any
productions that could be done by Carrefour for a completely separate third
party, not for any of those channels. But sometimes within the broadcasting and
the independent production community, this is a little bit confused. I strongly
believe that if Carrefour is to produce for Global or for Astro, it is totally
15583 MR. McCALLUM: Thank you.
15584 Some other parties, by the way, have
suggested, in terms of the definition of "affiliate", that there would be no
equity interest owned by either of the shareholders in such an affiliate. You
are proposing something a little different because you are suggesting a 10 per
cent equity level. If the Commission felt that the definition, that it be at
zero level, were appropriate for that definition, how would you react to
15585 MS M. FUSCA: The reason why I just wanted to
be a little cautious, and again a little flexible, and I wouldn't have even
limited to 10 per cent, I could live with 15 per cent, is simply that in the new
digital environment it may be necessary in fact, for the companies that can
afford it, to nurture and help develop independent producers who would in fact,
I believe, still be very independent but would provide them with a source of
15586 MR. McCALLUM: Thank you.
15587 There are a few, I guess, standard questions
that were asked to the other applicants -- I will just take two seconds, if I
may -- regarding filler programming.
15588 I take it you would distribute those amongst
the other categories.
15589 MS M. FUSCA: We are in
15590 MR. McCALLUM: And regarding the Personal
Information Protection and Electronic Document Act, I assume you have intention
to comply with that.
15591 MS M. FUSCA: Absolutely.
15592 MR. McCALLUM: And with respect to descriptive
video, will you be technically capable of doing that?
15593 MS M. FUSCA: Yes, we will.
15594 MR. McCALLUM: Thank you.
15595 Thank you, Madam Chair.
15596 THE CHAIRPERSON: Mr. Carter, I take it that
the definition, as you see it, would capture programming produced for you by
another broadcaster for first window but, let's say, in your system for second
window it would remain captured by the definition and fall within the
15597 MR. CARTER: If that broadcaster has no
economic interest in any of the channels, I guess it should.
15598 THE CHAIRPERSON: No. I'm talking about
suppose Carrefour or Stornoway produces a program for Global and somehow or
other it's on Global as a first window and then it's on one of your
applications, on a second window it would be captured just as if it had been the
15599 MR. CARTER: Yes.
15600 THE CHAIRPERSON: I had another question which
I have forgotten. Let me think about it while I have an extra cup of
15601 It's not that I have another grandchild. I
did that right.
--- Laughter / Rires
15602 THE CHAIRPERSON: We will take a 15-minute
break and reprendrons dans 15 minutes.
--- Upon recessing at 1020 / Suspension à 1020
--- Upon resuming at 1040 / Reprise à 1040
15603 THE CHAIRPERSON: Welcome back.
15604 There seems to be some confusion in some of
our minds about the answer to our question about second window and first
15605 MR. CARTER: There is no question that if
there would be a second window in any of our channels it would count within the
10 per cent we have mentioned before.
15606 THE CHAIRPERSON: As would be caught by the
definition of --
15607 MR. CARTER: Yes.
15608 THE CHAIRPERSON: -- a production made by an
15609 MR. CARTER: Yes, no question.
15610 THE CHAIRPERSON: I have remembered now what I
was going to ask.
15611 Ms Fusca, if we took your advice and limit it
to 10 or 15 per cent, a production company that would be considered related or
not independent, would you have a problem if we retained then the advice of
other applicants who feel that 30 per cent or 34 per cent, barring the factor
control, is good enough?
15612 MS M. FUSCA: My colleagues reminded me that
we were even willing to live with zero per cent. But in terms of your question,
I can only say that you have made excellent decisions in the past; I trust that
you will make an excellent decision now.
15613 I noticed -- and I don't mean this
facetiously at all, by the way, not at all -- I noticed that when the issue
became one of, you know, increasing beyond the 30 per cent, there were some very
tough questions that were asked here in that room that day, very legitimate. So,
again, we can really only reiterate that our position is to be wary, to be
careful, and make sure that independent producers are truly independent. That's
15614 THE CHAIRPERSON: You are leading to our
judgment, whether it would be acceptable to have an asynchronous requirement,
that somebody may have 30 per cent but you are willing to live with
15615 MR. GRAY: No. I think maybe we weren't clear
15616 It's our view, in general, in the industry,
that above 10 or 15 per cent should constitute self-dealing because, as we
mentioned earlier, our concern is an industry-wide concern. It has to do with
shelf space and the accessibility of it by independent producers, as well as the
fact that if licence fees go to affiliated companies that have a significant
economic interest in a production company, then, in effect, the amount of
licence fees in the system is reduced.
15617 THE CHAIRPERSON: Commissioner Demers has a
question, but I want to remind the audience that grandmothers hate cell phones
and pagers in the hearing room.
15618 Commissioner Demers.
15619 COMMISSIONER DEMERS: Thank you,
15620 Just one question on the master agreement, as
you call it, with the Canadian Cable Systems Alliance. My question is whether
that agreement provides for your channels to be carried on
15621 MR. GRAY: The agreement provides carriage
anticipating the digital environment. However, as you know, some of the small
systems are unlikely to go digital any time soon, and with the exemptions they
are allowed the potential for analog is there. But, in principle, it's a digital
15622 COMMISSIONER DEMERS: So there is a
possibility that some of them will do -- should you be licensed, some of these
would offer your service on analog?
15623 MR. GRAY: The potential is there, but again,
with the smaller Class-3 companies.
15624 COMMISSIONER DEMERS: Thank
15625 THE CHAIRPERSON: Commissioner
15626 COMMISSIONER WILLIAMS: Thank you, Chair
15627 Before the break Chair Wylie described the
burning log channel as an Alberta service. In fact it was a British Columbia
channel, very popular in parts of Vancouver Island, particularly with the senior
community and those cold, damp winter days sometimes experienced on the west
coast. Perhaps an Alberta channel of a similar nature featuring the burning
flare of a new natural gas discovery well --
--- Laughter / Rires
15628 COMMISSIONER WILLIAMS: -- would provide
similar comfort and attract as many Albertans as did the log channel to the
logging industry base of British Columbia.
15629 I propose now to explore your four services
in the following order: @work.ca, the Issues Channel, The Dance Channel and The
Pet Network, sometimes referred to as the poodle network in various
media -- the poodle network in various media.
15630 So beginning with @work.ca, we will start in
15631 Could you describe how you will determine
when a sitcom or drama series is appropriate to the programming genre defined
within this application?
15632 MS M. FUSCA: Interestingly, we actually
haven't looked at series very closely, to be honest with you, but we have looked
at work films. Of course, they would have to be dealing with one of the issues
that would be important to work, any number of which could include, you know,
The Balancing Act, for example, which is a title of one of our series, you know,
what are the pressures of work and how do they relate to the structure and
make-up of the family, whether we are talking the nuclear or the extended
15633 That is an example of one. Would you like me
to give you some more?
15634 COMMISSIONER WILLIAMS: Yes,
15635 MS M. FUSCA: Okay.
15636 The other thing that I have found, again with
a younger audience, is that oftentimes -- and as we have heard from very
good groups that are within, for example, like the Collegium for Work and
Learning, is that at the end of the day after kids have spent all day in school
they are really not interested in going to a television set and being "educated"
again. This is where we get into what I call intrinsic
15637 So therefore there are any number of films,
for example, that are clearly about what someone is doing for a living and this
is a very good way of relating to a younger person in a more entertainment
fashion what it is like to be in that field.
15638 For example, we all know that film producers,
or even models, it seems like, you know, a very glorious and glamorous and
nothing can go wrong kind of world, and when you get behind the scenes it is,
more often than not, a very different situation.
15639 So those are some of the ways that we believe
we can contribute with films.
15640 COMMISSIONER WILLIAMS: In your proposed
Schedule 10 you list programs under Category 5(a), which is formal
education and preschool, but you have not selected this category under your
proposed nature of service. Do you wish to do so now?
15641 MS M. FUSCA: Yes. I'm sorry we didn't do it
15642 COMMISSIONER WILLIAMS: We will check that box
for you. Thanks.
15643 I now move into the area of
15644 You talk about -- I guess the majority
of respondents to your survey are classified as "somewhat" to "very interested"
or the "somewhat interested" category.
15645 I guess the few concerns we have are: This
low level of "very interested" respondents may mean your penetration rates are a
little optimistic. Would you care to comment on that?
15646 MS M. FUSCA: We, of course, were very careful
to make sure that we didn't do that, but I will ask Dr. Wall to
15647 DR. WALL: Thanks, Martha.
15648 Yes, Commissioner Williams. If you
were -- I agree with you.
15649 If you were take a simple level of interest
or measure of interest, general interest, as your sole tool or primary tool for
determining your penetration rate, I think that would be a
15650 I think what it does is, it gives you a
sense, first of all, as you go through deeper into your survey, it gives you a
starting point and from then you can get more and more detailed.
15651 In particular, what you need to do is get
specific about price. In other words: Okay, you're interested. What if you had
to pay for the service? Not only a general sort of a price question, if you had
to pay, I mean what does that mean? It could mean you are paying a nickel, it
could mean you are paying $5.
15652 The way we approached it, as I mentioned
earlier, was to give respondents two different packaging options. We had a theme
pack, which is a series of channels that are roughly related, for example like
an information pack, thematically related, and they were given -- we split
up our sample.
15653 Some respondents were asked: At $3 would you
be interested in that package if it had this particular service, Issues
specifically in this case. Some respondents weren't given a choice, they were
asked: Would you be interested if it was $5? Others were asked would they be
interested at $7. And those are different people.
15654 In other words, you are not asking the same
person: Would you be interested at $3, $5 or $7? You are picking a different
group of people each time so you are getting a very objective sense of what
people are willing to pay and how much interest falls off as you increase
15655 In addition to a thematic pack we also tested
a variety pack, a larger group of services, maybe 10 to a dozen services that
were spread across a spectrum. They would include things that might be
interesting or in the same category or genre, but also things that were widely
15656 For example, you could have Dance, Pets,
Issues and Work would all be fairly diverse along with six other types of
channels. Again, we tested that against price points, specific price points,
$12, $15 and $18. So that is in terms of packaging. We also asked
stand-alone. Would you be interested if you had to pay for it on a stand-alone
15657 Again to gauge -- since that is a new
part of what customers want is that pick-and-pay, if you will, that ability just
to purchase a single channel, not have it packaged, and that again was tested at
three different price points.
15658 So having dug deeper into the specifics of
general interest, I think what we have by way of developing our penetration
levels is something that is very substantially related to the market research
that was done.
15659 COMMISSIONER WILLIAMS: Thank you,
15660 I have a question on @work.ca as to Stornoway
has stated they are involved in a mentorship program for young Canadian
independent producers, writers and directors. Could you tell us a bit more about
that and how that will benefit young independent producers, writers and
directors in the @work.ca proposal?
15661 MS M. FUSCA: Before I elaborate on that
actually I wouldn't mind introducing, as I did earlier, you to Paul Kemp who
comes to us from Winnipeg who started with us on a project.
15662 There is also another young woman in the
audience today, Brigitte, who is from Montreal who started in the same way with
us. In fact, both of these young people are currently working with us. So I
would like at least Paul to start out by telling you how it began and I will
elaborate a little bit on that.
15663 COMMISSIONER WILLIAMS: Thank you,
15664 MR. KEMP: Just to follow up on that, the
mentorship program, I think Stornoways have a long history of supporting younger
people. I came to the company shortly after university and have been supported,
you know, from every aspect of the production phase all the way up to now I am
full producing, In fact, Canada's Brain Drain was my first producer's
15665 We, at Stornoway, have also dealt quite
elaborate connections with Carleton and Ryerson, journalism schools and film
schools, where we try to get two or three people from each school and have a lot
of success with them. Some of them have come back on short-term -- I guess
for short term stints with us, and others, like Brigitte, have stuck around and
15666 The idea for all -- this isn't just
@work.ca. For instance, I know you were just talking about that one, but on the
Issues Channel for instance, we have actually talked with the journalism schools
about their producing of short-form documentaries, long-form documentaries, and
if we could use those programs and build them in with our programming schedule
and have had very deep interest from both schools about having their students in
a real way being involved with the station.
15667 There isn't any formal situation like that
today, so that would be a way we would do it. Of course, in-house would be
15668 Martha, did you want me to go further than
15669 MS M. FUSCA: No, that's good.
15670 Obviously, having four channels would give us
an incredible opportunity to expand on that program, because typically right now
it has been in production. We are moving it into distribution. Then, you know,
with the channels you would get this huge wealth of opportunity and, as Paul
mentioned, we have talked to, for example, Sheridan, CWC, Canadian Women in
Communications, other women's groups, making them aware of these
15671 I think that what makes this one, APTN,
AFM -- I could go on. The lists are very long. I think what I would
like to mention about this initiative is that, as the President of Women in Film
and Television Toronto, for a number a years what I noted were that women in
particular, you know, have children, then go back into the work force and they
are not necessarily youth.
15672 We felt that we would have a number of slots
per channel if we were to be selected to be licensed with all four that would
provide for men and women who are in mid-life career changes and are returning
back into the work force.
15673 MR. GRAY: Mr. Commissioner, if I could just
add too. We introduced at the beginning -- Terry-Anne Boyles was with
us on the side panel who represents the Association of Canadian Community
Colleges which in turn represents 175 community colleges across Canada and
hundreds of thousands of students.
15674 We have established a working relationship,
an agreement, between us to work with -- at work.ca to do a number of
things, but one of them certainly involves some process of mentorship as well.
Again, across the country.
15675 COMMISSIONER WILLIAMS: Thank you, Mr. Gray. I
have another question on this mentorship program. How formal is the mentorship
program? For example, are beneficiaries assigned a coach to help guide them
through the labrynth? Is there training support, career pathing? Is it a one,
five, ten year relationship, assuming the employee stays the full
15676 MS M. FUSCA: It's actually very extensive.
You have gathered unto a good chunk of it. We don't want to make any promises
that may not be suitable for the employer and the, you know, mentoree to make
long term promises. It just has happened in the past that, you know, of say the
12 that have gone through Stornoway, we have got three that have become full
time employees, from Winnipeg, Ottawa, and they still live in their locations,
15677 We would provide them with pay equal to, you
know, starting out. We provide with very hands-on experience. I mean the only
way they get into it is to sort of roll up the old shirt sleeves and get
knee-deep into the work.
15678 This isn't simply observing. This isn't
simply, you know, being able to talk and have lunch or that kind of thing which
is all really quite wonderful. We really want these young people and/or mid-life
individuals to really get in there and see whether it's appropriate to them and
so on and so forth.
15679 Of course, this is a fabulous resource for
us. It's a win-win situation because it's a fabulous resources for us and where
it makes sense, we would keep some of the students that are graduating,
particularly from Sheridan, hopefully preventing them from going to
15680 COMMISSIONER WILLIAMS: The mentors. The
mentors I assume are not direct supervisors. They are seasoned television career
people that are not directly supervising these people, so a real mentorship
relationship can develop.
15681 MS M. FUSCA: We are obviously really
stretching the word and the notion of mentorship. Yes, they would be working
alongside highly experienced individuals. The reason why the channels were so
important is because they provide, you know, administration, marketing and
promotion, sales, just those other, you know, avenues, technical. Working with
somebody like Stu Turner would just be an amazing experience with that wealth of
experience that he brings to it.
15682 COMMISSIONER WILLIAMS: Thank you,
15683 I will now move into an area of programming,
beginning with foreign programming. Where do you plan to acquire the necessary
foreign programming, both initially and in subsequent years?
15684 MS M. FUSCA: We have with us here today our
Vice-President of Acquisitions and Distribution. Before I turn it over to her, I
would like you to note that it's really quite interesting that there's a
phenomenal amount of material. We only need to have a very small portion for
15685 I would like to turn that question over to
15686 MS ERWIN: Commissioner Williams, your
question was where we might source material.
15687 COMMISSIONER WILLIAMS: Yes. Where would you
plan to acquire foreign programming, both in the beginning initially and then in
15688 MS ERWIN: In my experience with TVOntario and
CBC and International Distribution, the -- I know that area of
business in terms of going to markets and the network of distributors and
programming sources that are available internationally.
15689 I was quite gratified. It seemed daunting at
first to take a look at programming, 1,500 hours a year, at the start of
this process. The Work Channel specifically was a big surprise. Our
international sources, because it's an English speaking service, were largely
from the U.K. The BBC was an extraordinary source, and a number of independent
production houses there as well as Film Australia and ABC
15690 Also, we were pleased in that regard at
finding the weight of product that we could have programmed four years with the
amount of material that we found. We were also able to work with Canadian
distributors that represented foreign companies.
15691 Work was an easy one to program. There were
so many products, programs and series that had not been airing in this
15692 COMMISSIONER WILLIAMS: Thank you. Now I would
like to talk about original programming. We note in your proposed Schedule 9 a
substantial amount of repetition of original Canadian programming. For example,
on Monday there are four and a half hours original Canadian programming coming
from only two shows of a half hour each, 12 Workopolis updates of a half hour
each and one more half hour show. Could you comment on this,
15693 MS M. FUSCA: Certainly. As I had mentioned
earlier this morning, what's very interesting and important to us is that the
information we are sending out to our viewers actually reaches as many of our
viewers as possible. Therefore, in the Workopolis, for example, strand, not
dissimilar to the issues update strand, what we will have is three or four
segments in each of those shows.
15694 One of those segments may be shown at eight
o'clock in the morning. That same segment may be shown, you know, two or three
times during the same day. Some of those segments may be only shown maybe once
or twice. It will obviously depend on what we feel is relevant at the
15695 If we get, you know, new and important, you
know, labour legislation news, keeping in mind that we never plan to be a news
channel on this channel either, we would again be putting into context. We
believe that that kind of information is very important for our audience to get
15696 As well, that information might come in the
form of, you know, one component in the morning and it might be married later on
in the afternoon and in the evening with commentary that would be appropriate to
that component. That's the way that these programs are built. Is that
15697 COMMISSIONER WILLIAMS: I think so. Does staff
need more clarification than that?
15698 MS M. FUSCA: It's just that it is a little
15699 COMMISSIONER WILLIAMS: Are staff satisfied
with the answer? Okay. Thank you.
15700 I guess during your opening remarks I was
pretty impressed by the advisory board you put together. It's a lot of people
with a tremendous amount of experience from all areas. Will the full advisory
board be working on work.ca or is there a committee of the full advisory board
or does the advisory board advise -- I will ask this once, I guess,
for all four services -- as a group on all aspects of all of the
15701 MS M. FUSCA: Well, we developed two groups.
One is the advisory board which is comprised of a smaller group of individuals.
Those individuals would actually be dealing with the Board of Directors. We
wanted to ensure that the promises that we made to you and to the Canadian
public and, indeed, to ourselves was really fully covered.
15702 These are individuals that, as you know, are
out there doing other types of work than we are. We believe that they can also
bring, you know, fresh ideas, fresh resources to the table a few times a
15703 The second group -- and so those are on
broad policy issues -- is our consultative committee, those who
actually meet a little more often and each channel actually has its own
consultative committee. We have chosen -- well, actually I think they have
chosen us, to work with us -- as you quite rightly mentioned,
fabulous, highly experience, well-regarded individuals to work on each of our
15704 The way that we had planned to structure
those, by the way, is that we would deal with all four channels at the same
meeting because again the notion of cross-over synergies is really quite
exciting. You know, you think that somebody like Celia Franca would be into
dance and dance alone, but she may very well have some very interesting things
to tell us on issues programming or @work.ca type of
15705 So basically that is the way that is
15706 COMMISSIONER WILLIAMS: Okay. So if I
understand it then the advisory board is a sounding board for the board of
directors and consultative committees I guess are more focused on individual
channels. Now, do they have a representative from the advisory board on each of
these? How do they pass their information between themselves?
15707 MS M. FUSCA: And I am sorry, I should have
been a little more clear. The consultative committee, first of all, would
actually be working with myself and our senior team of individuals. So it's an
ongoing directly, you know, program-related group. In terms of the interface
between the board of directors and the management team and the consultative
committee, of course, the way that that works is that I would be at the board
meetings, senior staff would also be at the board meetings and we would make
certain that they were married together and that we are not sort one group is
thinking one thing and the other group is doing something else.
15708 COMMISSIONER WILLIAMS: Good. It's a good
approach, thank you.
15709 I will now move on to the Issues
15710 THE CHAIRPERSON: Perhaps we can ask the
applicant -- I see you are all shifting papers. Sometimes we have asked
additional questions after each specific application, sometimes we have waited
until the end. Do you have a problem if we wait until the end? You won't lose
15711 Go ahead.
15712 COMMISSIONER WILLIAMS: Thank you, Chair
15713 Programming. The Issues Channel is described
as appealing to young adults. Could you expand on how the programming will be
designed to attract young people?
15714 MR. GRAY: It's described as appealing to
young adults, but I think it's important to note that it's meant to appeal to a
broad range of audience, but we are trying to focus on the fact that as well as
appealing to various demographics, programming of this nature, where it does
exist, in our view, in small bits is seldom focused on younger
15715 As we mentioned in the opening address, we
have a program called New Voices which indeed will be produced by, with our
assistance, young Canadians. It's also a matter of determining the subject
matter of both our programs and our sort of themes and strands. As we outlined
in the application, one of the concepts we have for programming issues is to
discover an issue, perhaps through our Issues Update program, perhaps in the
morning, that there is an issue we just cover from our interactive process that
there is something out there that is of concern to Canadians and we may have
small kind of reports on that, on Issues Update. During the day on later
versions of the program we will go to different perspectives on that from
different Canadians of varying sorts of expertise and it will happen that some
issues will grow larger and they will create program concepts for other kinds of
programming on the channel, be it documentary, discussion forum or phone-in
15716 And when we do all of that, it's very
important to us that we don't go to the regular sources that we often see in
newspapers or in the brief versions of this kind of programming we might see on
15717 So it is part of our concept to be concerned
about younger Canadians as well as other demographics when we go through that
process with any given issue.
15718 COMMISSIONER WILLIAMS: Thank
15719 In your opening remarks, you spoke of a
program called First Nations created for and by aboriginal broadcasters in
partnership with Issues Canada.
15720 Have you entered into this partnership
already and who with and what is the goal?
15721 MR. GRAY: Obviously, we are not launched yet,
so it's early, early discussions and we don't have agreements in place, but we
have had discussions with APTN, yes.
15722 MS M. FUSCA: And AFN.
15723 MR. GRAY: Sorry, and AFN as
well --enthusiastic discussions, I might add.
15724 COMMISSIONER WILLIAMS: Can we now move into
the area of nature of service? In your application, you state that the Issues
Channel will have a significantly different emphasis than any other specialty
15725 Could you elaborate as to how you would
ensure that the Issues Channel would have a different emphasis than CPAC, for
example, or CBC NewsWorld and Talk TV.
15726 MR. GRAY: Certainly. I would be very happy
15727 What we are not, if you are comparing to
those channels, we are not a news channel. We don't have "news" in our title.
NewsWorld is called NewsWorld and like many specialty channel it has a focus and
it will have some additional programming that is triggered or instigated or
flows from that particular focus.
15728 Issues Channel is not about news. It's not
about something that happened yesterday. It's not the crash of the Concorde,
it's not that kind of programming. What we will do is fare it out from the
audience, and as I said, from our programmers and our own feelings, of issues
that are of concern to Canadians and their ongoing coverage, their ongoing
discussion and debate from a variety of Canadians from various walks of
15729 What we are also not is any kind of live
event coverage. We would not have cameras on this hearing. We would not have
cameras covering Parliament, or whatever, without getting into the interventions
that CPAC, its prime focus is still capital to capital. We specifically do not
intend, and will accept any condition that we don't do that. The same as to news
15730 In the process of building our applications,
we naturally sought out intervenors, and I would like to read, if I may, a
couple of quotes extracted from a couple of the many interventions, positive, of
course, that we received.
15731 From Maurice Tudwell in Victoria:
"Here at last is a proposed television channel that will regulate sensation
and the 15-second sound bite to their proper places as hype and instead go after
the underlying facts as interpreted by qualified speakers of diverse background
and opinion. Speakers will be allowed to finish their sentences, complete their
arguments and leave it to the viewers, not the interviewer, to reach
conclusions. I cannot think of a greater service to Canada and to the television
medium than what is proposed".
15732 I would also like to read a comment from
Peter Newman, who I think you all know:
"As a chronicler of the Canadian political scene, I realize that while there
is much discussion of public affairs issues available it tends to be of the news
variety and almost totally emanates from Toronto, Ottawa and Montreal. Most of
these programs offer brief probes of the issues that shape our world instead of
allowing viewers the luxury of analytical depth and lively production. Stornoway
has a proven track record in these areas. Their slated intended original Issues
production I find achievable and highly watchable."
15733 We want to provide the audience with that
luxury and we believe that is what makes us quite distinct from the channels
that you mentioned.
15734 MS M. FUSCA: I would really like to add
something to that -- and I can only do it as a way of telling you a story,
and I will choose pesticides, one of my own personal pet peeves. On the Issues
Channel in the morning you might actually see a very small story on what is
going on with pesticides in P.E.I. In the afternoon, we might check out what is
happening with pesticides in Central Canada and later in the day we might
actually do a piece on pesticides in another part of the
15735 The following day, we would actually --
or the following week -- we could actually have a full-fledged
independently produced documentary on a story that involves the death of, say, a
child which has actually happened whose mother and medical authorities are
convinced died from playing in a park sprayed with pesticides.
15736 We might actually then build a very similar
project to Canadasbraindrain.ca where we will solicit and engage the Canadian
public and we believe also -- and so does the Sierra Club, I might
add -- in informing them on what medical authorities have found that about
this and where the Government of Canada stands on this issue, the fact that it
involves all levels of government and that kind of thing.
15737 So you can begin to appreciate, as with
canadasbraindrain.ca that began as a documentary goes onto the web, goes into
print, really is a very multimedia project. These are the kinds of ways that we
would dealing with issues on the Issues Channel.
15738 The other thing I would like to mention is
that I am sure all of us have noted that. We hear a story, it's in the news for
a while, you might even see a documentary, and then for some strange reason that
issue falls off the edge of the earth. I mean there are any number of them where
we can say, "whatever happened to that?". We don't know. Well, that won't happen
on the Issues Channel.
15739 Again, I would really like to reiterate on
the initiatives taken by this channel that are really nowhere. For example, "Two
Solitudes: An Uncommon Dialogue". How many times do French and English speaking
Canadians speak to each other, and about what? More often than not, we are
speaking "entre nous", and then on occasion we get the odd little bit. A very
critical kind of ongoing -- this is ongoing; not just once but
15740 The same thing with youth. How do you attract
youth? You let them tell you what they want to tell you. Don't tell them. This
is why we are going to be giving them the opportunity, 17-to-24, to tell us what
15741 I could go on, but I won't.
15742 COMMISSIONER WILLIAMS: Thank you,
15743 Just to get back to your pesticide thing, I
was just reading a paper on the weekend that said that pesticides have recently
been enhanced and that they were removing the strong chemical odours and adding
in artificial scents, floral scents, even bubble gum, to try and make them more
pleasing to the general population.
15744 In program categories, you have included
movies and drama programming in your proposed description. Given that such
programming could encompass a fairly broad range of dramas and movies, could you
provide specific examples of the types of Category 7 programs that you would
propose to air?
15745 MS M. FUSCA: Before I pass this on to my
colleague, again an experience story.
15746 Years ago I desperately wanted to do a
feature length documentary on Cambodia. It was very difficult to get the
financing and so on. Then I went to the theatre and watched "The Killing
Fields", and I came back and thought: Well, no need for that documentary. And it
hit such a huge audience.
15747 So that, from my view, is why we would have
15748 MR. GRAY: It is also important -- and you
heard this last week, I think, from Trina McQueen, and it certainly applies to
the Issues Channel. Sometimes an issue or a matter can be sparked with an
audience when its imagination is first triggered.
15749 The example Martha just used I think is a
good one. One could imagine "Lorenzo's Oil", or something, if one was talking
about medical issues and the medical system.
15750 The way we would want to use this is not just
simply air the movie but use the movie to trigger the issue and then follow
through, over whatever amount of time was necessary, with whichever of our
program strands made sense to take that issue on and carry it through and get
various opinions and views about it.
15751 COMMISSIONER WILLIAMS: What mechanisms would
you put in place in order to assure that the movies and drama selected for your
service properly reflect your nature of service?
15752 MR. GRAY: I think the starting point is we
are talking about one movie a week, with a couple of repeats. That is the most
we would do. We would happily accept a condition of one movie per
15753 It is not directly answering your question,
but if we are only airing one movie a week, it would be pretty bizarre to show a
blockbuster Schwarzeneger movie in the middle of a bunch of programming about
issues of concern -- bad programming, I would say.
15754 MS M. FUSCA: I would like to go a little
further with that, because I know the difficulty that can arise from
broadcasting of movies on these other channels.
15755 It will only be a film that actually has a
theme in it that provides a catalyst for other programming, whether in fact it
deals with an issue that would be on our Ombudsman series or something that came
from the 17-to-24-year olds.
15756 In other words, it is never a single
component of the broadcast schedule. We are not showing you a movie just simply
to show you a movie. That movie, in fact, has impact on the schedule and ongoing
in terms of public issue and discussion on those issues.
15757 COMMISSIONER WILLIAMS: I appreciate your
offer of one movie per week as a condition of licence.
15758 Would you accept a condition of licence
stating that no more than 5 per cent of the broadcast week would be drawn from
15759 MR. GRAY: Yes.
15760 COMMISSIONER WILLIAMS: I don't know how close
that works out to be.
15761 MR. GRAY: Our estimation at the moment was
around 2 per cent. So that is not a problem.
15762 COMMISSIONER WILLIAMS: That is a little
better for you.
15763 MR. GRAY: Yes.
15764 COMMISSIONER WILLIAMS: Good.
15765 MS M. FUSCA: Could I just ask before we go
on. I had hoped for 8 per cent, to be honest with you. I just felt that we could
really use that flexibility. Not that we plan to; it is just that it is such a
small per cent. We are talking below 10 per cent.
15766 It would enable us, just in case we had a
partner situation in a given week, to be able to do it. On occasion I can just
imagine that we might have that, and that is all we would be asking for: 7 or 8
15767 COMMISSIONER WILLIAMS: Okay. I heard you ask
earlier for movie, which Mr. Gray said was 2 per cent. We asked if you would
take 5, and we are at 8 now.
15768 I don't know whether to take issue with this
15769 MS M. FUSCA: I'm sorry. Actually, what Mr.
Gray was referring to is that currently in our schedule. What we have not had a
moment to confer on here -- because we are so anxious to answer your questions
as quickly as we can -- is to provide for the future. This is the schedule that
we have now.
15770 It actually occurred to me, to be quite
candid with you, after we put in the application that there are occasions when,
depending on the subject matter, it would be incredibly useful -- and I am
talking about the audience here; I am not talking about our
15771 It would be incredibly useful for our
audiences to have a companion piece.
15772 I think when we calculate somewhere around 7
per cent, it allows us the flexibility of the companion piece that might go with
the initial film, either a one two-hour or one 90-minute.
15773 If you could see your way through that, I
would be most grateful.
15774 COMMISSIONER WILLIAMS: So, I understand that
you would accept 5 per cent as a condition of licence, but ideally 7 to 8 per
cent would be something that you would be happy with.
15775 MS M. FUSCA: Yes.
15776 COMMISSIONER WILLIAMS: These conclude my
questions on the Issues Channel. Perhaps my colleague Commissioner Wilson who,
as many of you know, has a more in-depth knowledge of CPAC, will have a few
questions in that area at the appropriate time.
15777 I am going to move on now to The Dance
15778 My first question is in the area of nature of
15779 In your nature of service definition, you
state that the service will focus its programming on all aspects of
15780 Would you accept a condition that this
service will focus its programming exclusively on all aspects of
15781 MS M. FUSCA: Yes.
15782 COMMISSIONER WILLIAMS: Interactivity: Will
any of the viewer-produced content gathered on the Web site be integrated into
the service's programming; and if so, could you describe how?
15783 MS WALDEN: At the core of The Dance Channel
is the daily dancecast webcast called "Dancing the Web". So it is totally
integrated into the broadcast.
15784 We plan that this program strand will push
the edge on interactivity. Down the road we are going to seek out software
applications so that viewers can do their own camera switching. In the dance
portal there will be tools and software to allow the viewer to experiment with
the streaming video that will be webcasting and broadcasting.
15785 COMMISSIONER WILLIAMS: Thank
15786 You talked a bit about all the different
types of dancing that would be exhibited on this channel. I see one of the areas
called "Cultural Dancing".
15787 Could you tell me what your efforts would be
in that area, in the cultural dancing area.
15788 MS M. FUSCA: The interesting thing is that we
are a bit of a cheat, because we have so little work to do. When the various
dance communities heard about this channel, they have made life for us very easy
by coming forward, literally from coast to coast and as well from the
15789 So we have gone from aboriginal to celtic.
The list is even longer than I actually ever dreamt that it could be for a
subject that I truly love.
15790 COMMISSIONER WILLIAMS: In your application
you state that you have reached out to several culturally oriented broadcasters
to share second window dance programs.
15791 Are there specific agreements being made or
contemplated with any of APTN, Odyssey, SATC, Tele Latino or Fairchild? And if
so, what is the nature of these agreements?
15792 MS M. FUSCA: I don't know if Victoria may
want to add something in a minute.
15793 But again, as with other in principle
agreements that we have made with any other group, because we don't have the
channels again, what we have is very enthusiastic support and a genuine
willingness to work together, whether it is in the area of acquisitions and
indeed full-fledged co-production.
15794 MS V. FUSCA: If I may add that the only solid
agreement that we have actually comes from the Asian Television Network who has
been extremely supportive. I do have a letter, an agreement in principle, that
states that they have a huge variety, a wonderful variety, of dance, much of
which is Canadian content.
15795 They have actually also agreed to a licence
fee of $500 an hour, which of course will be very helpful to our
15796 MS M. FUSCA: Also, maybe Julia could step in
here because the Banff Centre for the Arts is very much on side on both counts,
whether we are talking about programming or interactivity.
15797 MS WALDEN: Yes, we have an agreement in
principle or a strategic alliance with the Banff Centre for the Arts with the
new media centre, and also you are probably aware that they have a world famous
dance training facility there, and they will be partners for production
resources. We are going to try to leverage each other's resources, and we will
also take full advantage of their expertise in new media.
15798 COMMISSIONER WILLIAMS: Great.
15799 I am going to move into an area now of
attractiveness and demand. Just a brief question on your summary of your market
15800 Your market research from Decima -- your
Decima research concluded that:
"The likelihood of subscription is highest when the service is offered as
part of a variety packaging, a package involving a broad range of alternative
15801 So if your opportunity for success is high if
you are packaged, have you given much thought to who you would like to be
packaged with or the kinds of services you would like to be packaged with? Are
there concerns in packaging?
15802 Given that 10 or more services will be
licensed as part of this process as Category 1 channels, how large, small, if
any, or number of packages should be developed as a result of this? Should there
be, for example, two or three packages or one big package?
15803 MS M. FUSCA: We prefer a slightly larger
package, and believe that, you know, a minimum of four or five would be best.
But I would like to also throw the question over to Gerry, who will have a
fuller answer for you.
15804 COMMISSIONER WILLIAMS: Dr.
15805 DR. WALL: Thank you, Commissioner
15806 I guess the first thing I would point out is
that you have to look at your BDUs separately because satellite is already
fairly well established in terms of how they are going at packaging digital
services. For example, they have theme packs already up and running. So they
look at a service and try and determine would it fit in with an existing
package, a thematic package.
15807 For the cable industry, who is just entering
the digital age, it's much more open in terms of how will these things be
packaged and how will they be offered. In terms of this specific channel, a
dance channel, while the market research we got had highest response in a
variety pack, I think the theme pack is just underneath that. I think they both
came up around 38 per cent with a slightly higher number for
15808 So I think you would be equally well off for
this channel if you went either thematically or in a variety
15809 In terms of how many packages, at a
philosophical level I think what you want to do is provide the consumer with as
many options as you possibly can, ways of getting that service.
15810 I don't necessarily see this or any other
service being offered just in one package, particularly with the technology,
that it will allow you to put it in a couple of different ways, thematically,
variety pack, standalone.
15811 So, at a philosophical level, I think what
you would like to encourage is the offering of that service in as many different
packages as possible. In terms of the number, I think Martha has already
answered the minimum number of five services.
15812 COMMISSIONER WILLIAMS: Okay.
15813 In the area of independent production and the
contribution to independent producers, it's unclear how much of Stornoway stated
Canadian telecast commitment will be indicated to independent production as
compared to in-house production.
15814 We note that you have budgeted 22 per cent of
Canadian telecast expenses, rising to 39 per cent in year 7, to programming from
independent producers. Will the rest be in-house production, say, for example,
15815 MS M. FUSCA: No. Our commitment to the
production from Stornoway or in fact Cogeco with Carrefour would be the same for
each channel. We would be making the same commitment -- in other words, less
than 10 per cent would be coming from Stornoway.
15816 COMMISSIONER WILLIAMS: Less than 10 per
15817 Okay. That completes my questions in the area
of the dance channel.
15818 MS M. FUSCA: Commissioner Williams, would it
be untoward to ask yours and the Chair's indulgence? We have with us today Sean
Debidin, who came from Winnipeg, in the middle of choreographing a Disney movie.
I just thought if we could just take 15 seconds to allow him to speak on
behalf of, you know, the dance communities in this country. We are talking
Saskatoon-like communities and Yukon and so on. Could we do
15819 COMMISSIONER WILLIAMS: I would hope, since he
came from so far away from otherwise important activity, that he would take more
than 15 seconds to do this.
--- Laughter / Rires
15820 MS M. FUSCA: Thank you ever so
15821 THE CHAIRPERSON: Anyone who can speak while
dancing on Monday morning is welcome.
15822 MS M. FUSCA: Thank you.
15823 MR. DEBIDIN: I have a real unique position
with the dance community in Canada. Several years ago I got frustrated by losing
Canadian talent that would find their way to the States believing that they can
only find work in the States. So I took it upon myself, packed up in my car and
started driving across the country looking for talent. I discovered a community
that is alive and well, that is screaming to be heard, seen and
15824 I have continued to do this on my own time in
the past three or four years and have now based myself -- even though I'm based
out of Toronto, I pretty well have found a home in about 21 different
communities across the country.
15825 So I'm a little tired from travelling right
now, as I speak, but I feel that channels like The Dance Channel would give not
only an opportunity for us to show our talents but also to educate the country
about each other. People in Saskatoon know very little about people in Quebec
when it comes to dance, when it comes to the cultural part of it, as well as the
social and artistic part of it. I think it would help develop the companies and
communities that turn to the government for help. They would be able to support
themselves by having their profile raised and featured.
15826 I think one thing that I'm very, very
passionate about is to keep our talent in Canada. I'm having a hard time sitting
easy when we start bringing our American talent up here because we just haven't
looked hard enough to find the talent in Canada.
15827 I believe the importance of this channel is
underlined, that it wouldn't be seen for awhile but it would certainly have a
tremendous impact on the Canadian arts community.
15828 Thank you.
15829 MS M. FUSCA: Thank you, Sean.
15830 COMMISSIONER WILLIAMS: Okay. On with the dog
and pony show.
--- Laughter / Rires
15831 COMMISSIONER WILLIAMS: First I would like to
talk about I guess just the area of synergy because of your partnerships. This,
of course, would apply to all of your services, but I'm bringing up the question
in this particular one.
15832 Stornoway has stated that:
"The dynamic and creative ideas of Stornoway will be enhanced and
complemented by the programming and Internet skills of Cogeco."
15833 It adds that:
"The partnership is the financial, technical and programming resources and
expertise necessary to launch and the entrepreneurial spirit to seize the
15834 Can I get you to expand on that a bit as to
the synergies your partnership will lend to these channels?
15835 MS M. FUSCA: Absolutely. I would like Michel
to add where I leave off. I will talk primarily about Stornoway.
15836 We have been around for 20 years. Ironically,
but I suppose not surprisingly, we made our first entry into the business from
the U.S. and back into Canada. We have been producing information, public
affairs and social affairs programming since 1983. So we actually bring an
incredible wealth of experience in the production and distribution of that
product outside of this country. We have only managed to produce the type of
programming that we have produced in this country because we were able to
leverage our talent originally, and eventually our reputation, into the U.S. and
into Europe and indeed Asia, so that we are very well known in Canada and
15837 In fact, when I think of people like Trina
McQueen and Ivan Fecan, I actually think of them as my colleagues -- you know,
we are talking about content -- and, again, with Jim Macdonald, and so on and so
forth. So this is where we come from.
15838 As you know, when we are talking about
attractiveness -- as we were with Madam Bertrand and Madam Wylie earlier -- when
we were talking about attractiveness, I mean, we have the track record to prove
that we have developed, produced and distributed attractive programming that
other applicants have programmed in prime time to critical acclaim and high
ratings, programming that has been launched at the United Nations, at the White
House and here in Ottawa.
15839 So married to that -- and we are so
delighted, I can't begin to tell you how delighted we are to be in partnership
with Cogeco Radio-Television. I would like to hand it over to Michel who will
talk about what they are bringing to this incredibly dynamic
15841 MR. CARTER: Thank you,
15842 Indeed we are very happy to be partnered with
Martha and her team. They came to us with the idea and they were enthusiastic
and they knew where they were going and it looked like for us a right
15843 Some examples of synergies, we have been in
broadcasting for now over 43 years. We have been close to our public in all of
our regions and, therefore, we have produced news and public affairs for a
number of years. We know what the public wants and we can go below the tip of
the iceberg. We are used to that in our communities.
15844 Another example, we will start shooting the
eighth season of a series called Pas si bête que ça for the TQS Network which
talks about pets and animals and it is a very successful show on the TQS Network
now for eight years.
15845 We will be producing, for the third year,
another series called Plein Emploi for our regions of Sherbrooke and
Trois-Rivières where we talk about work. This is done in collaboration with the
various levels of government and we help people find jobs in the
15846 In addition to that, to the production
capabilities and the knowledge we have, we bring traffic and sales expertise as
well as the use -- the environment of automated control
15847 So I think we are bringing lots of
broadcasting, per se, experience to the partnership and we are delighted to be
able to do that.
15848 MS M. FUSCA: I would just simply like to add
that on the Internet -- and having had the privilege and the pleasure of
working with Julia Walden and Nancy Smith on interactivity -- just three
seconds on bragging for a moment.
15849 If you had the opportunity to really visit
canadasbraindrain.ca as opposed to just simply watching it but actually
participating in it, it is the most dynamic interactive Web site that I believe
exists in this country.
15850 Each of the components you may have seen
before, for example, you know, streaming video. We know that people like CHUM
have streamed whole channels, so streaming video.
15851 We know that there are surveys that are being
done. What we believe -- and we have Oleh here to discuss it if anybody is
curious about it -- we believe that getting results in near real time is a
very tricky and highly innovative business which we take advantage of on this
15852 We also have a chat discussion forum in
there. We also have facts and factoids, you know, some fun stuff -- the
price of an Oreo cookie in Canada versus the U.S., that sort of stuff. So there
is a lot of fun.
15853 What is incredibly unique, okay, is the
marriage. This is where we are really terrific. When you are talking about
attractiveness, diversity and content, this is where we excel. This is where the
other applicants come when they want attractive, dynamic programming that is
wholly Canadian. This is where they come.
15854 So there isn't a Web site that has actually
married all of these various components and made it attractive to, as you saw in
the video, young kids and, you know, quite elderly individuals.
15855 So that is the end of my
15856 COMMISSIONER WILLIAMS: Well, I'm going to
give you an opportunity to do a bit more.
15857 The Pet Network programmers will provide the
tools and resources to allow users to build pet pages and link them through a
series of pet communities to the pets portal.
15858 I guess I would like to spend a bit more time
on Stornoway's plans for interactivity for The Pet Network.
15859 I'm going to take a look at your
braindrain.ca whenever I get some free time one of the evenings this week just
to take a look at it, but for purposes of this questioning I'm interested in how
and what your plans are regarding The Pet Network.
15860 MR. GRAY: The biggest part of the plan is to
connect pet owners with the channel in a number of ways, and I will ask Julia
Walden to give you some more detail about what our specific plans
15861 MS WALDEN: Well, as you remember Bill's
opening remarks about all of the Web sites and the particulars of the Web sites
already built, so we are going to go with that. In other words, we are going to
give something to that community and to that community's enthusiasm about their
15862 So we are going to bundle tools or software
so that pet owners can contribute to our Web site to make it their Web
15863 When I talk about tools I mean things like
Photoshop, on a simple level. Give it to them at a discounted price or in a
15864 Another tool at a more advanced level could
be an educational game which involves pets, animals, for a family household with
a pet. It's a good learning tool, not just for children but also for
15865 You were talking about mentoring, I mean
there is such a thing as reverse mentoring as well so that the children in the
family might bring their parents on-line and help them learn about the
15866 We will review and recommend some of the best
sites out there so that The Pet Networks portal will be a source of
authoritative information, reliable information on the serious
15867 As digital television rolls out there is a
lot of potential for things like auction programming, live auction programming
for pet products beefed up with content, integrated with
15868 MR. GRAY: The other element of this, too, is
the marketing potential both in the marriage -- in the marriage of the
television and in the interactive side.
15869 Nancy has a comment or two.
15870 MS SMITH: What we see happening in the
marketing community is, marketers are trying to adapt to the change where a lot
of control that has really been in the hands of the broadcaster or the marketer
is now shifting to the consumer. What is key in the future is to build
relationships with the consumer and to be able to market to them in a way that
isn't as passive, that it is in fact interactive.
15871 There are buzzwords like viral marketing and
permission marketing, and what that really means is that I communicate an offer
to you or an opportunity to you that you actually have told me you want to
receive, that I am helping you in a way and that our dialogue is really
something that is viewed not as an irritant and not as an interruption, but it
is actually viewed as something that is welcome and helpful.
15872 So Pets is only one place where we can prove
that the relationship we are building with our audience will help us to take a
very leading role.
15873 COMMISSIONER WILLIAMS: Thank you,
15874 We will now move into the area of nature of
15875 The Commission notes that you have included a
range of drama programming in your program description. Could you give us an
estimate of the weekly number of hours you propose to allocate towards drama
programs? And would you be willing to accept a condition of license restricting
you to a specific number of hours or percentage, as we worked on
15876 MR. GRAY: We would certainly accept
10 per cent in Category 7. And we would be willing to accept a
condition of license to that effect and that the nature of the programming is
programs that feature pets, stories that feature pets.
15877 COMMISSIONER WILLIAMS: Okay. Now I'm going to
go into the area of your program schedule.
15878 Schedule 10 refers to the program
Perfect Pet People as a Category 5(a) program, which is formal education
and preschool. However, this subcategory has not been included in the proposed
program categories. As with the other earlier, do you wish us to add this in for
15879 MR. GRAY: Same problem, same
15880 COMMISSIONER WILLIAMS: Okay. Original
Canadian programs. It is noted that you have identified a certain number of
original Canadian programs in your program schedule. For clarification purposes,
could you give us an estimate of what proportion of your program schedule these
programs represent? For example, could you indicate the total number of original
Canadian programs that you propose to broadcast on a weekly basis, excluding the
15881 MR. GRAY: I actually have numbers here on a
larger basis than weekly. We were tabulating on an annual basis in terms of the
number of hours. The number of original hours over the course of the term
was -- is 7,400 approximately, which is about 1,100 in the first year
and then it grows there according to our other formula.
15882 COMMISSIONER WILLIAMS: Okay. Contributions to
independent producers. With regard to the partnering of the application, you
have stated that you would accept a conditional licence that a Stornoway
production may not appear on the Pet Network in the first window during the
first year of the licence. Would you accept a similar condition of licence
limiting programs production by les Productions Carrefour Inc.
15883 MR. GRAY: Yes.
15884 COMMISSIONER WILLIAMS: Okay. This concludes
my questions on these four services. They are very interesting. I have enjoyed
questioning you and your responses. I know my colleagues will have some
questions on many of the different areas and, for sure, Commissioner Wilson may
want to scout out the landscape of one of her pet areas of interest. It's an
inside one there.
15885 I will pass it back to Chair Wylie
15886 THE CHAIRPERSON: Yes. This process is mainly
to clarify things. I'm not that clear on this independent production. Your
applications, two of your applications, talk about limiting Stornoway to 10 per
cent. Two of your applications talk about that probably in one case will not or
in the other case the applicant would not use or air productions first window in
the first year.
15887 This is not at all what we have been speaking
about this morning. It's quite different. I want to know what we are talking
about in all applications. Is your commitment that there would be no more than
10 per cent of any window programming in any year of the licence that is
produced by a company that is owned -- that is related, but by equity,
with either of the partners in the application to the level of 10, anywhere up
to 15 per cent? Is that your commitment in all four?
15888 MS M. FUSCA: Yes. And I'm sorry. We have been
a little remiss in being as clear as we could have been. The two issues are in
first window, just let it be known that across the board on all four channels
you will not see in the first year a Stornoway production or one from Carrefour
or any company related beyond -- related in any way, shape or form
that would have a first window on any of these channels.
15889 THE CHAIRPERSON: Even if it
fitted -- even if it did not cause you to go beyond the 10 per
15890 MS M. FUSCA: Even so because we wanted to
send out a signal to the independent production sector in the first instance,
okay, that this was not going to be, okay, let's all gear up and get ready to go
on these private companies to produce for these channels.
15891 Furthermore, we made it very clear with the
signal that we would not have any more than 10 per cent on any channel that
came from the existing businesses that have gotten together, Stornoway
Productions and Carrefour, that would be shown on any of these channels ever and
also would not be calculated from the moneys that we have allocated to the
independent production sector.
15892 THE CHAIRPERSON: You are adding the word
"existing". Presumably if there was such a condition, it would capture any
further investment that there may be --
15893 MS M. FUSCA: M'hm.
15894 THE CHAIRPERSON: -- from a production
company. Now, I'm glad it's to the production industry you want to send a
message and not to us. There is a slight --
15895 MS M. FUSCA: We were just hoping you would
15896 THE CHAIRPERSON: There is a slight
contradiction, Mr. Carter, in your comments about the value -- you can
abuse me of the -- disabuse me of the
contradiction -- between saying that Cogeco, there's a value in having
this partnership, so to speak, with Cogeco because of its experience and yet
agreeing to limit its ability to provide programming in which it had a hand to
10 per cent.
15897 In what other ways would the synergies
between the two companies be of value given this fairly restrictive
15898 MR. CARTER: We never entered into this
partnership with a view to producing a lot of programming. First of all,
currently Productions Carrefour produces exclusively in the French
15899 THE CHAIRPERSON: Except
that -- unless you have some bilingual pets -- you referred
to programming that will be quite suitable for the Pet Network that you are
already producing and seemingly putting that forward as an advantage of the
combination, which we may lose with a very restrictive condition of
15900 MR. CARTER: Well, we don't feel that the
condition of licence proposed here is restrictive to the point that it removes
our interest to the channel. We are quite in agreement that we have to support
the independent production sector.
15901 What we are bringing to the table is a lot of
expertise and synergies with our existing traffic people and our existing sales
organization people which we fully anticipate will collaborate with all of the
four networks or any of them being licensed by the Commission.
15902 With respect to our production experience, I
think we will be in a position to bring ideas to the consultative or advisory
boards as to what works and what does not with respect to Pets or Work or we can
bring -- could the Quebec view, for example, on the two solitudes that
has been discussed previously? Those are the types of input that Cogeco and
Carrefour can bring to the table.
15903 THE CHAIRPERSON: Commissioner
15904 COMMISSIONER WILSON: The inside joke is that
my dog's name is Scout. I would be a member of that semi-obsessed audience. Our
Chair was laughing at me during your presentation on the Pet Network because I
talk about my dog all the time.
15905 Before I venture into my question on my other
pet area of interest, I just want to say that when I came out and looked at your
tag line for the Pet Network, I had a really good laugh. I remember going
through exercises developing tag lines. You want something that's obvious,
that's memorable, that gives people a laugh and that says it all. I really
15906 As Commissioner Williams noted, I do have
some familiarity with the area of public affairs broadcasting and with the
vernacular used to describe it vis-à-vis distinguishing it from what is already
available in a system. In fact, I have written a lot of that vernacular myself
over the years.
15907 In your opening remarks, you posed a number
of rhetorical questions. On pages 8 and 9 you say:
"-- where on the dial can we find a comprehensive service completely devoted
to the ongoing discussion of public and social affairs issues not in the news?
... Where can we go for context? Where can we turn to discuss, vent and explore
our values, concerns and attitudes with the rest of the
and on all counts.
15908 I have to answer to myself "CPAC". One of the
things that is really important for us in this whole exploration of digital
licences is how to distinguish what is competitive and what is not and how to
define direct competitiveness.
15909 I guess my first question is when we consider
the issue of directly competitive, should we -- besides looking at the
direct overlap of programming, should we be looking at such things as whether or
not the channel has must carry status, the levels of Canadian content, the rate
or the costs to the subscriber for the service and the presence of
15910 Should we be looking at those things to help
us distinguish what is directly competitive and what is not?
15911 MR. GRAY: I think when it comes to CPAC, it
is a bit of a different situation because technically, as you know, CPAC is not
licensed as a specialty service.
15912 COMMISSIONER WILSON: Yes, I would argue that
that could be called splitting hairs, it's still in the system. The programming
is there regardless of the nature of the channel, but why don't you just address
the substance of the direct competitiveness and leave that
15913 MR. GRAY: Our view is that CPAC, while it
does have programming that is of a similar nature as the kind of programming we
are talking about on Issues, again its starting point, as I mentioned earlier,
was, and arguably remains, capital to capital in nature.
15914 I take your point absolutely and agree with
you about addressing the other elements that you raised, but also it's important
to us -- the diversity of voices issue is very important. Nobody has a
stranglehold on ideas -- nobody should have a monopoly on ideas, I should
say -- and what we are offering here, we believe very strongly, is a
channel that provides a new voice to social and public concerns.
15915 In our application and in our opening
presentation, we referred to -- or tried to refer to the difference --
between public affairs and current affairs because we were trying to find words
that would create the distinction. But it's difficult and it gets to be kind of
15916 So we sort of avoided getting too far into
it. It's the content that matters to us, as we have said, with all of our
channels, but in this one in particular it's how we approach it and what we do
with it, how we carry a topic for the long haul whether it has spun off
something we have found or it's something that has grown from the ground up that
we discovered through our audience and we address them, the concerns that we
raise, through a variety of program types and a variety of
15917 COMMISSIONER WILSON: When you say "a new
voice", are you suggesting -- I mean, of course, in the journalistic world
and in the political world there has been lots of discussion about whether or
not individual broadcasters have a particular voice, but when you talk about
bringing a new voice to the area of public affairs broadcasting, are you
suggesting that somehow the ownership of the channel has an impact on the voice
of the channel because that seems to me to be what you are saying, that no one
has a stranglehold on the voice.
15918 I would argue that good public affairs
programming of which there is a significant amount in the system already, not
just on CPAC, but on NewsWorld and RDI and the conventional broadcasters, good
public affairs programming has the voice of the people in it and that is the
voice that is communicated.
15919 MR. GRAY: I didn't mean to create any sense
that there was an editorial -- to say anything in an editorial sense. It is
absolutely the voice of the people and that is what we see The Issues Channel
being and for 24 hours a day, seven days a week throughout the year that's what
it is. It's not partly something else and partly public affairs. It's fully
15920 We want a variety of voices, we want
opinions, we want opposing opinions and we think that the system does not have a
channel that exclusively deals with that and it does bring a new voice, not our
voice, not our editorial voice. We don't have that, that's why we have our
consultative committee and our advisory committee to ensure that we have
15921 But it is new voices that were in the system
that raise concerns that are not necessarily being dealt with.
15922 MS M. FUSCA: May I
15923 COMMISSIONER WILSON: By all
15924 MS M. FUSCA: Thank you.
15925 The Issues Channel was my idea and it came
actually from a conversation you and I had a number of years ago
15926 COMMISSIONER WILSON: Great minds think
15927 MS M. FUSCA: -- I was here for the first time
in, say, 18 years complaining about CBC and I specifically stated at that point
that I firmly believed that there were very few people in the City of Toronto
who were determining what we got on the airwaves, and I decided, since I wanted
a channel such as this one since 1985 anyway, that I should put my money where
my mouth is and go into it on our own.
15928 If I firmly did not believe that we could
definitely -- we needed this channel, that we could definitely use
this channel, that this channel is definitely in the public interest as, you
know, hundreds of people who have put applications also believe, we wouldn't be
here frankly. We would have come up with perhaps another subject or left it at
three -- the other three.
15929 So that is where we come from to begin with,
but furthermore in terms of -- you brought up some very key words that
are actually in our application: Context, ongoing and diversity. I think that
the fundamental difference between CPAC and what we are proposing, it's not so
much that CPAC does not have ongoing, you know, programming of the gabble to
gabble nature on an issue, but it pretty much, let's face it, begins where it
begins and ends where it ends.
15930 When we talk about ongoing, we mean it in a
very different fundamental critical way. Our stories don't begin just because
something is happening in Parliament, or just because it's on in the news which
is pretty much what you are getting, not just on NewsWorld and CBC and CPAC.
That is not where we are coming from at all.
15931 Ongoing begins when we believe, as
programmers, when we believe and our partners, independent producers, believe a
subject merits attention. When the public believes, and often times you know,
you know, all right, that the public is very concerned about certain things, and
by George, try to get a little press on it. Good luck!
15932 That is where we are coming from. We will not
drop that issue simply because it is not in the news, simply because it's not on
15933 Furthermore, we also believe that the time
for dialogue and conversation is not when a subject is necessarily hot. I mean,
it's the worst time to be talking to unions particularly in education or health
care when everybody is up in arms. If you really want good, solid, honest,
truthful, open dialogue, it's before, it's after, not during a crisis. So we are
not into crises.
15934 I was in the room when Trina McQueen and
Maria Mironowitz so many years ago pitched us, as independent producers, for
NewsWorld and I specifically was told, and I firmly believe to this
day that NewsWorld was meant to be Canada's version of CNN with some
documentary specials, and so on and so forth. That is pretty much what NewsWorld
has been doing and adding a little eclectic mix of general interest stuff.
Totally cool, totally fine.
15935 This is not what The Issues Channel is about
and I tried earlier without boring you to give you a sense, you know, with
pesticides and with canadasbraindrain.ca, of the manner in which we will be
presenting these issues to you and I can only reiterate that with context, what
context does really CPAC provide? What context does NewsWorld, CBC or indeed the
very nominal amount which they have been purchasing primarily from producers
like Stornoway or the other conventional broadcasters producing? I suggest it's
15936 But in terms of context, there really isn't
any contest. There is an enormous amount of confusion. There is a documentary,
yes, it comes and it goes. There is a conversation, yes, it comes and it goes.
Where is the input? Where is the interactivity? And I will stop there. It's just
that I feel so passionate about this and I feel desperate in my effort to try to
make you appreciate, if I can, that it is different. We have no desire to be
competing with CPAC on any level, or NewsWorld.
15937 COMMISSIONER WILSON: I hope you will
appreciate that we are just trying to find an approach to the notion of directly
15938 MS M. FUSCA: Absolutely.
15939 COMMISSIONER WILSON: When you are talking
about doing a public affairs program, there is already a channel doing that and
many other channels doing pieces of that.
15940 So thank you for your views.
15941 MS M. FUSCA: You are welcome.
15942 THE CHAIRPERSON: Counsel.
15943 MR. McCALLUM: I believe in the discussion on
The Pet Channel you said that you would be willing to accept a condition of
licence of 10 per cent maximum drama programming in the schedule. Is that
15944 MR. GRAY: Yes.
15945 MR. McCALLUM: I would like to ask just the
same question for @work.ca. A couple of questions were asked to you about sitcom
or drama. I think there is Category 7(b), 7(a) and 7(g) that you have said you
would like to have in the program categories.
15946 I am wondering if there could be a limit to
Category 7 in @work.ca.
15947 MS M. FUSCA: Yes.
15948 MR. McCALLUM: And would that same limit of 10
per cent that was proposed in the other one be appropriate?
15949 MS M. FUSCA: Absolutely.
15950 MR. McCALLUM: For the three set
15951 MS M. FUSCA: Yes.
15952 MR. McCALLUM: Thank you.
15953 Similarly, with Category 5(a) -- and
again I think it was both @work.ca and The Pet Network -- you wish to add
it to the proposed nature of service, but again I would like to as the question
of would there be any limits to programming coming from that
15954 MS M. FUSCA: We believe that we can live with
10 per cent.
15955 MR. McCALLUM: So again, 10 per cent would be
the proposed condition of licence if the Commission saw fit to impose it for
those two applications.
15956 MS M. FUSCA: Yes.
15957 MR. McCALLUM: Thank you.
15958 With respect to the independent production,
in each of your applications you stated that a certain percentage of your
Canadian telecast expenditures will be for independent producers. For example,
at page 180 of the Dance Channel application, you stated that 22 per cent of
your Canadian telecast expenses, rising to 39 per cent in year seven, would go
to programming from independent producers.
15959 My question is: Where will the remainder
15960 MS M. FUSCA: The remainder will go to their
in-house production, the acquisition of Canadian-produced programming that we
did not put in the independent production category that could be coming from
community channels, places like TVOntario.
15961 MR. McCALLUM: So by in-house, what you mean
of course, in my understanding, is the company to be incorporated, which has
something like 49 per cent Stornoway and 49 per cent Cogeco.
15962 Is that what the in-house means in that
15963 MR. GRAY: In-house means what it would mean
for any broadcaster. The Pet Network will have in-house production. The Pet
Network will have staff, cameramen, studios and will indeed produce in-house
owned by The Pet Network material. That is what we are referring to
15964 MR. McCALLUM: I think we are seeing eye to
eye on that issue.
15965 MR. GRAY: Yes.
15966 MR. McCALLUM: Thank you. One final question,
and it is a clarification question again.
15967 At page 17 of your presentation this morning,
referring to The Dance Network, what you said was over seven years original
Canadian production represents 64 per cent of total programming
15968 I wondered if you had a similar amount or a
similar percentage of original Canadian production for the other three
15969 MS M. FUSCA: Yes, we do. Would you like them
15970 MR. McCALLUM: If you have them
15971 MS M. FUSCA: Certainly.
15972 MR. GRAY: They are just scattered in a couple
15973 You are referring to the percentage
15974 MS M. FUSCA: I'm sorry. Actually, they are on
our power point. Could we get that back?
--- Pause / Pause
15975 MR. GRAY: There you go.
15976 MR. McCALLUM: I don't think I can read
15977 MR. GRAY: So Issues is 76 per
15978 MS M. FUSCA: And I know that @work.ca is
actually 77 per cent.
15979 MR. McCALLUM: So that leaves, I think, The
15980 MS M. FUSCA: It is 64 per cent on The Dance
Channel. We knew that.
15981 MR. GRAY: And 78 per cent for
15982 MR. McCALLUM: Thank you.
15983 Thank you, Madam Chair.
15984 THE CHAIRPERSON: Commissioner Williams has
15985 COMMISSIONER WILLIAMS: This is not so much a
question as a light-hearted comment, I guess.
15986 When we came into this this morning, we had
come, sit and stay in good company with television that moves us about our
country and our ideas.
15987 Once again, I would like to thank
Ms Fusca and the Stornoway panel for their presentations and answers to our
questions this morning. You have certainly made our work easier, as we helped
you dance your way through your pet issues with us as they relate to proposed
Category 1 services. It has been a good morning. Thank you very
15988 THE CHAIRPERSON: We have some budding
--- Laughter / Rires
15989 THE CHAIRPERSON: We are willing to sit and
stay a little longer and to give you a few minutes to wrap up, Ms Fusca or any
of your colleagues, as we usually do. This is the part where you answer
questions we didn't ask.
15990 MS M. FUSCA: Thank you. Having been a
sweating bullet since last Monday when I watched everybody else, you are
actually a lot more fun to work with than I ever imagined.
15991 THE CHAIRPERSON: You mean we don't look fun
--- Laughter / Rires
15992 MS M. FUSCA: It is just more fun being
interactive with you instead of watching from a distance.
15993 Madam Chair and Commissioners, our livelihood
has revolved around original programming, attractive and stimulating content
that Canadians like to watch. We are entrepreneurs who love turning ideas into
real programs that make a difference.
15994 We understand the value of creativeness. We
appreciate the meaning of risk. We can relate to independent producers, because
we have been in the independent business for so many years and we thrive on new
challenges. This is why we are so thrilled by your call for new digital services
and why we have responded to your call with so much enthusiasm and
15995 We have come to you with four highly
original, distinctive service proposals that are ideal complements to the range
of Canadian television services that we have now; that are solid building blocks
for new digital service packages and the growth of digital and interactive
services in the years to come; that make outstanding contributions to Canadian
programming; that are clearly desirable, attractive and affordable to Canadian
households; that are backed by the resources required to make them succeed and
make strong business sense.
15996 We have come to you with the endorsement of
Canadians from all regions of the country, from all walks of life, and from
diverse origins, as evidenced by the hundreds of supporting interventions on
15997 We have come to you with significant prior
broadcasting distributor support, as evidenced by our agreement with
15998 Finally, but not least, we have come to you
as a new voice in the assembly of Canadian specialty broadcasting because we
trust that you will license based on merit, not just tenure.
15999 In this regard, Category 1 digital licences
provide a unique opportunity to bring new players into the Canadian broadcasting
system without detracting from any of the existing players.
16000 Give us our chance to step into the ring like
the established players have had in the past, and we will make you proud. Thank
you so much for hearing us today and for carrying out this complex but exciting
process to provide new avenues of communication to Canadians in the digital
16001 Merci beaucoup, merci
16002 THE CHAIRPERSON: Thank you, Ms Fusca and your
team. We will see you back with the same enthusiasm, we hope, in the next phase
of the hearing and eventually in Phase IV with your exam in
16003 MS M. FUSCA: Thank you.
16004 THE CHAIRPERSON: We will adjourn for lunch,
considering the hour, and treat ourselves to 15 minutes more by coming back
at two. We will have a slightly longer lunch today.
16005 So we will resume at 2 o'clock with the
16006 Nous reprendrons à deux heures avec la
demande de Pelmorex. Merci.
--- Upon recessing at 1215 / Suspension à 1215
--- Upon resuming at 1400 / Reprise à 1400
16007 LA PRÉSIDENTE: Rebienvenue à notre
16008 Monsieur le Secrétaire, s'il vous plaît. Mr.
16009 MR. CUSSONS: Thank you, Madam
16010 We will now hear an application by the
Pelmorex Leisure Network Inc. for a new Category 1 service to be called the
Leisure Network, L-NET.
16011 For this presentation, 20 minutes maximum is
allowed. We have Mr. Morrissette and colleagues.
PRESENTATION / PRÉSENTATION
16012 MR. MORRISSETTE: Thank you,
16013 My name is Pierre Morrissette, and I am the
President and CEO of the Pelmorex Leisure Network Inc.
16014 With me today, starting on my immediate
right, is: Paul Temple, our Senior Vice-President, Corporate Development; on
Paul's right is Basia Ujejska, our Director of Programming; on my left is Luc
Perreault, Vice-President, Affiliate and Government Relations.
16015 Moving to the second row, immediately behind
Luc is: Alysia Charlton, Vice-President, Finance; to Alysia's right, Taylor
Emerson, Manager of Interactive Television & Commercial Services; and,
finally, on Taylor's right, Jean-Pierre Boulanger, our Senior Vice-President,
16016 Madam Chair, Madam Chairperson,
Commissioners, as several applicants have already noted, this hearing is about
the future of broadcasting in Canada. The Pelmorex team is delighted to have
this opportunity to share with you today our vision of the digital future of
broadcasting. With your approval of this application, we will start making that
future a reality by launching an exciting new interactive specialty television
service to be known as L-NET: The Leisure Network.
16017 Several applicants at this hearing are
proposing travel channels of one sort or the other. We agree with all of the
consumer research clearly demonstrating that one of the most attractive new
specialty services for digital distribution would be a service offering
relevant, up-to-date travel and leisure programming. L-NET will offer all of
that, but at the same time it will offer much, much more.
16018 While travel to distant locations is
undoubtedly an important part of leisure activities for some people, the fact
remains that most Canadians spend their leisure time in activities near their
homes: attending a concert, visiting a museum, going on a day trip to a country
fair, or simply exploring a different neighbourhood or nearby community. L-NET
is designed to meet the real day-to-day needs of Canadian viewers, helping them
to plan the optimal use of their leisure time.
16019 L-NET will be an authoritative Canadian
source for leisure and travel information programming, showcasing the wide
variety of recreational, cultural, travel and tourism opportunities available in
all parts of Canada. Viewers will discover interesting people, places, sights,
sounds and activities in their own neighbourhood, across the country and around
the world. It will help viewers to plan their day, their weekend, the next few
weeks or months, their next trip or vacation.
16020 L-NET will also incorporate a strong
interactive element, providing viewers with the opportunity to personalize
additional content on demand. Through interactivity, a viewer will be able to
get more information, events, transportation schedules, show times and so on.
Ultimately, viewers will be able to access supplementary local and regional
content to meet their individual needs. Our innovative interactive elements and
programming concepts will greatly enhance the value of the
16021 Why are we convinced that L-NET is the best
choice for a new programming service to meet the travel and leisure-related
needs of Canadians? We believe that there are several reasons, but let's focus
16022 First, our expertise is in the provision of
multimedia information services that meet the day-to-day needs of Canadians, and
this is something we do very well. Pelmorex operates two of the most successful
specialty services in Canada: The Weather Network and MétéoMédia. We have an
established track record in operating national specialty services with regional
and local content that is constantly changing and updated 24 hours a day. We
know how to acquire, process and deliver content, using several different
technology platforms. Our team is experienced, knowledgeable and highly
competent. L-NET fits perfectly with our vision and expertise and its format is
a natural complement to our existing specialty services.
16023 Second, Pelmorex continues to be something
that is increasingly rare in the Canadian broadcasting system -- a company that
is 100 per cent independent in its corporate structure. We do not have ownership
ties or corporate links to broadcasting distribution undertakings, or to
conventional television broadcasters, or to production companies, nor do we seek
such ownership ties.
16024 Pelmorex is independent in every sense of the
word. We do not have conflicting priorities when developing our strategies. We
are able to deal in an equitable manner with all sectors of the Canadian
16025 Third, and most importantly, we are convinced
that the L-NET programming concept will provide tremendous value to Canadians
and strongly support the Commission's objectives in licensing new digital
services. L-NET will be a highly attractive service that will engage both casual
viewers and those more involved in the search for relevant information to meet
their needs. We believe that its interactive capabilities will be compelling and
will in fact help spur the continued evolution of interactive broadcasting
technology and its use by Canadians.
16026 Now, let's take a closer look at L-NET: The
--- Video presentation / Présentation vidéo
16027 MS UJEJSKA: Now that you have seen a bit of
the style and flavour of L-NET, I would like to take a few minutes to review
some of L-NET's programming highlights and contributions to Canadian content and
to the independent production sector.
16028 L-NET will be unmistakably Canadian in
content and style from the first day of operation. We will broadcast a minimum
50 per cent Canadian content in year 1, increasing 70 per cent in years 6 and
16029 A significant portion of our schedule will be
devoted to the broadcast of original programming provided by the independent
production sector. This will represent in excess of 900 hours of programming in
the first year alone. Because our programming will look at events and activities
across Canada, this investment will primarily benefit the smaller independent
producers in all regions of the country, rather than just a few larger
production houses in Toronto, Vancouver and Montreal.
16030 Some examples of programming that we will be
commissioning from independent producers:
16031 Canadian Bed & Breakfasts. These are
recommendations, reviews and features on B&Bs for local weekend trips and
for longer vacations, including features on other things to do and see while you
are staying at the B&B.
16032 Travel Arts is where to go to enjoy the arts,
including galleries, museums and special presentations. The program would also
include interviews and reviews from people involved in the arts in Canada.
Interactivity would enable viewers to access additional material on specific art
shows, galleries and displaying artists, and video clips of displays featured in
16033 Campfire Confidential. This is about camping
in Canada's great outdoors, with recommendations from experts on camping trips
and activities. Interactivity would provide viewers with the ability to access
detailed maps, campsite listings and reservations, information about camping
equipment, and so on.
16034 Our in-house productions include This
Weekend, a weekly update of various events and special presentations with
reviews and suggestions for what to do for the coming weekend. Another in-house
production, Festivals, will feature highlights, interviews and details on what
to do at large events and small events, from the Montreal Jazz Festival to the
Neepawa Lily Festival in Manitoba. Interactivity for these programs would allow
viewers to verify schedules, dates and ticket prices, and to make ticket
reservations on line. We will make extensive use of independent producers for
our in-house productions, as we do now for The Weather Network and MétéoMédia,
further enhancing our contribution to this sector.
16035 In total, original Canadian productions,
whether produced in house or by independent producers, would amount to over
1,500 hours in the first year alone.
16036 We are pleased by the support that our
Canadian programming proposals have received, as evidenced by the numerous
supporting interventions submitted by independent producers. They understand the
opportunities that L-NET will present.
16037 We are equally pleased by the support and
interest expressed by festival and special event organizers in all parts of
Canada, such as the Craft Council of Newfoundland and Labrador, and the Pacific
National Exhibit in Vancouver, the Midway Lake Music Festival in Fort McPherson
in the Northwest Territories. These people all took the time to state their
support for our application, as did many others. They clearly see L-NET as an
excellent way to make themselves better known to the rest of Canada. The
reflection of Canada's cultural diversity to Canadians is an important part of
what we are trying to achieve at L-NET.
16038 Our programming schedule will be rounded out
by the best in foreign-acquired travel and leisure-related programming from
around the world. We are particularly enthusiastic about partnering with the
U.K.-based travel channel, which serves almost 7 million cable and
satellite subscribers throughout the U.K., continental Europe and Africa. This
partnership will provide us with an opportunity to showcase top-quality
international programming on L-NET and to enter into co-productions that will
provide a Canadian perspective for international travellers. It will also
provide new export opportunities for Canadian programming produced by the
independent production sector.
16039 MR. TEMPLE: In talking about the programs
that will be included on our schedule, Basia has briefly touched on some of the
enhanced services that could be made available through interactive capability.
The deployment of a fully interactive service is a central part of our
programming strategy and it is ideally suited to the leisure and travel
16040 We believe that interactivity will unlock the
full value of L-NET and we have developed an aggressive strategy that will make
full use of the interactive functionality of set-top boxes as subsequent
generations are deployed by distributors. At launch, it is likely that
interactive capabilities will be limited to our companion Web site, accessible
by separate PCs or by browser-enabled set-top boxes.
16041 As indicated by Rogers Media during their
appearance before you last week, we expect that Level 2 interactivity,
providing access to on-screen menus and additional pages of text and graphical
information, will become possible within a few months of launch and certainly
within the first two years of operation. At this point, interactive
capabilities, similar to those illustrated in our video presentation a few
minutes ago, will be available and fully implemented on L-NET.
16042 Finally, before the end of the license term,
probably by the fifth year, we are confident that increasing functionality in
the distribution networks and set-top boxes will make it possible for viewers to
access rich multimedia content, including full motion video from the L-NET
servers, to supplement the content on the main service. In this third stage, the
notion of a virtual channel whereby viewers can readily personalize individual
viewing experiences becomes a reality.
16043 In developing the L-NET concept, Pelmorex has
designed a service that will evolve as distribution technologies evolve.
Pelmorex is a leader in applying technology to the creation of innovative
programming services and we are confident in our ability to lead the way in the
development of interactive broadcasting in Canada.
16044 MR. MORRISSETTE: Madam Chair and
Commissioners, I hope that in the last few minutes we have been able to convey
our enthusiasm for L-NET and our conviction that Pelmorex is the right company
to bring this service to the public.
16045 With its emphasis on meeting the needs of
Canadians concerning information about leisure activities, L-NET will be more
than just a travel channel. It will be very much "Canada-focused" in its
programming and approach, meeting or exceeding all CRTC requirements. It will
make a strong contribution to the independent production sector, particularly
the smaller regional producers who don't always have access to the Canadian
16046 Pelmorex is a creative, innovative company
with a first-rate team and a history of achievement. We have made The Weather
Network and MétéoMédia into Canadian success stories. We have developed two of
the most popular Web sites in Canada. We have developed innovative means of
delivering content, using the Internet, print, radio, television and
16047 We now want to apply our creativity and
innovation to the development of a new Canadian success story, L-NET: The
16048 I thank you for your attention, and we look
forward to your questions.
16049 THE CHAIRPERSON: Thank you,
Mr. Morrissette and your team.
16050 Commissioner Demers, please.
16051 COMMISSIONER DEMERS: Thank you, Madam
16052 Monsieur, bonjour, mesdames.
16053 As you have listened to us in the last few
days, I will be starting with general questions and then get into more details
on your application.
16054 The first question is, of course, on the
16055 As you will recall, the Commission published
some of the selection criteria, namely for Category 1: Canadian
programming, contribution to program diversity, attractiveness, demand and use
16056 The question to you to open this discussion
is: What criteria do you think are most important in licensing Category 1
16057 MR. MORRISSETTE: Thank you,
16058 I guess initially I would like to say that we
view all criteria as being significant and relevant to the decisions faced by
the Commission in licensing the tier 1 services.
16059 However, having said that, we do identify two
particular criteria which, in our view, stand out.
16060 Firstly, the attractiveness of the service
has to be one of the top reasons for licensing a proposed service. By
attractiveness we mean the contribution that this service will make in terms of
showcasing Canadian programming produced for the Canadian market across Canada,
Canadian audience. It is definitely an area that is of particular
16061 Involved in that, of course, it involves
support for Canadian independent production. It entails also elements of
diversity. How unique is this service? How differentiated is it from anything
else that is available in the system today? But also, what appeal would it have
to the largest proportion of Canadian viewers out there?
16062 The second criteria that we view as being
extremely important is one that applies to interactivity. With the arrival of
digital distribution capabilities in Canada, this opens up all kinds of new
opportunities for the Canadian broadcasting system and one of those main
opportunities is the deployment of enhanced interactive television. This will
enable viewers to ultimately, as digital distribution evolves, personalize
programming on demand, which is a huge new value added for the viewer across
16063 In terms of interactivity, there is no
question that our particular service as an entertaining information service is
ideally suited for the deployment of interactivity. Our experience with The
Weather Network and MétéoMédia, also an entertaining, interesting information
service, is that these types of services for which the information is constantly
changing and for which it impacts on people's lives and daily needs, that these
kinds of information services are ideally suited for enhanced interactive
16064 When we are talking about L-NET, which is a
service intended to meet the needs of Canadians in terms of optimizing the use
of their precious time off, their leisure time, to have a location or a service
whereby they can access all the relevant information that goes into their
decision-making in this regard, that is where we see that the application of
enhanced interactive television greatly complementing the core television
service represents a significant opportunity. A company's ability and experience
and expertise in leading the way and fully optimizing the opportunities offered
by interactivity is a key criteria.
16065 COMMISSIONER DEMERS: Thank
16066 Maybe on your second criteria, interactivity.
At the moment you probably are aware of the discussion we had last week and
today. Would you be able to offer the interactivity you described in different
steps in your presentation? Where are we at the moment and what would you be
able to provide when the service goes on the air?
16067 MR. MORRISSETTE: Well, I think the answer to
that question is twofold: One that deals with our particular company and our
state of readiness and, secondly, the distribution system in Canada and its
particular state of readiness and its evolution over time.
16068 Let me start first with the second part of
it, and that is the distribution state of readiness.
16069 As we indicated in our oral presentation, we
see this evolution taking place in three different phases.
16070 The first phase is one where the interactive
capabilities will be mostly Web-based.
16071 However, as time progresses, a few months
after launch, perhaps by year two, we expect the second phase to be available,
and that is the availability of graphical, text, image-type of information that
the viewer will be able to navigate through by a menu to access the information
and initiate the process of personalizing information on demand.
16072 The third phase, which we view as perhaps
more towards the fifth year, the middle part of our proposed licence term, would
see the full implementation of interactivities, the deployment of streaming
video and audio capabilities to accompany the ability to navigate through a
guide or a menu rather, that would enable people to access a multitude of
information on demand.
16073 It's an evolutionary process. We have
developed our business plan not as a snapshot at a point in time at launch date,
but over the full seven year term that we expect -- that we would hope
for the initial licence term.
16074 Our company, to turn to the first part that I
was referring to before, has been thinking interactivity since the day in 1989
when I founded Pelmorex. At that particular time, our vision was that the
broadcasting system in Canada would evolve to the point where we would witness
the convergence of a PC type of information and programming and television type
of information and programming, resulting in interactive television some
16075 Since that time we have been constantly
incorporating strategies to make that happen. Our involvement with interactivity
goes back at least ten years. I remember in the early nineties when Pelmorex
acquired MétéoMédia and The Weather Network. At that time we already had
relationships with Vidéotron in providing interactive content for the Videoway
16076 In 1994 when Rogers was in the very early
stages, experimenting with interactive television, with its Rogers wave service
in the Newmarket area. We were one of the few programmers that was providing
interactive weather content for that service.
16077 When we were involved in Europe in the mid
nineties, we had a significant minority investment in Lachaîne Météo. Its prime
distributor happened to be Canal Satellite in France. The success of Lachaîne
Météo and Canal Satellite was dependent or attributable to the extensive use of
enhanced interactive television information made available by Lachaîne Météo.
This is five or six years ago.
16078 Since that time we have also had a fair bit
of experience in terms of developing two of the most popular Web sites in
Canada. One of our minority shareholders in Pelmorex is The Weather Channel who
are a leader in the States in all trials and in the early deployment of
interactive television. We share many experiences together in terms of planning
our strategies to be a leader in this area.
16079 Just recently we entered into an agreement
with Vidéotron to not only supply on behalf of Météo, The Weather Network,
interactive content for an enhanced television capability off of our core
channels, but also to supply weather content for their cable portal or, the
buzzword is walled garden, I guess. This is an agreement that we have already in
place and are working with them in terms of the deployment.
16080 We are also talking to basically all the
major BDUs in terms of implementing this. The bottom line, we are ready. We have
been looking forward to this day for a long time. In fact, we are ready today to
launch a Phase III service capability. We are going to have to wait a while
because we are ahead of the distribution marketplace, ahead of the technology in
the marketplace, but everything that we are doing today is to be there when that
happens and also to try and play -- strive to play a leading role in
making that happen.
16081 COMMISSIONER DEMERS: Thank you. We might go
on to another point. It's the matter of implementing the service. The question
is a general one. Should the Commission impose a minimum amount of time by which
a Category 1, like the one you are here applying for, must implement its
16082 MR. MORRISSETTE: We have witnessed through
discussion with other applicants the timing of next September 1. That has been
the assumption of our business plan all along. I would like Luc to perhaps
amplify that point.
16083 MR. PERREAULT: Yes, sir. Commissioner Demers,
indeed we would be ready for a September 1, 2001, launch. As discussed by other
applicants, we do believe that launching all of the Category 1 services together
as a group would be a very powerful marketing tool.
16084 If we look at the history of launching
Canadian pay specialty services, bundling has always been a quality factor in
the relationship between the programmers and the distributors and consumers. If
we go back to the early eighties when TSN and MuchMusic were offered stand
alone, à la carte, these services didn't do very, very well in terms of
16085 When they started to be bundled with pay
services and U.S. superstations, they did a lot better. When tiering occurred
and packaging options were augmented, the penetration raised.
16086 If we look at the U.S. experience right now,
major operators in the U.S. are bundling digital services. Recently operators
such as AT&T and Comcast and Cox and Adlephia Communications have all gone
to plans whereby they are packaging eight, ten, twelve, fifteen digital services
with a set top box, adding to that some digital music services and a small
markup and they are extremely successful.
16087 Their plans are to install, and if we go to
the Cable Labs recent press release, to install another five million set top
boxes in the upcoming fiscal year.
16088 It does show that a common startup date with
a strong marketing strategy, which we are fully prepared to work with the BDUs
in launching the service, will ensure a very high penetration rate and success
in the launch of the services.
16089 COMMISSIONER DEMERS: Thank you. You would
agree for the Commission to establish a minimum amount of time to launch these
16090 MR. MORRISSETTE: Yes. We think that's fully
16091 COMMISSIONER DEMERS: Thank you. Would you
have comments in relation to the launch of Category 1 in relation to Category 2
services as to the launching date?
16092 MR. MORRISSETTE: I will ask Paul Temple to
respond to that question.
16093 MR. TEMPLE: I think it's clear to us in the
Commission's call that the obligations of Category 2 services are significantly
less than those of Category 1. There's no guarantee in terms of distribution at
all. We certainly run the risk of when would they all be ready. Some might, some
might not, some may have distribution agreements, some may not. We run the risk
of jeopardizing the kind of launches as Luc suggested earlier.
16094 I think our preference certainly would be
when the Category 1 services are ready, presumably in the fall of 2001, we
launch the services. To the extent Category 2s are able to go, that's great, but
I think we would be concerned if the launch was delayed or extended in any way
waiting for Category 2 services.
16095 COMMISSIONER DEMERS: All right. It's not
clear. Maybe I didn't understand your answer. First, your opinion would be to
launch Category 1. Is that what you said?
16096 MR. TEMPLE: Yes. I think your earlier
question was should the Commission consider a common launch or a launch date,
whether that's a condition of licence or an expectation in its decision and we
would agree with that.
16097 In terms of having the same kind of criteria
established for Category 2, we don't believe that's appropriate. We would not
want the launch of Category 1 services to be in any way jeopardized by having to
wait for Category 2 services to be ready for launch.
16098 COMMISSIONER DEMERS: What I understand from
your answer is that Category 2 in your view should be launched after Category
16099 MR. TEMPLE: We would not want to see Category
2 launched before Category 1. They could launch with Category 1s or they could
launch whenever they are ready, or they may never launch.
16100 COMMISSIONER DEMERS: Thank
16101 Now, on another point, and here again from a
general point of view, independent production, because you have made oral
comments on this so the question is more of a general nature and you have heard
these questions probably being asked to other applicants.
16102 Do you think the Commission should require
digital services to make specific commitments to independent production --
16103 MR. MORRISSETTE: The answer is yes, and that
is a core feature of our proposal, our strategy and it has been our experience
with our existing services.
16104 Paul, is there anything you want to add to
16105 MR. TEMPLE: I suspect you will be getting
into our specific commitments, but just certainly in terms of a general policy I
think, yes, there should be a commitment by Category 1 applicants. They are
receiving preferential treatment in terms of distribution, so I think that there
should be an obligation on their part.
16106 COMMISSIONER DEMERS: Okay, because I was to
ask why and I think you brought some reasons why.
16107 You have made certain commitments to
independent production. For the purpose of those commitments, what do you mean
by independent producer?
16108 MR. MORRISSETTE: Well, given our role as an
independent specialty television broadcaster in Canada, our status as an
independent specialty television service in Canada, we view an independent
producer to be a producer in which we have no ownership.
16109 COMMISSIONER DEMERS: This would be of a
general nature, of a statement, because I understand you are not affiliated to
any production organization.
16110 MR. MORRISSETTE: That's
16111 COMMISSIONER DEMERS: Because you made a
statement to that effect. So an independent in your view is an independent with
no strings attached.
16112 MR. MORRISSETTE: Just the way
16113 COMMISSIONER DEMERS: Thank
16114 Do you have a view as to what is an
16115 MR. MORRISSETTE: Well, an affiliated producer
is one in which there are ownership ties and it could be a wholly-owned
subsidiary or it could be a farm in which, or an organization in which you have
a meaningful minority interest.
16116 Now, one could debate, I guess, the level of
ownership that applies. You know, it could be anywhere from 10 per cent to 49
per cent, but it's in terms of a minority position. So it's one basically in
which there is ownership ties.
16117 COMMISSIONER DEMERS: Thank
16118 Now, I will have a few questions of a
specific nature on your application. The first one is on the nature of service.
While most of the programs described in your Schedule 10 would be derived from
Category 3, which is reporting in actualities, the definition of the nature of
service does not include this category. So the question is: Should this category
be included in the definition of the nature of service?
16119 MR. MORRISSETTE: I will ask Baisa to address
16120 COMMISSIONER DEMERS: I imagine you need to
have Schedule 10, unless you knew the question was coming.
16121 MS UJEJSKA: We anticipated the question. Our
focus at L-NET is we are very focused with 75 per cent of our station dedicated
to Categories 5(b) and 1 and 11 taking 25 per cent up to maximum 15 per
cent from each of those categories.
16122 COMMISSIONER DEMERS: But on Category 3,
would you have comments?
16123 MS UJEJSKA: That is not included in our
application. We are focused just on these three, Categories 5(b), 1 and
16124 COMMISSIONER DEMERS: Thank
16125 Original Canadian programs. You provided some
figures in your oral presentation, but maybe we can look at it from a different
point of view.
16126 Could you please give us an estimate of the
total amount of original Canadian production you intend to do?
16127 MS UJEJSKA: In terms of ours?
16128 COMMISSIONER DEMERS: Yes.
16129 MS UJEJSKA: We will be doing a total of 1,508
in the first year.
16130 COMMISSIONER DEMERS: Okay.
16131 MS UJEJSKA: I could break this down for you,
if you would like.
16132 COMMISSIONER DEMERS: Please.
16133 MS UJEJSKA: In terms of co-production with
L-NET, we have 572 hours in the first year and independents amount to 936
16134 COMMISSIONER DEMERS: Okay.
16135 Competition. Would you consider Exploration
Network, that was the application filed by CTV, to be a competitor to your
16136 MR. MORRISSETTE: No, we do
16137 COMMISSIONER DEMERS: Thank
16138 Are the services sufficiently distinct that
the Commission could licence the two in your view?
16139 MR. MORRISSETTE: Yes, that's our view based
on our clear understanding of their proposal since their appearance here last
week. We view the two as separate and standalone.
16140 COMMISSIONER DEMERS: Thank
16141 On your business plan, can you comment on how
the conclusions of your demands survey correspond with the subscription revenue
16142 MR. MORRISSETTE: I will ask Paul Temple to
address that question.
16143 MR. TEMPLE: Within our consumer survey, we
did include questions related to certain price points. That was a little bit
experimental in the sense that we wanted to try and get a sense of interest,
whether there was any reaction to subscribers at certain price points. Half of
the survey respondents were asked one price point, half were asked another. But
in fairness that, as I mentioned, was more of a an experiment just to see
subscriber reaction because we expect that our service will typically be
included in a package of more than one service.
16144 So it was useful in giving us a sense of
things, but it wasn't the factor that was driving our penetration calculations
when we did our business plan. Because it's quite -- it's very hard to do
price point research. You are trying to describe a service, did the person
really understand it, are they maybe reading too much in or not enough in? So
it's not a terribly useful guideline in being able to say, "Okay, if 52 per cent
said they would, then we must have 52 per cent". You can't really correlate
it, but we did want to put some price point in just to get a feel for what
people's reaction would be and what we found was that people who were interested
in the concept didn't seem to be impacted by the price points that we tested
16145 So that was encouraging, but it's not
sufficient to say that that is the penetration we would get.
16146 COMMISSIONER DEMERS: Maybe on that last
point, your projected penetration of 75 per cent is rather high in a sense.
Could you explain the assumptions behind this projected penetration
16147 MR. TEMPLE: Certainly. It becomes really a
process of looking at a whole number of factors: the price, how we anticipate
the services to be packaged and promoted, the level of interactivity that will
be available at the time. What we did, as Luc mentioned a little earlier, we
looked at a number of things. One is we looked at how discretionary services are
being sold in Canada, and certainly the tradition has been to package. That is
what creates subscriber value, as Luc mentioned, in the early stages where TSN
and MuchMusic were available standalone and were not terribly successful in that
environment. Once cable operators started to package, after a while when you got
pay TV you automatically got TSN and MuchMusic.
16148 As we moved forward with tiers, there were
three different tiers. Now, I know if I call my cable company, I can get two
tiers or all the tiers, but I can't just get one or I just can't get no. 2, or 1
and 3, because the consumer value is created in the packaging.
16149 As Luc mentioned, again in the United States
the move is increasingly to this packaging concept for the major MSOs who are
launching digital. They have been offering digital services in packages for a
little while now, and they are moving into bundling and packaging. COMCAST is
adding 33 channels for $5.00.
16150 Adelphia -- I am reading here from a Cable
World article on August 9th:
"Basic customers will be more likely to upgrade their service if they know
they are getting more for their money."
16151 As a result, Adelphia is packaging digital
services with the box. When you get the box, you get the services. There is no
extra, or this or that. You go digital and you get a bunch of
16152 A couple of days ago AT&T -- so we have
COMCAST with about 7 million basic subs; Adelphia with 5 million basic subs.
AT&T released a press announcement on August 15th, and depending on how you
want to count them they have somewhere between 11 and 13 million subscribers.
They are now offering four packages, but with every package you get a bundle of
16153 I found it very telling in the AT&T press
release. They say things like:
"The new digital value package strategy not only simplifies our marketing
operations, but it sets the stage for AT&T broadband to deliver increasingly
excellent customer service on a wide array of AT&T products and services.
These streamlined offerings are designed to simplify the product sales process
and create efficiency among AT&T's broadband more than 5,000 customer
service representatives and to establish national economies of scale and
marketing AT&T's digital cable products."
16154 So when we looked at how we expect to be
sold, we expect that the reality is going to be that the light is going to go
on, and to create value; to get those boxes out they are going to have to be
putting together some very attractive packaging. That is what creates value for
16155 So when we developed our business plan, we
created a wholesale rate system that encouraged that very packaging. That is
going to create the value; that is going to get the digital boxes out. That is
going to make the service successful, and it is going to allow for the
reinvestment in more good programming and more interactivity.
16156 Pierre is helping me out
16157 In the ExpressVu filing I think they
mentioned that, notwithstanding that they have theme packages. They have done
very well in selling the whole bundle. I think they recorded or referenced in
their filing to the hearing that 80 per cent of their subscribers take
16158 So we suspect that if DTH can do it, for sure
the cable guys can do it.
16159 MR. PERRAULT: To add to what Paul just said,
what is very important I think, and that the major MSOs in the U.S. have
understood, is that if you want to have a smooth road out of digital technology
you have to have, first, high-quality services with high-quality content. And
that is granted.
16160 But on top of that, you have to have services
that can provide interactivity. And if you provide them with a very attractive
package at an attractive price, it is evident that the consumer will adopt
technology. If you want to have services that are successful, the only way to do
it is to package and package aggressively.
16161 COMMISSIONER DEMERS: Thank you. I have one
last question, and it is a pessimistic one. It relates to interactivity. If you
have already said everything on that point, then the answer will be very
16162 If for some reason you are unable to
implement the interactive components, how would this impact your
16163 MR. MORRISSETTE: Our business plan already
assumes a phased rollout for interactivity, so we don't expect a wide
availability of interactive applications amongst all BDUs in Canada on day one.
It is going to be a gradual rollout. That has already been factored into our
16164 There is no question that in the interim we
will have the web base capabilities that will provide the ability to viewers to
navigate and personalize their content on demand while the distribution
infrastructure evolves to ultimately provide the full potential for
16165 So that is fully incorporated into our
business plan. It is not, from a financial point of view, an issue in our
perspective. It is more a question of unleashing the full potential of
interactive over the full term of the licence that we are
16166 MR. TEMPLE: If I might just add, we are very
enthusiastic about interactivity; we are not naive. We understand that there is
16167 I think Pierre mentioned earlier that the
group as a whole shares a vision and a goal, and that is what we are here to
talk about. That is the most exciting part, or one of the most exciting
16168 As I said, we are not naive; we understand
that there are technical limitations. As Pierre mentioned, we have been working
very closely with a number of distribution undertakings. So we understand the
technical complexities. We have incorporated that into our business
16169 Having said that, we are still excited about
16170 COMMISSIONER DEMERS: Merci, mesdames et
messieurs; Madam Chair.
16171 THE CHAIRPERSON: Commissioner
16172 COMMISSIONER WILLIAMS: Thank you, Madam
16173 During the CRTC's recent regional public
consultation process, we received many comments from organizations and
individuals concerned with the visually compared.
16174 When we reviewed your application in terms of
service to the blind, under the category Other Matters it says that due to the
nature of your programming with its focus on travel and leisure information:
"...the audio portion of our service will tend to be very descriptive and
comprehensive and will therefore be of considerable value to the visually
16175 I was wondering if you could elaborate on
that; just how you think it would make things easier for the visually impaired
once you are producing this type of information.
16176 MR. MORRISSETTE: I will ask Baisa to address
16177 MS UJEJSKA: Most of our programs, as in some
of the examples I had spoken about earlier, are very rich in context. What we
mean by audio is that for the vision impaired you would be able to follow the
program and understand the nature of the program and understand the information
that the program is providing for you.
16178 In terms of DVS, we will be able to
accommodate DVS. But in the meantime we do have this as our foundation, the
16179 COMMISSIONER WILLIAMS: Thank you very
16180 THE CHAIRPERSON: Mr. Temple, on
implementation you are a good candidate for more questions, because you have
been on the launching side and the launched side -- although you have launched
more often than you have been launched to date.
--- Laughter / Rires
16181 THE CHAIRPERSON: Let me ask you this -- I see
two questions here.
16182 One is: Should the Commission put a deadline
on launching, as it has in the past -- in other words, 12 months, or whatever
period -- or else you have to explain yourself, why you are not ready; and again
an extension or the authorization, you have lapses.
16183 The other question is one that has arisen
during the course of the hearing, which is a common launch. Most parties, of
course, believe in the second one, that a common launch would make sense, would
be more cost effective; marketing money would all be put in one pool. There
would be more of a splash, hit the ground running, so to speak, with a good
package of services.
16184 The two are not unrelated, I suspect. If you
have someone who is not ready to launch and there is no need to explain why they
are not ready in the period, it delays everything.
16185 And, of course, if no one has a deadline date
to launch, because they are getting cold feet or because they just wanted to
occupy a genre and they are waiting for the economic situation of digital
penetration to be better, then we are missing the boat in trying to use
interesting programming as an incentive to launch.
16186 Can I hear you on both of
16187 One: Is there a need to have a
16188 And then: Is it feasible, from the
distributor's side and from the programming undertaking side, to set a launch
16189 MR. TEMPLE: Good questions.
16190 Well, there is nothing like a deadline to get
you motivated. Certainly, when Pierre sets my deadlines it gets me motivated. So
I guess, in the abstract, setting --
16191 THE CHAIRPERSON: He doesn't look that
--- Laughter / Rires
16192 MR. TEMPLE: Certainly, the key to success
will be having the programming services and the distributors working together in
concert. That, I think, everyone would agree, I would hope, is going to give
everyone the biggest bang for their buck in terms of marketing, if there are
going to be packages and whatnot, if someone isn't ready, and how do you do your
package, and you are going to add them on later, and it just makes the world, I
think, a lot more simple.
16193 In terms of actually trying to make sure I
answer your question, a common launch date, I think, is to the advantage of
everyone. The issue then is do you set a date. I will kind of answer in two
16194 In terms of ourselves, our application, I
think that we would certainly be ready. We have no, you know, second thoughts
about being able to launch this fall.
16195 But I think your question was more of a
general nature, and to be honest there are two components to being ready. There
is the infrastructure -- you know, do you have your programming, do you have
your staff, did you get your equipment -- and then there is do you have your
deal. In general, if you are not quite sure what the deal is, your point of
greatest leverage is that first agreement.
16196 THE CHAIRPERSON: By a "deal", you mean a
16197 MR. TEMPLE: Yes. If, for
16198 THE CHAIRPERSON: So you are not going to tell
me you are less powerful now than you used to be.
16199 MR. TEMPLE: Well, let's put it this way. The
first affiliation agreement sets a lot of precedence. We are in a world where we
are -- in a digital environment, there are a lot of precedence to be set. I will
give you an example.
16200 Earlier, one of the applicants, in
commenting, suggested that -- they were referring to a question about
transaction revenue, and they suggested that a portion of that transactional
revenue would go to the distributor. Now, that's a very significant precedent,
one that we don't really agree with. I can get into separately why we feel that
way, but if we have to be able to be ready to launch by a date, and we have to
sign an affiliation agreement that cuts in the distributor for a percentage of
the transactional revenues, we have set the precedent. Now, 50 per cent of
nothing is nothing, but in six years it may be something. We have already signed
16201 So there are a lot of issues that the
Commission is going to have to look at that are beyond the immediate control of
the programming service. In terms of those things that we control, I think it is
quite reasonable to certainly select licensees that you are confident have the
wherewithal to launch on time, and I think we are one of those.
16202 THE CHAIRPERSON: In relation to
competitiveness, you were asked about exploration and the answer was, no, that
you didn't consider it competitive. As you know, there are other travel services
16203 You have followed the hearing and know that
the Commission is planning to ask applicants at the last phase of the hearing to
tell us which other potentially licensed of the 88 applications you would not be
prepared to launch with. So we will hear further, because there are others that
are related, so that we have on the record the applicant's view as to where, if
another Category 1 application were licensed, it would harm the business
plan to the point where you wouldn't proceed.
16204 Of course you don't have to answer the first
question because you only have one service -- we plan to ask applicants to tell
us which service they would want us to consider, in order of priority -- but the
third question is also probably of relevance to you, which is how many do you
think the Commission should licence. So we will hear from you later about
16205 You were mentioning the American market
moving more and more towards large bundles, actually, so we will hopefully hear
from you as to what you think would be a sensible English language -- the number
of English language services that would be a sensible package.
16206 MR. TEMPLE: Just for the record, we have
already filed with the Commission -- I can't remember the date, but we have
filed with the Commission, a list of Category 1 services that we believe to be
competitive to ours.
16207 THE CHAIRPERSON: You have, even without being
16208 MR. TEMPLE: I guess we didn't have to, but
there was the date for filing interventions --
16209 THE CHAIRPERSON: You are entitled to change
your mind by Phase IV after hearing all the applications.
16210 MR. TEMPLE: I don't think we will change our
mind on the ones that we feel competitive to. Maybe we will add a few. We will
have to have a chat about explorations. But, no, we have filed a letter with the
16211 THE CHAIRPERSON: Because it is of course
possible that a discussion of applications sheds a different light on it, but
you will have the opportunity, if you want to, to redefine perhaps your reviews
16212 Commissioner Williams, do you have
16213 COMMISSIONER WILLIAMS: Thank you, Madam
Chair, I have just a couple that were brought about by your
16214 In relation to the notion of transactional
revenue sharing, will it not help provide a return on investment to the
distributors and ensure that there was a rollout of the highest technically
capable set-top boxes?
16215 There has to be a "what's in it for me" kind
of thing, I guess, is what, as a former distributor, I would be
16216 MR. TEMPLE: I will answer that in two
16217 One is we fully expect that distributors will
be able to offer transaction services and for that they should be, you know,
compensated appropriately. But when you look at a -- we are applying for a
digital interactive service, and if you look right now, we already provide
transactional ourselves and probably most broadcasters and specialty services
today offer, say, per inquiry. Now, we don't share that with
16218 In the analog world we are providing a
transactional base advertising. We get compensated for it. So now we move to the
digital world, and we are going to provide the same type of transactional
opportunity. You click on this, get that, order, whatever it happens to be. So
we said, okay, well, let's look at what's involved.
16219 First of all, all the content is our cost. We
are not asking the distributor to provide the fulfilment. When you click on that
button and order a ticket, there is no real burden placed at all on the
distributor. They don't have to buy extra equipment. There is no taxing of
bandwidth. I mean, a click to buy a ticket uses less bandwidth than, you know,
downloading another page or ordering the second camera view on a sports
programming. That would order --
16220 COMMISSIONER WILLIAMS: Would that not need a
box capable of accepting that click, though?
16221 MR. TEMPLE: They need that box that can send
that click, but that's already in place. If you have interactivity, you have in
place already everything you need.
16222 But if you think about the process, I'm
watching L-NET and I see something quite interesting on, say, the Monnet
exhibition in -- I think there is a Monnet exhibition in Ottawa right
16223 COMMISSIONER WILLIAMS: In one of the museums
in town, yes.
16224 MR. TEMPLE: I might say, oh, I want to see
some more about that, so I click --
16225 THE CHAIRPERSON: You want to buy one.
--- Laughter / Rires
16226 MR. TEMPLE: Well, I'm getting to that. So I
click and I say, oh, that's interesting; I want some more information. The cable
operator or the distributor, the DTH distributor, already has in place a
complete infrastructure for me -- assuming we have interactivity -- for me to
click. The message goes to our file server and we send that content back, so we
might give you a little more information about the exhibit, what the times
16227 Then you say, well, that's really neat. I
want to go. I'm going to order my ticket. That same process now of clicking and
ordering a ticket isn't using extra bandwidth. They don't have to put any
equipment, extra equipment in place. It's an integral part of the service we are
offering. We are responsible for that content. We are going to house that
content. It's our file server. You know, we have to get that back to the cable
16228 Ironically, in some of the correspondence
with the Commission on our condition of licence it was suggested that one option
might be to have a condition of licence based on our revenues. But included in
our revenues are commitments to -- included in our interactive revenues are a
commitment to spend on Canadian programming. So if we are going to get a couple
of bucks, by the time we pay for our file server, pay this, pay that, spend a
certain amount on Canadian programming, try and recover our costs, there isn't
an awful lot to go around.
16229 MR. PERRAULT: If I may, Commissioner
Williams, the set-top box, as we see it, is definitely an interactive device.
The operator, it might be a DTH, MMDS or cable operator, will derive significant
benefits of deploying this technology.
16230 When we look at the experience worldwide of
deploying digital technology with multiplex pay services, for example, the
subscription to pay services goes up dramatically.
16231 The set-top box, the digital set-top box will
offer the possibility of instant video on demand. So, therefore, it is expected
that the buy rates of movies on video on demand would also go up significantly.
So, therefore, there are revenues immediately derived from this technology for
16232 On the other hand, also the operator will
have its own wall garden whereby he will be able to generate advertising
revenues or transactional revenues from the specific site that is his own
16233 MR. MORRISSETTE: If I could maybe just add a
16234 COMMISSIONER WILLIAMS: Sure.
16235 MR. MORRISSETTE: Our application encompasses
the full package, the core television services and supplemented or complemented
by the enhanced interactive television capability. That is the licence that we
are seeking. Therefore, as we have developed our business plans, we have
assumed, for instance, that the advertising revenues derived from the enhanced
interactive television capability qualify for us calculating our Canadian
16236 When we develop the criteria for the
categories of programming that we will be displaying on the air, we have used
the same assumptions to apply in our interactive enhanced television programming
service as well.
16237 So everything that we have done essentially
views the two components of basic linear television and the interactive
component to be a full integrated package.
16238 COMMISSIONER WILLIAMS: Okay, I understand
what you have all said.
16239 Earlier in the hearing one of the DTH
distributors, when discussing the types of set-top boxes they have today and
they hope to have a few months or years out, kind of described what they have
now because of the fact that they are using satellite distribution technology,
and in their case the data would be all stored on the box in order to achieve
the full interactivity. So in that example, I guess, they would have a larger
investment in the box, would be my guess, than what you have described in your
16240 MR. MORRISSETTE: I will ask Jean-Pierre
Boulanger, our Senior Vice-President, Technology, to comment on
16241 COMMISSIONER WILLIAMS: Thank
16242 MR. BOULANGER: The set-top box used on the
digital, for the DTH as an example, most of them rely on the fact that when you
tune a channel you will receive for that channel the data that goes with it.
It's clear that you have memory there that needs to retain that. But most of
them will erase that when you go to another channel.
16243 In fact, if implemented that way, there is
not a real addition there. There are tricks technically that need to be done to
be able to accommodate a fancy product. If they do install a box with a hard
disk and then they intend to say that all the contents will be resident there,
that is basically a no-win situation because there will never be enough space
there to maintain all the interactive contents for all the potential channels
that can be on that box. Not only that, if you have a rapid pace channel you
will need to update that information relatively fast too.
16244 COMMISSIONER WILLIAMS: Okay. Thank you for
16245 If the Commission were to agree -- and
this is similar to what Chair Wylie was speaking of earlier -- with the
proposed deadline for concluding negotiations, what if that was a condition for
obtaining the green light for a launch? Like if you get your negotiations done
by a certain period of time you are prepared to -- you have received
permission to launch, it is your final hurdle. If the Commission was to take a
view like that, would that then not let the marketplace decide this issue for
16246 MR. MORRISSETTE: What do you mean by "this
16247 COMMISSIONER WILLIAMS: Well, the issue of
getting negotiations concluded prior to a launch, or well in advance of a
launch, so it is easier for both sides to do their business
16248 MR. MORRISSETTE: Well, there is no question
it will provide a strong incentive, however ultimately affiliation agreement
negotiations can become somewhat complex, particularly as we are contemplating a
new technology, a new mode of distribution for which there are quite a few
uncertainties and for which we have to anticipate the long-term evolution of
these programming services and the uncertainties that relate to
16249 So I guess the whole bottom line to that
question is no question with an open-minded and a willingness to arrive at a
balanced win-win agreement that favours distributors and the programming
services that are going to be carried, that that kind of goodwill would result
in a rapid result. I guess, you know, some of the history in the past may pose a
little bit of uncertainty in terms of that happening.
16250 Having said that, I mean we are entering into
this process, number one, committed to doing everything within our power to
ensure a clear participation in a September 1 launch. We as a company have a
track record of always seeking out the win-win scenario.
16251 You know, the whole Canadian broadcasting
system has been so successful because of the balance that has existed in this
system throughout the last several decades and we don't see why this should
change overnight in a digital world.
16252 So, having said that, bottom line is we are
committed to that. We are going to sit down and negotiate affiliation agreements
with everybody in good faith, seeking a win-win situation and, hopefully, that
is the mood that prevails with all other services launched and with all
distributors that are going to carry those services.
16253 COMMISSIONER WILLIAMS: Yes, I agree with the
notion that any deal that will stand the test of time has to be a win-win and I
wish all the Category 1s and all the distributors have an opportunity to
reach those kinds of deals well in advance of a launch.
16254 Thank you, Madam Chair.
16255 THE CHAIRPERSON: Mr. Morrissette, do you
think that the fact that one launcher can be played against the other and this
coming launch will give a certain element of leverage? By that I mean, unlike
the analog world the digital world has currently more comparable forces in
digital because we have DTH and MMDS in the market which is closer to the number
of cable digital subscribers.
16256 MR. MORRISSETTE: I think that that would
contribute to providing a strong incentive for everybody to seek a favourable
resolution to those types of negotiations.
16257 It is obvious that everybody, whether it is
the combined programming services who are going to be investing significant
amounts to achieve successful launches and the distributors who will also have
tremendous amounts of investments at stake, that there is an awful lot at stake
here. There would be nothing worse than a launch, which is so critical to do it
right and successfully off the bat, to create a momentum in terms of creating
that demand for the package of services that are available. The last thing you
want to do is to disrupt that kind of momentum by creating, you know, negative
press, or what have you, in terms of any issues that may arise.
16258 So it has to be in a goodwill sense of
fairness and responsibility to everybody in concert, in partnership virtually,
to make this evolve in an orderly and successful way. Everybody
16259 THE CHAIRPERSON: I would add to that a dash
of negotiating cleverness.
16260 MR. MORRISSETTE: I agree with that. We are
fortunate in our company that we are one of the most widely distributed services
in Canada. We have 9.5 million homes in distributing our existing services.
We believe that we have enjoyed very positive and strong relationships with all
the distributors that carry our services and in co-operative initiatives in
marketing and what have you.
16261 So given our particular track record and
experience, I think we have -- and because we have, you know, strong
relationships with these people who we view as partners and, as I said before,
we have a sense of independence and we sit down with everybody and discuss with
everybody in the same terms and what you see is what you get and the end result
has been very successful in that regard for us. We would like to carry on that
whole spirit because that is what we are all about.
16262 THE CHAIRPERSON: Yes, and in this case
everyone agrees that a common launch is important which will require cooperation
as between the various program undertakings and the distributors as well so that
a common goal is pursued.
16264 MR. McCALLUM: With respect to descriptive
video services, you will be technically equipped to distribute these if you
should be licensed.
16265 MS VJESSKA: Yes, we will.
16266 MR. McCALLUM: With respect to filler
programming, you would redistribute the time allocated to that to the other
categories, as all the other applicants agreed to do.
16267 MS VJESSKA: I'm sorry, can you reword that?
16268 MR. McCALLUM: With respect to filler
programming, you would redistribute it to the other categories.
16269 MS VJESSKA: Yes, we do.
16270 MR. McCALLUM: And with the new Personal
Information Protection and Electronic Documents Act, obviously you would be in
compliance with that Act or take efforts to be in compliance with that
16271 MR. MORRISSETTE: We are committed to that,
16272 MR. McCALLUM: Thank you. In your letter dated
15th of May you agreed to the Commission's formula on Canadian programming
expenditures. You agreed to the possibility of a condition of licence of 36 per
cent of the previous year's total advertising and subscription revenues. Do you
have any other comments after having listened to the hearing as to what that
formula should be, whether it should be imposed and whether alternative methods
should be put in other than what's in that letter?
16273 MR. TEMPLE: Sorry. Could you just repeat the
last, "where alternative" --
16274 MR. McCALLUM: Formulas or methods of imposing
16275 MR. TEMPLE: We are certainly obviously
prepared to stand by our response, the letter, which we would accept as a
condition of licence. I think there has been some discussion in terms of an
approach taken where it might be over the term of the licence. I mean that adds
a little bit more flexibility. You never want to say no to that. But we are
happy to stand by our response to the May 5 letter. If the Commission is to give
us a little more flexibility, we will gladly take it.
16276 One thing we would like to point out, as I
think I alluded to, is that in the calculations used by the Commission and in
our understanding, the calculation of revenues includes interactive advertising
revenues, so we just want to make that clear.
16277 I think the Commission cited, I think it was
$75 million. If you look at our application, within that $75 million is
interactive advertising revenues, which is consistent with our approach. We are
seeking a licence to provide an interactive service. Therefore, we expect the
content and the formulas to apply to the whole and not just the conventional
16278 Likewise, we assume that that would be the
basis that the Commission would treat all Category 1 licensees.
16279 MR. McCALLUM: Thank you. In respect of your
contribution to independent producers, I take it your commitment has been to
invest $10.7 million in independent Canadian production over the licence term. I
think that's at page 19 of your Schedule 1. If the Commission wished to impose
something along that commitment as a condition of licence, you would have no
difficulty with that.
16280 MR. TEMPLE: That's correct.
16281 MR. McCALLUM: Do you have any idea what
percentage of programming that amounts to?
16282 MR. TEMPLE: Yes. I want to make sure I have
the right number. That's a percentage of our Canadian programming. As a
percentage of our Canadian programming over the term of our licence, it's 50 per
cent for independent production.
16283 MR. McCALLUM: And if that were imposed as a
condition, obviously that would be satisfactory to yourselves.
16284 MR. TEMPLE: Yes. That's of exhibition. The 50
per cent is exhibition and we would have no problem with that as a condition of
16285 MR. McCALLUM: Thank you.
16286 Thank you, Madam Chair.
16287 THE CHAIRPERSON: Thank you.
16288 Mr. Morrissette, the last word is
16289 MR. MORRISSETTE: Thank you. Well, first of
all, we very much appreciate the opportunity to come before you today to I guess
initiate the process for one of the most exciting chapters in Canadian
16290 I guess the way we would like to wrap up is
to give you some compelling reasons as to why L-NET ought to be considered for a
licence as Category 1 service.
16291 The first reason is the attractiveness of the
L-NET service. It will meet a real need of the Canadian public. We are not just
a travel service. We encompass leisure activities coast to coast in all regions
of Canada. Hence, we are a much broader appeal as a service.
16292 Most of the travel that takes place within
this country, as we indicated earlier, is within the one day trip from anyone's
home. Our focus is on Canada. What we are going to be talking about is a program
or a service, produced in Canada, using quality independent producers from coast
to coast, basically put together for the Canadian market coast to
16293 It fills a void. It's very different. It
definitely contributes to programming diversity.
16294 The second broad reason is that this service
as a multimedia information service represents an ideal application for
interactivity. It's an ideal content for viewers to personalize their
information on demand, which is what interactivity is all about. Interactive
content sure will evolve in stages, but we are ready now to broadcast for the
ultimate stage. We are waiting anxiously for that stage.
16295 In the meantime, we are going to play a role
which we hope will be a leading role in making this happen.
16296 The third point I would like to address is
Pemorex as an independent player in the broadcast system. We are proud of that
status. We don't have any conflicts. We are very focused as a company. In fact,
our entire strategy emphasizes focus.
16297 We want to be the best at what we do. We
don't want to spread ourselves too thin across a whole bunch of different
businesses that we don't know very much about. We know what we are good at it
and we want to stick to our knitting and continue to create success stories in
16298 We filed only one application today. That's
because we used the rifle approach as opposed to a shotgun approach. We have
been working on our strategic plan. We update it every year. We know where we
want to be down the road. For us, a service such as L-NET is complementary. It's
a natural extension of what to do. It builds on what we are all about. It takes
advantage of everything that we are good at.
16299 There are very attractive synergies and
benefits in terms of continuing to evolve as a leading player in multimedia
information services in Canada. Not only that, one of the things that we do best
and what interactive requires is a strong sense of innovation and creativity,
not just in programming, which is the core of our business obviously, we are a
content business, but it's in developing technology, not just buying off the
shelf, but in developing technology to basically contribute to the
implementation of our strategy over time.
16300 The fourth point I would like to leave you
with is our track record. We are not an upstart new company. There's nothing
wrong with that because even the biggest players in this system today once upon
a time were small.
16301 What we are today is we are a financially
strong and rapidly growing medium size company in Canada. We have ambitious
plans. You know, there's no question we want to grow, but we want to do it in an
orderly way, one that sticks to our strategy, that sticks to our
16302 We turn down so many opportunities that come
our way because it's off strategy. For us, we have that discipline of saying
16303 The bottom line is we have just not developed
two of the most attractive specialty and successful specialty services in
Canada. We have not just developed two of the most successful Web sites in this
country, but we have been able to do that because we are strong in programming,
we are strong in marketing, we are strong in sales, but what sets us apart is
our unique strength in applying technology.
16304 In conclusion, we seek an opportunity to
create another success story. Given the chance, we will deliver
16305 Thank you very much.
16306 THE CHAIRPERSON: Thank you,
Mr. Morrissette and your colleagues, for your presentation and
clarification of your application. We will see you again.
16307 MR. MORRISSETTE: Thank you.
16308 THE CHAIRPERSON: We will now take a 15 minute
break and then hear the last application for today by the New Day
16309 Nous reviendrons dans 15 minutes.
--- Upon recessing at 1535 / Suspension à 1535
--- Upon resuming at 1556 / Reprise à 1556
16310 THE CHAIRPERSON: Good afternoon to you, and
rebienvenue à ceux qui étaient déjà là.
16311 Monsieur le Secrétaire, s'il vous plaît. Mr.
16312 Thank you, Madam Chair.
16313 We will now hear an application by New Day
Ministries Inc., for a new Category 1 special service to be called
16314 There is a maximum time of 20 minutes allowed
for the presentation and we have Mr. Willard Thiessen and his colleagues.
PRESENTATION / PRÉSENTATION
16315 MR. W. THIESSEN: Good afternoon, Madam Chair,
16316 My name is Willard Thiessen. I am President
of New Day Ministries Inc. It is my pleasure to present to you our application
for IntuneTV, a western-based digital specialty service to be dedicated to music
programming in the contemporary Christian music genre, or CCM as it is more
16317 Before beginning the presentation of our
application, I would like to introduce the members of our panel. These are the
individuals who will make IntuneTV happen.
16318 On my far left is our Director of
Programming, David Mills. Dave's exhaustive knowledge of CCM and his
understanding of programming for this music market are the result of 13 years of
experience in radio, most recently including Winnipeg's first station dedicated
to the CCM genre.
16319 Next to Dave is IntuneTV's General Manager,
Jeff Thiessen. Jeff and his team have developed this application and he will
field your questions at the conclusion of our opening remarks.
16320 Next to Jeff is John Reimer-Epp, Director of
Regulatory Affairs for New Day Ministries and Trinity Television
16321 Next to John is Kevin Dunn, Director of
Production and Marketing. Kevin is presently Executive Producer and Director of
Marketing for Mid-Canada Productions Inc., Manitoba's leading independent
production house. He has also spent many years in marketing with Craig
16322 In the second row, starting on my far left is
Nancy Donnelly representing CHRI-FM in the local Ottawa area. CHRI is one of the
growing number of radio stations that the Commission has licensed in the CCM
genre over the last several years.
16323 Next to Nancy is IntuneTV's Director of Brand
Development, Tim Kroeker. Tim brings 16 years of experience as a marketing
consultant and is a founding partner of Brown Communications
16324 Next to Tim is Mark Durst, who is a Chartered
Accountant, the President of Patriot Computers Inc., and our valued financial
16325 Next to Mark is our Broadcast Consultant,
Gerry Tymon. In Gerry's 30 years of broadcast marketing experience, he has been
responsible for the development and management of advertising sales and
marketing organizations for specialty channels in each tier of the evolving
Canadian specialty environment, including TSN, RDS, Discovery and Headline
16326 Directly behind me is Richard Edwards of
Edwards and Associates. Richard has lent his expertise and many years of
experience in the cable industry to our understanding of the emerging world of
16327 In the third row beginning on my far right is
Steve Rendall, President of Harvest Music Group. Steve has devoted 20 years to
the development of Canadian CCM artists and has produced almost 300 albums in
this genre. He has contributed to the virtually overnight success of a number of
Canadian Christian musicians in the United States which Steve signed with
American distributors including Reunion Records and Brentwood Records. For the
past two years, he has also been a jurist for the newly established gospel music
category of the Juno Awards.
16328 Next to Steve is Kathy Grant Mahon. Kathy is
a CCM recording artist, song-writer and free-lance writer for gospelcity.com and
several gospel music labels. She has been a performing musician since the age of
17 and her band, Chosen, performs in Ottawa on a regular basis.
16329 And finally Andrea Hallendy is a CCM singer
and songwriter known as Marika. She has been developing her niche in the
Canadian music scene for approximately 15 years and has been recording
Contemporary Christian music since 1995.
16330 Commissioners, we begin our presentation
hoping that throughout this process you will feel a passion emanating from this
group. I can tell you that a team of this calibre is here today for only one
reason: each of us is convinced that IntuneTV is among the very best of the many
alternatives that are before the Commission in this round of
16331 To this end, we will address the following
four points in the balance of our application.
16332 First, IntuneTV will be nothing like what you
may have expected. CCM is an exciting and dynamic musical genre and will support
a service that is very attractive to Canadian viewers.
16333 Second, the impact of IntuneTV on the
diversity of Canadian cultural expression will be at a level that is
unparalleled since the advent of MuchMusic and will allow Canadians to create a
new dynamic and competitive world-class industry.
16334 Third, there are very significant numbers of
Canadians who eagerly want a service like IntuneTV and will pay to obtain
16335 Fourth, our business plan is conservative,
attainable and worthy of your confidence.
16336 We recognize that you may have arrived at
this point in the hearing without a mental picture of what a Contemporary
Christian Music, CCM, service might look like. We hope that the following brief
video will help to communicate the reason for our enthusiasm for this
--- Video presentation / Présentation vidéo
16337 MR. MILLS: We believe that it is clear from
the video segments that you have just seen that IntuneTV will be a very
attractive addition to the Canadian digital television
16338 I personally made a transition to
Contemporary Christian Music about a year ago, after 13 years in the
mainstream radio industry. I can tell you that some of the most exciting
developments in the musical world right now are in the CCM
16339 Nevertheless, I can confirm what Malcolm Hunt
from CHVN said to you in the video; namely, that one of the most significant
challenges that we face in the world of CCM radio in Canada is that very few
Canadian listeners are familiar with our music.
16340 Here's the irony. According to Billboard
magazine, CCM is the fastest-growing segment of the American music industry. It
enjoys nearly one billion dollars in CD and video sales, is played by hundreds
of CCM radio stations, and has an annual international awards show. Despite
this, CCM is almost completely new to Canadian eyes and ears.
16341 Unfortunately, all of the videos that you saw
earlier were American, because that is where the television and radio
infrastructure has supported the development of quality in the
16342 In other genres, Canadian music channels are
justifiably proud of launching dozens of Canadian artists into international
stardom. They did it by putting the faces and the music of these artists in
front of millions of viewers over and over again. This exposure invariably leads
to CD and concert ticket sales, radio play, video production, and so on. It is a
very positive cycle that has created a truly significant
16343 Unfortunately, the list of Canadian CCM
videos to go into regular rotation on these services is virtually non-existent.
The fact is that good programming decisions dictate that existing music services
remain focused on their established niches. Since CCM falls completely outside
of the scope of their programming mandate, we inevitably have a serious problem
16344 MR. RENDALL: Fifteen years ago, I started a
small CCM record label in Alberta. What I discovered was that hard work and
great music could not overcome my limited access to radio or the then new
reality of music videos as a driver of music sales. So I began to work together
with American CCM labels which have the financing backing to help my artists to
reach their audience. This approach has been successful beyond all of my
16345 Unfortunately, my artists rarely have access
back into Canada to a Canadian audience.
16346 I cannot imagine an application that will
have a more dramatic impact on Canadian cultural diversity than IntuneTV will
have on the CCM industry. IntuneTV's resources will introduce a completely new
musical expression into the Canadian television system without overlap or
challenge to existing licences.
16347 You may ask if it is possible for Canadian
CCM artists to be successful in Canada. Although I am part of the pipeline
directing our best and brightest to American labels, my answer is "absolutely
16348 I firmly believe that the present trend can
be reversed, given access to the advantages available to musicians in other
genres. The alterative, frankly, is to lose these musicians either to obscurity
or else to the United States.
16349 In the long run, I believe that it is
inevitable that CCM fans in Canada will be served either by a Canadian specialty
service or by a proven American CCM service such as Paxnet. The Canadian market
is presently without meaningful competition and is therefore open to the first
major player to introduce CCM to the Canadian public. Given the success of CCM
in the U.S., this development cannot be long in the making.
16350 MS GRANT MAHON: I have been a
singer/songwriter in the CCM genre since I was 17, and I have been recording
since 1988. Together with my band, I consider myself lucky to be the only gospel
musician in Ottawa's dynamic gospel music scene with an opportunity to perform
regular weekly gigs.
16351 Exposure through music videos can change
everything in the music business. This type of exposure already exists in the
United States, and the industry there is booming as a result. I am reluctant to
make the move south, but I honestly see the only real possibility of reaching my
potential to be in the U.S. industry.
16352 The existence of IntuneTV would change my
outlook in Canada dramatically by giving me a profile with an audience across
the country. As an independent artist of limited means, the potential impact of
music videos on my career is dramatic.
16353 As a Canadian, I would love to help create a
unique national voice for CCM musicians.
16354 MS HALLENDY: Like most musicians, it is my
hope to one day make a living from my music here in Canada. In the meantime, I
continue to teach on a fulltime basis to pay my bills.
16355 Although my most recent recording has been
played on CCM stations, the most significant limitation that I face in reaching
my goal is the fact that my music is not at home on MuchMusic, MuchMoreMusic or
CMT. Consequently, I cannot realistically spend the money needed to make a music
video because I know it will never be seen.
16356 This is particularly hard because I tend to
write music with a mental picture of what the music video would be like.
IntuneTV's plans for investing in and, more importantly, airing music videos
would quite literally make a dream come true for me and for countless other
musicians in my genre.
16357 On behalf of every CCM artist that I know, I
urge you to grant this application.
16358 MR. KROEKER: IntuneTV will give Canadians
what our market research shows they really want. There are significant numbers
of Canadians who do not watch existing music channels because they feel that the
images and music they find there are inconsistent with their own personal
16359 In contrast, 81 per cent of Canadians had no
hesitation in saying that a Christian music service would be good for the
broadcasting system and for society as a whole, and virtually no one said that
they would be unhappy if IntuneTV were licensed. In fact, 36 per cent of those
who were not interested in watching the service themselves would like their
children or grandchildren to have access to IntuneTV.
16360 In this ready environment, IntuneTV will make
a strong contribution to the rollout of the digital box, both by motivating a
significant group of consumers who are willing to buy the service and by helping
to keep the overall cost of any package of services to a reasonable
16361 As a family oriented service, IntuneTV will
contribute to the broad attractiveness of the new digital package or packages,
which will likely include services targeted to more narrow micro-niche
16362 MR. DUNN: This service is by nature ideally
suited to interactivity. Our plans for building a Web site that is truly
integrated into every aspect of Intune's programming will begin immediately upon
receiving a licence, should you deem that so.
16363 Intune Online will embrace the second and
third generations of interactive digital television as these technologies become
16364 Our immediate goals are for IntuneTV's
viewers to be able to interact with artists during our live programming,
download music, offer streaming audio and video, search our CCM database for
information about music and the artist, chat with other fans, and buy CDs and
concert tickets online from a single, comprehensive Canadian
16365 We also look forward to becoming a focal
point for networking within the CCM industry by facilitating communication
between artists, distributors, producers and other members of the music
16366 Merchandising sales are a uniquely strong
opportunity for IntuneTV in an environment where an existing distribution of
Canadian CCM is limited. Using our Web site, in combination with the powerful
promotional potential of the television service, we expect that IntuneTV will
become the most effective means of distribution available to many of our
featured Canadian artists.
16367 We also expect that IntuneTV will very
quickly establish a presence for Canadian artists not only in Canada but also in
the United Stated and abroad. We are presently about to confirm an agreement
with the Sky Angel Network for distribution across the U.S. and internationally,
contingent upon approval of this application. The strong export potential of
this service will also result in distribution of Canadian CCM product outside
Canada. The Commission therefore, before it, has an opportunity to expand the
remarkable success of Canadian artists into a new corner of the musical
16368 MR. THIESSEN: Commissioners, this hearing
represents an extraordinary opportunity for Canadian viewers. It also represents
a significant opportunity for the Commission to shape our specialty television
16369 We responded to your call for applications,
knowing that all the major players in Canadian television would be here to ask
for one additional grant of regulatory protection before entering the less
regulated Category 2 environment. Despite the wealth of experience that the
members of this team collectively bring to this process, we recognize that we do
not bring you the comfort of a long broadcasting history. Nevertheless, we can
say to you with confidence that we can and will fulfil the commitments that we
have made to you and to the Canadian public in this application.
16370 In our view, what is needed in the Canadian
broadcasting system at this critical point in time is diversity, not only of
programming genres but also of ownership and control. A Category 1 licence is a
necessary tool to establish a new player in an entrenched industry. Our decision
to wade into this highly competitive hearing was made deliberately in the
expectation that the Commission might well find this to be a uniquely
appropriate opportunity to inject diversity into the bloodlines of Canadian
16371 We believe that the Canadian public will be
well served by a decision that favours diversity over the security of synergy.
Our program schedule does not contain a shred of repurposed material and our
programming concept is completely unique within the Canadian
16372 We are an independent western-based
broadcaster prepared to deliver a type of musical programming that reflects the
lifestyles, tastes and values of a significant but totally unrepresented segment
of Canadian television viewers. Almost two thousand interventions have
expressed the importance of this service to individuals across this
16373 Furthermore, as a registered charity and a
not-for-profit corporation, New Day Ministries is committed to returning all of
its revenues to music and production. As a result, the diversity which IntuneTV
offers to the broadcast system is meaningful at a very fundamental level. We are
in fact the only applicant that can say that we are in the business solely for
the good of the viewers and the music industry.
16374 Having said all of this, I want to be very
sure that we are not misunderstood. Clearly, the content of the application
should not take a back seat to ownership considerations. Far from it -- the
music content is the reason that we are passionate about this
16375 In conclusion, is IntuneTV an idea whose time
has come? Clearly, yes. Will it come again? Not for Canadians. We as a team are
ready, our facilities and financing are in place. Families across the country
are eagerly demanding musical alternatives, and the artists have been preparing
for this moment of opportunity all of their lives. For the Canadian CCM
industry, this application is the future -- the difference between everything
16376 This concludes our opening remarks, and we
would be pleased to answer any questions that you may have at this
16377 THE CHAIRPERSON: Thank you, Mr. Thiessen
and your colleagues.
16378 Like we have of all applications before us,
we want everybody to have the opportunity to tell us what criteria we should use
in licensing and what the order of priority is.
16379 You have already emphasized new blood, new
ownership but not at the expense of quality of programming and, from what I
gather from your comments, diversity. Do you have further comments to make about
the importance of the criteria we should use to guide ourselves in selecting
Category 1 licensees?
16380 MR. THIESSEN: I think what you have done in
the call is made it very clear that -- there are six points that you have listed
there and all six are incredibly important to this Canadian broadcasting
16381 We feel that IntuneTV fits in into each one
of those categories very well. We also believe that if you are going to choose
any one of the six, and you say "Pick one which just really exemplifies exactly
what we would be doing for the Canadian broadcasting system", even though we fit
into -- I think we maximize all six of them, but I think if we choose one it
would be the contribution to programming diversity.
16382 Our station is going to be very unique and
very different and offer something that no one has ever done before and a really
great alternative and be a pleasure to serve the Canadian people
16383 THE CHAIRPERSON: Before discussing your views
on implementation dates and the way in which a launch can be achieved to the
greatest benefit of all, since you have identified diversity as the most
important criterion, it's very important for us to understand what it is that
your service will be. One way of doing that is to ask applicants to identify the
categories of programming from which their programming will be
16384 You have identified, in that section of the
application at 7.1, only three categories, yet when we look at your Schedule 10
where programming is actually described there appears to be some programming
that would not fit within 8(a), (b) or (c). For example, I'm looking at page 9
of your Schedule 1 where you talk about filler programming concepts which may be
part of the programming.
16385 Also, if you look at your Schedule 10 where
the programming is described, there appear to be programming concepts there that
are not music videos and therefore would be hard to fit within music and dance,
music video clips and music video programming.
16386 Do you have any comments as to whether
further categories are necessary to really identify the nature of the
16387 MR. THIESSEN: Well, we do, in our
Schedule 1, and I apologize for this -- we put in that word "filler" which
we were wanting to -- it's sort of a little bit of a bad word I guess at this
16388 THE CHAIRPERSON: Well, no, no. Interestingly,
you say you will have filler programming, both in the page I was looking at and
in a description of your programs, and yet you haven't indicated a desire for
16389 What we have heard to date is people putting
in filler programming and seemingly having no intention of having filler
programming or being quite prepared or understood that it was to be categorized
for whatever it was when it was used.
16390 So I'm a bit puzzled about the fact that you
haven't checked that box and yet you do talk about filler programming; and,
secondly, is it because you are going to categorize it under the other
categories, which is what we have discussed with applicants?
16391 Secondly, for example, when I look at program
concepts, you have descriptions such as:
"Artist focus acquired or produced featuring one particular artist: An
in-depth profile of the artist from a personal point of view. Included are music
videos and concert footage."
16392 But I expect that not all of it will be music
videos but some of it will be programming that ought to be identified perhaps
under some other category.
16393 Are you going to have this type of program
which will be other than music videos, and what category should it be in if
there is such programming?
16394 MR. THIESSEN: Firstly, with the description
of filler programming, that word really is a misnomer because really we are not
talking about filling up as other applicants have done. We are looking at these
fillers actually creating opportunities to discuss the programming, the music.
So what I'm going to do is ask Dave, our programming manager, to talk about the
program itself and what you were just asking.
16395 THE CHAIRPERSON: Okay. So perhaps we should
make sure we understand.
16396 There is nothing wrong with filler
programming, but with specialty services, the Commission, unless someone can
convince us to the contrary in a particular application, wants it categorized
under "Other categories", so we understand that.
16397 But this type of programming, which would be
more an artist profile, interviews, et cetera, do not fit under Category 8, so
what would they fit under when you categorize it, whether it's filler or longer
or -- it's even more difficult if its longer because then some categories
16398 MR. REIMER-EPP: Commissioner, if I may
address that issue briefly, before Dave does.
16399 Just to be very clear that all of the
programming that you mentioned out of Schedule 10 and that we have talked
about in Schedule 1 is to be understood to be directly related to the music
content and, as such, when looking at Category 8 it appears, at least to
us, that it would fall into the discussion by VJs for example, or by a host
about programming elements or about the artist, things of that
16400 So we are not talking about programs that
would in themselves be not devoted to music. This is simply information to make
the music more interesting, so to speak, to give it a face and a name, but it is
not intended to fall outside of the music programming itself out of
16401 THE CHAIRPERSON: It would serve more as a
16402 MR. REIMER-EPP: That's exactly
16403 THE CHAIRPERSON: -- between the two. And none
of them, for example, would be long enough to be documentaries or even analysis
16404 MR. REIMER-EPP: Absolutely not,
16405 THE CHAIRPERSON: Which leads me to perhaps
address it in another way.
16406 What proportion of the schedule would be
dedicated to music videos in the manner in which we understand music videos? I
suspect if I went to the regulations I would find a description, which you
should be familiar with, so what proportion would be music videos as described
in the Commission's categories?
16407 MR. J. THIESSEN: We have 50 per cent
which would be music videos. Then there would be about 40 per cent which
would be concerts and such wrapped around the music videos and EPKs and BTS,
which is electronic press kits and behind the scenes things, as MuchMusic does
right now, or other music services. And then there is about 10 per cent
where VJs would tie this in.
16408 But Dave here is probably very good at
explaining how the program would actually look.
16409 THE CHAIRPERSON: You mentioned MuchMusic.
They do have a requirement to have a certain percentage of music videos, so that
is one of the reasons why I ask you.
16410 So you say 50 per cent would be music
videos as described and 50 per cent would fall under music and dance other
than video clips and music video programs and also music video
16411 MR. REIMER-EPP: Yes, that is
16412 THE CHAIRPERSON: So it would be a 50/50
16413 MR. REIMER-EPP: Correct.
16414 THE CHAIRPERSON: Go ahead, if you have
something to add.
16415 MR. MILLS: Thank you, Madam
16416 I think I wanted to get back to the word
"filler" that has caused kind of some confusion here. I would rather -- I
think it more aptly would be called, in our purpose here, foreground or
enrichment that would be strategically designed to connect the viewing audience
with relatively unknown Canadian artists.
16417 The concepts that we wanted to incorporate,
as Jeff had mentioned, were electronic press kits, behind the scenes footage,
bios, biography backgrounds within 5 to 10 minute segments, either tying
one video to another or giving background on the videos
16418 THE CHAIRPERSON: They would be linkages
outside of music videos and probably would lead themselves to concerts as well,
introductions or speaking to artists, et cetera.
16419 MR. MILLS: Absolutely.
16420 THE CHAIRPERSON: So 50/50 would be the
difference between music videos as such and the rest of the programming, and the
rest of the programming would all be fitted -- could be fitted under
Category 8 solely.
16421 Have you thought of whether you would be
spreading the airing of your videos throughout the day, especially the Canadian
ones, or do you have --
16422 MR. J. THIESSEN: As David has -- I'm
16423 THE CHAIRPERSON: Yes?
16424 MR. J. THIESSEN: Well, one of the things that
we want to do is create a place for our Canadian artists so it is not going to
be like putting all the Canadian artists in one little place and then running
the Americans throughout the rest of the time. We are going to be interspersing
the Canadian videos throughout the entire program schedule, having concerts
being played throughout that time as well, and have an opportunity for the
Canadian artists to get their faces in front of the Canadian
16425 One of the difficulties we have in Canada is
the regional problem. You can be an artist in the B.C. area and not ever get a
chance to get into the Maritimes. You can have somebody who is really
well-known, somebody like Steve Bell, who has to literally -- it's easier
for him to go to the States than to go to another place in
16426 So in terms of geography, it is one of the
tough parts of being in Canada is you have to be able to get to the next town
and get to the next place. Where I live in Manitoba it is a long way between
16427 MR. MILLS: If I could just address your
question there in regards to playing certain amounts of Canadian content during
different parts of the day, and I'm guessing that I can allude to what you are
16428 Over years and years in mainstream radio I
know there has been a practice of almost treating Canadian content like your
ugly kid sister and hiding it in the less listened to formats of the day. The
beautiful thing about what we want to do is completely the opposite. We want to
spotlight our Canadian artists, which would absolutely mean giving them fair
coverage throughout the broadcast day.
16429 THE CHAIRPERSON: Before going into more
specific questions on Canadian content expenditures and Canadian exhibition to
perhaps round out a better feeling for what the sound or the look of the service
would be, you say that it won't be based on a programming wheel and repeated
three times or, in some cases it's twice.
16430 But I'm looking at your application at
Schedule 10 where you talk about three main programming blocks for the
typical day with music mixes that appeal to the demographics of the time period
and blocks will include five to 15-minute pre-produced segments providing
information of interest to the respective demographics. How different would that
be from a wheel?
16431 MR. J. THIESSEN: Unlike a traditional wheel,
what we are talking about here is we are using video servers. So we can actually
use the technology to intersperse the things instead of just saying "This is
going to be the tape for the day" and play it. We can choose whatever clip we
want and make it unique, make that whole block unique each day. Even though it
has a tendency to look like the same kind of format or the same kind of
demographics we will be shooting for, it will actually be different. We can
reprogram that wheel.
16432 THE CHAIRPERSON: And it would be based on
your expected viewership at that time?
16433 MR. J. THIESSEN: Yes. We would want to make
sure that we would go right after the audience. We are looking at most capable
or able to watch the program at that time.
16434 THE CHAIRPERSON: I take it that what you are
saying with regard to video servers is because the blocks are shorter you have
even more room to do this than some other genre who program, let's say,
long-form documentary who wouldn't have the same flexibility.
16435 MR. J. THIESSEN: Is the
16436 THE CHAIRPERSON: So here you can mix and
match and repeat, which will lead to how much repetition, for example, of
Canadian music videos?
16437 What would be a repeat
16438 MR. J. THIESSEN: Well, our repeat factor is
going to be quite large for the first year just because we are actually creating
this new industry.
16439 But the wonderful thing about the repeat
factor is, with music it is very different than other specialty channels or
other kinds of programming. A music channel -- music, the more people watch
it, the more people see that same face, the more they like that music. So the
repeat factor actually works in our favour in music. When you take a look at the
heavy rotation that other music services have, they sort of feature a particular
artist or whatever is the current hot one at the time.
16440 Maybe I could ask Dave to respond to it
because of his radio background.
16441 THE CHAIRPERSON: Yes. I was just going to
say, in that regard it is closer to radio --
16442 MR. MILLS: Exactly.
16443 THE CHAIRPERSON: -- where repeat is a
positive, not a negative.
16444 MR. MILLS: Exactly. It's a positive rather
than a negative. Even the BBM ratings have been based largely due on the
statistic that the average radio listener listens 15 minutes at a time through
the day and, you know, one of the big complaints in my past experience in CHR
Radio, which is very oriented on a repeat factor, is playing the same songs over
and over. However, those are not your average listeners.
16445 The reason, though, for higher repetition is
so that your average listener can be almost assured that if they are going to
listen for any segment of time during the day, they are going to hear their
16446 THE CHAIRPERSON: So to complete the nature of
service at this initial level, it will be all music and even the spoken word
will be announcement links to the music and 50 per cent videos, 50 per
cent concerts, and we can go back to the Canadian content and the difficulty of
reaching your goal in the first year.
16447 Everyone has been asked to comment on the
need in this new environment to put a deadline time at which your service has to
be implemented. Do you see this as a necessity as well?
16448 MR. J. THIESSEN: I think the industry is
clear and I think we will be very clear. It is absolutely essential for the
industry to roll this thing out together as a package.
16449 It is essential for us to be part of that and
we have every indication that we not only want to, we are ready as soon as you
give us our licence to go ahead with getting this service ready to launch at the
same time or before the others, but we will use everything we can to drive this
box and to be part of the industry in launching this service together rather
16450 THE CHAIRPERSON: So you would see both as
necessary then, a launch together which hopefully the industry will achieve, but
the other part of the question is whether this launch can be postponed for 18
months, two years, or whether the Commission should require that whoever
launches has to do it within a certain period of time if we want to get digital
16451 MR. J. THIESSEN: We want to have the service
happen right away. We would be very delighted if the Commission would impose on
the BDUs and every other applicant that would be successful.
16452 THE CHAIRPERSON: Yes, as long as you
understand there are two things here. One is to say to everybody, as we have in
the past, you must launch within 12 months or the authorization lapses. The
other is the more complicated suggestion, that the Commission impose a launch
that everyone has to do it at the same time.
16453 Some applicants have told us they will be
ready in six months, others in 12, so there are two questions here. You would
want both to be imposed.
16454 MR. J. THIESSEN: Yes, we
16455 THE CHAIRPERSON: And one is not difficult for
us to impose. We have had lots of practice. The other is more difficult to
16456 Independent production. The question that
arises immediately, of course, is the connection to Trinity. I see in your
application at page 30 of your Schedule 1 that the service would be co-located
with Trinity Production.
16457 MR. J. THIESSEN: Yes, it would. The service
would be located in Winnipeg. It will utilize the uplink facilities over at WTN,
but the service itself would be renting space from Trinity
16458 THE CHAIRPERSON: And you have made
commitments to the independent production community of $9 million over seven
years to produce 450 videos. As soon as we make commitments to independent
producers, then the question arises as to how one defines an independent
producer. Have you given that some thought?
16459 MR. J. THIESSEN: Trinity Television until
very recently was an independent producer for many years, so we have got a lot
of experience in that one. We would --
16460 THE CHAIRPERSON: And how does one lose that?
How do you lose that characterization of not being an independent producer any
16461 MR. J. THIESSEN: Well, now Trinity Television
is a broadcaster, so that is no longer part of -- we are now separate
and we understand that relationship.
16462 What I would like to just put on the record
is that we feel very strongly about independent production. Our goal for this
service would be to provide a great opportunity for the independent production
sector to have an opportunity to produce programming. We think it should be
arm's length and it should be absolutely separate, a separate
16463 As Trinity Television, we would not be
utilizing their services for doing the production part of this stuff. It would
be through independent production companies.
16464 THE CHAIRPERSON: So any connection as between
the two of you eliminates the possibility of counting that company as an
independent producer vis-à-vis the licensee.
16465 MR. J. THIESSEN: Correct.
16466 MR. REIMER-EPP: I believe that there has been
some discussion over the course of the last week on independent and then really
independent. We would be going for the latter variety where we are not
anticipating any ownership in a so-called independent producer. I have forgotten
the exact terminology that was being used, but that's really the nature of what
we are talking about when we say independent production in the
16467 THE CHAIRPERSON: So I would conclude from
that that Trinity would not be the producer of any of these
16468 MR. REIMER-EPP: That's
16469 THE CHAIRPERSON: Would Trinity produce any
other programming or would you use synergies between them for the programming
that would be perhaps that filler programming or those interviews or VJ
16470 MR. J. THIESSEN: We have -- because
we would be sharing the same building, there will obviously be some sharing of
equipment and people and resources, just as it would with the radio station
that's located there.
16471 The synergies there, just because we have got
a building which can facilitate other things and new things, and that's to us a
great synergy aspect of having it located in our building -- the real
thing that we are excited about is that Trinity Television will not be producing
programs. There will be no Trinity Television programs put on there at
16472 We have as New Day
Industries -- IntuneTV has its own set of cameras and VTRs and
everything else so it's separate from, but if there is a need to share, we will
be sharing, but it won't be on a cost basis.
16473 THE CHAIRPERSON: Can you explain to me what
expenditures will be necessary for the concerts. There's $2.6 million over seven
years for 350 concerts. What will that include? Will you actually hire a
producer to do that or will inhouse facilities and staff be used for the
production of concerts?
16474 MR. J. THIESSEN: I'm going to ask Kevin Dunn
to answer that. He's our guy who is into independent production.
16475 MR. DUNN: Thank you. We have talked about
$2.6 million over seven years, we have talked about 350 concerts during that
time. These would be all Canadian all CCM related concerns.
16476 Let's talk about year one for a second just
to see where we are going in year one. These 52 concerts that we are talking
about, these would be Intune coffee-house concerts independently produced where
we would, Intune, license -- give a licence fee to an independent
producer to produce those for us.
16477 If there were to be an additional
10 concerts, they would be held on location across the country and a higher
licence fee would be given to those producers again for those. In year one,
actually we are looking at 62 concerts.
16478 We are offering generous licence fees, but
they would also trigger other funding mechanisms which we hope the independent
producer would bring to the table.
16479 THE CHAIRPERSON: Of that $2.6 million,
what would flow to independent producers over and above the $9 million for the
450 videos, approximately? Is that --
16480 MR. J. THIESSEN: All of the production costs.
If it would be any part of the facility cost, it would be taken out from that.
They will have to --
16481 THE CHAIRPERSON: Everything else would flow
to independent producers over and above the $9 million we were discussing
16482 MR. J. THIESSEN: Yes.
16483 THE CHAIRPERSON: Now, before going into
Canadian content exhibition hours and expenditures, the flip side of what you
feel is the most important criterion, as I understood it, which is diversity, is
competitiveness, of course.
16484 How would we fence in the genre and prevent
crossover with existing music video services or even some that have applied to
16485 MR. REIMER-EPP: If I can address that
question. Enter the -- at the moment there is no service which is
licensed or playing Category 35. Now we are using a radio regulation there to
define it. That is not something which is presently appearing at all or at least
to a very nominal extent.
16486 We are perfectly content and in fact would
ask for a condition of licence that we remain in that genre.
16487 THE CHAIRPERSON: Only.
16488 MR. REIMER-EPP: Yes.
16489 THE CHAIRPERSON: Exclusively.
16490 MR. REIMER-EPP: Exclusively,
16491 THE CHAIRPERSON: Sub-category 35 as defined
in the radio regulation --
16492 MR. REIMER-EPP: Correct.
16493 THE CHAIRPERSON: -- which could be imported
into your specialty service. That would fence in the genre and ensure diversity
by preventing competition with existing or services that have been applied
16494 MR. REIMER-EPP: Correct. Yes.
16495 THE CHAIRPERSON: Now, Canadian content
exhibition, you had from 40 in the first year to 60 per cent and, of course,
because you are a video service, you have 20 per cent to 60 per cent of the
16496 You also have no foreign programming
expenses. So you are going to get presumably some U.S. or other country music
videos for free, possibly concerts as well?
16497 MR. J. THIESSEN: I believe that there would
be some concerts that you would provide us as well.
16498 Steve is a guy who is very involved in the
record production and all of the music industry from the American side of it
because he has been involved with signing Canadian artists with the Americans.
Maybe, Steve, I can get you to comment.
16499 THE CHAIRPERSON: Perhaps I can be more
specific by telling you what my question is. I would like to understand, with no
expenses for foreign programming, with what you explain as an absolute dearth of
Contemporary Christian Music videos already on the shelve, and the fact that you
will produce 30 in year one, I wonder how this Canadian content will be achieved
at 40 per cent.
16500 MR. J. THIESSEN: I am going to get John to
actually describe what the exact way, but what I guess we would like to say is
that there is obviously a lot of American content. There is no problem there,
there is no problem with Australian content and U.K. content. The record
companies and the record organizations, the industry will actually provide us
16501 But what this service is all about is finding
a way to do something for Canadians. The U.S. guys, they have that. We are not
interested in helping them as much as we are interested in helping Canadians do
it here. So what we are planning on doing is, although creating 32 videos sounds
like almost nothing, we actually are able to create quite a bit more, if you
take a look at some of the ways we are going to do it with
16502 Actually, before I get John to maybe talk
about that, I would like to have Kevin describe exactly our plan for production
because that to us is the exciting part for getting these independent producers
really making a new industry here.
16504 MR. DUNN: Well, I guess it would be a good
time to maybe go into our pre-launch strategy to show you how we are going to
build this infrastructure before sign out. Would this be an appropriate
16505 THE CHAIRPERSON: Yes, but what I want you to
relate it to is to look at year one and say during the 18 hours you will have 40
per cent Canadian content and from six to midnight you will have 40 per cent and
the programming overall, if I understood earlier, will be 50 per cent music
videos of which 20 per cent only is the first year will be
16506 So 20 per cent of 50 per cent of the
programming will be Canadian. So then you have to have quite a bit of other
programming, concerts or whatever, to reach 40 per cent from 6 to 12 and all
day. I want you to relate it to what it's going to look like. Of course, there
will be repeats, et cetera, but to reach these goals in the first
16507 MR. REIMER-EPP: Madam Chair, I can tell you
that we were in the preparation of this application very aware of this exact
problem and spent a good deal of time working out what kind of production levels
would be necessary to meet the requirements that we have given you in Section
7(4). They are achievable based on a split between the videos and concerts and,
as Kevin will tell you, concert footage turned into concert
16508 You can in this particular business make a
lot of -- I will use the word "milage" although it's not exactly
right -- from one performance. And that is how we intend to meet the
Canadian content that we have committed to. We have been deliberately realistic
in setting the levels that we intend to achieve, but very clearly our goal over
the licence term is to maximize the Canadian content on the
16509 I don't know if that does answer your
question, but because the music video content is low, the concert content will
be a significant portion of Canadian content overall, and will in itself
spin-off additional videos into the concert video segment.
16510 THE CHAIRPERSON: It's an understanding that
music videos can be repeated. I suppose that's one way of reaching it, but not
to the point -- there must be a saturation point where it's
counterproductive to repeat too often.
16511 MR. REIMER-EPP: Certainly,
16512 MR. J. THIESSEN: I think many Canadian
artists who right now don't have that service, they are looking forward to an
opportunity to be seen and we are going to give them an opportunity to be
16513 Dave, do you want to add to that as
16514 MR. MILLS: Well, I just wanted to clarify the
strategy of taking a concert and, as John was describing -- I think he used
the word "milage", getting more milage out of a concert. We can take, I would
say, a dozen to two dozen songs that are performed in this particular concert.
That is potentially a dozen to two dozen videos available for
16515 Of course, by the nature of the very genre or
the format, there will be a repeat factor, but with the increase in concert
footage, obviously, we can keep that repeat factor to a minimum.
16516 THE CHAIRPERSON: That leads us to Canadian
content expenditures. There is a discrepancy between your comment in your
supplementary brief, in the executive summary I believe -- yes, on
page 2 -- at point 10 you say that you will spend a total of over $19
million on Canadian program production and acquisition over the seven years. But
if I look at your actual breakdown in 8.2 -- does that sound familiar to
you, where you breakdown the expenses -- we only arrive at some $18
million -- point two, I think, when we look at the line for total Canadian
16517 MR. J. THIESSEN: That may end up being the
extra that we put into AVLA for LTC artists and the Canadian
16518 THE CHAIRPERSON: Yes, it adds up to $18.252.
So the rest of that --
16519 MR. J. THIESSEN: Is in the administrative
line in licensing fees right there.
16520 THE CHAIRPERSON: And may not have been put in
16521 MR. J. THIESSEN: Exactly.
16522 THE CHAIRPERSON: And then when you have the
description, you have added it in.
16523 MR. J. THIESSEN: Right, because it's actually
going to the artist, the industry itself.
16524 THE CHAIRPERSON: And where would I find it in
16525 MR. J. THIESSEN: In the administration
16526 THE CHAIRPERSON: Administration
16527 MR. J. THIESSEN: Under licence
16528 THE CHAIRPERSON: The rest of that sum would
16529 MR. J. THIESSEN: It doesn't add up,
everything going to the CRTC there.
16530 THE CHAIRPERSON: Now, you have accepted, I
believe, a condition of licence of 64 per cent based on a traditional method of
calculation which I will assume you are familiar with and that is based on using
advertising and subscriber revenue, but not donation.
16531 If you add donation revenue, of course, it's
lower. It goes down to 62. What is your view as to whether a donation should be
brought in or are you satisfied with a condition of licence of 64 per
16532 MR. J. THIESSEN: We are very satisfied with
the condition of 64 per cent, and we are excited about helping with that
significant contribution to Canadian content.
16533 THE CHAIRPERSON: And you have heard many
comments, of course, about the need for flexibility and the rigidity of the
traditional formula in the risky digital world. Do you have any concern with
regard to the application of the methodology the Commission has
16534 MR. J. THIESSEN: No, we don't. We would be
delighted to stay with the letter we have agreed to.
16535 THE CHAIRPERSON: And, of course, if you are
given flexibility and you don't want it, you don't have
16536 MR. J. THIESSEN: Other applicants seem
16537 THE CHAIRPERSON: You don't have to use
16538 MR. J. THIESSEN: I don't think we need it,
16539 THE CHAIRPERSON: Yes. In interactivity, you
say that you will use interactivity as it develops. Am I to understand that
initially it will be mostly via the Internet, or possibly phone
16540 MR. J. THIESSEN: Before Kevin really gets
into it a lot, I would just like to say that we think the music video industry
is the perfect place to deal with interactivity, and Kevin you want to
16541 MR. DUNN: Certainly. This is a time to talk
about our interactive strategy. Intune has administered a realistic approach to
our interactive strategy. We really have our ear to the ground or our digital
ear to the screen.
16542 With regards to what the box can offer, new
Internet strategies, we also want to be realistic. We know we have an incredible
merchandising opportunity set before us that will obviously help the industry,
which is our main goal, and provide this content for viewers.
16543 While the box offers incredible interactive
opportunities, we know that consumer education and demand are going to be key
factors in making all of these great new offerings a reality. It will take some
time before interactive television becomes common place and everyone understands
the ins and outs.
16544 This being so, our initial Internet offerings
do not deal with pie-in-the-sky projections but establish Internet revenue
generators, the largest of these being CCM merchandising.
16545 Our merchandising efforts online will include
CDs; CD sales; video sales; concert videos; concert ticket online; a streaming
database of Canadian artists, including interviews and a "buy me" button; books,
music scores; chat rooms one-on-one with the artist.
16546 So there will be a real opportunity for those
on the net to, on demand, be able to look at their favourite artists and
converse with others about the industry.
16547 We also want to encourage young people to
follow their dreams with regard to this. We have heard from some musicians here
who have really paid their dues, and we would like them to be able to share with
our young people what it takes to become an artist.
16548 With this in mind, we will have the Intune
mentor site, a virtual "how to" with interviews and demonstrations with those in
16549 We also want to appeal to the artists who,
over the broad expanse of this country, maybe have a hard time connecting with
each other, who would like to have -- and also with the media, to give them
self-helps on marketing video production, accessing funds, new funds, new ways
of financing their videos and their CDs and media relations. Basically a forum
for Canadian artists associations and promoters and
16550 In conversations with Steve Rendall, I know
that this is a welcome project.
16551 In the competitive world of the web, we are
happy to report that there are very few CCM e-commerce sites, let alone ones
with a Canadian focus, which ours will be.
16552 In the web environment, it is not new but we
know now that anyone with a Web site is a potential webcaster or broadcaster, as
it was known.
16553 We have plans to distribute our programming
to other demographic Web sites, demographic specific Web sites. For example, at
the click of a button, an Intune Top Five Video Picks could be seen, streamed
from our servers. Widely visited Internet portals, denominational church sites,
family oriented sites, and the like, would all be benefactors to this type of
distributed programming on the net.
16554 So you will not have to come to our site. We
want to get our programming out there to other sites, for those Web sites who
would like this programming as part of their offerings.
16555 One of the biggest forces behind any Web site
is driving traffic and knowing the merchandising that we want to derive from
this new project. We have to be very concerned about driving traffic to our
16556 That is one of the ways: distributing this to
the other sites.
16557 Another way is by our on-air promotion
16558 THE CHAIRPERSON: By the other sites, you mean
16559 MR. DUNN: Yes.
16560 THE CHAIRPERSON: That will drive them to the
16561 MR. DUNN: Yes.
16562 Intune's prelaunch and launch, including
on-air promotion campaign, totals about $200,000 in air time. And our
expenditures in what we would like to do on the net are about $140,000 to
16563 Our on-air branding for Intune will also
drive traffic to the site. This will be our general strategy. When people think
of IntuneTV, it will be Intunetv.com, because when you see the music, when you
hear the music, and you like the music, you want to access that music right
away. You want to know about that artist, where they are from, how you can
purchase the music, and get to know them. You will be able to do that
16564 As the digital box and all of its offerings
roll out and people get used to it and it becomes viable and understood by the
public, we will take these same ideas and put them into strategies with the box
so that we can have a menu-driven surfing availability on the screen. So when
people are watching a video, they can call up artists' locations and upcoming
concerts, et cetera. We will take those strategies.
16565 We want to use a system that is in place now,
a system that we know, and then as the digital box reveals its many
opportunities to us we will take advantage of those as they roll
16566 THE CHAIRPERSON: You say that $140,000 would
be spent in the first year on development of interactive and transactional
components of the system?
16567 MR. DUNN: That is correct.
16568 THE CHAIRPERSON: What you have in your
financial projection is $75,000. So that is not correct. It should be much
16569 MR. J. THIESSEN: We also have in the start-up
phase your start-up as well as the first year.
16570 THE CHAIRPERSON: I see. It only shows in the
breakdown of your programming expenses under Other Programming Expenses that is
16571 MR. J. THIESSEN: In year one,
16572 THE CHAIRPERSON: Going only in year four to
16573 I hear you that some of this isn't start-up.
But even in years two and three it would be more than $75,000
16574 MR. J. THIESSEN: Right.
16575 THE CHAIRPERSON: Or once you have that set up
with the start-up, it is not as expensive to keep it going.
16576 MR. J. THIESSEN: Right.
16577 THE CHAIRPERSON: I see what you are
16578 MR. J. THIESSEN: Yes, that is
16579 THE CHAIRPERSON: That leads me to -- you are
a non-profit organization. You show a positive PBIT in year five, I believe. So
the money would be ploughed back into the development of the
16580 Am I right?
16581 MR. REIMER-EPP: That is correct,
16582 THE CHAIRPERSON: In Schedule 15 you say, I
believe, in your underlying assumptions for your projections that -- and I am
"This service will not solicit donations on the
16583 Although you will not solicit donations on
the air, is there not a way of using merchandising to actually do that
indirectly? Or is that something you will shy from?
16584 MR. REIMER-EPP: We will absolutely shy from
16585 THE CHAIRPERSON: You know what I am talking
16586 MR. REIMER-EPP: I understand what you are
talking about. It is difficult to describe but that is --
16587 THE CHAIRPERSON: Whatever one buys is
whatever one will get for the price. It is not going to be an indirect
16588 MR. REIMER-EPP: I would like to find a way to
put it into words so we could verbalize the commitment not to do
16589 But we are not going to do
16590 THE CHAIRPERSON: Okay. So donations neither
directly nor indirectly.
16591 How important is the set-top box development
to this type of service? Would it be a higher level of interactivity? Would it
be a big advantage?
16592 I suppose for those who may not have a PC
16593 MR. DUNN: Anything that adds to the
convenience of online viewing is going to be of benefit to the viewer. Right now
we see our young people surfing -- well, they are watching two screens going at
the same time. It drives me crazy at home.
16594 When this becomes available on one screen, I
see that as a great opportunity for us. You don't have to move from your
television to the Web site. You stay right on the screen; you are right there.
You are able to access and continue your viewing enjoyment. We know we love to
do more than one thing at a time.
16595 THE CHAIRPERSON: And this could be over and
above a merchandising information on the artists --
16596 MR. DUNN: Absolutely. We would like to
16597 THE CHAIRPERSON: A whole wealth of
information that could be enhancing the viewing experience.
16598 MR. DUNN: This is a very regional thing as
well. When we have artists -- in the CCM industry, to be able to know that this
artist came from Penticton, B.C. or from Gander, Newfoundland, to get that kind
of home feeling and that family feeling, I think is a very positive thing for
16599 THE CHAIRPERSON: When do you see this second
level or next level of interactivity developing?
16600 MR. J. THIESSEN: Our expert on the panel on
that is Richard, if I could ask him to answer.
16601 MR. EDWARDS: Thank you. I am not sure that we
have an exact date. I am not sure that the industry has an exact date. I have
heard that two to three years would be about when we would see that begin to be
rolled out. That would make sense.
16602 Some of that is dependent upon what the final
cost of that box would be and bringing it down to a point where it is
affordable. So I believe it is certainly very much in flux. I heard two to three
years, and that certainly sounds logistically correct.
16603 I think it is important to note, though, that
the service is not predicated on that box. We can certainly flourish very well
with the existing generation, say generation three boxes. However, we are all
very excited about seeing the next generation hit the streets.
16604 THE CHAIRPERSON: When that occurs what would
be your expectation vis-à-vis the distributor's responsibility to carry all of
16605 MR. J. THIESSEN: Our expectation would be for
the distributor to carry the information we provide them.
16606 THE CHAIRPERSON: We would expect you to abide
by the Personal Information Protection and Electronic Documents Act which is
going to come into force soon?
16607 MR. REIMER-EPP: Yes.
16608 THE CHAIRPERSON: With regard to privacy of
16609 MR. REIMER-EPP: We would be prepared to do
16610 THE CHAIRPERSON: Everybody will have a good
while to study it and to provide mechanisms to make sure they abide by
16611 MR. REIMER-EPP: Yes.
16612 THE CHAIRPERSON: Just a few more questions
about your business plan.
16613 There is in that section we were looking at,
8.2 describing your expenses for programming, a big jump between years 3 and 4.
It is actually almost double.
16614 How do you explain that?
16615 If you look at your Canadian programming
expenses projected, they go from $1.5 million to $2.8 million. The
difference between the other years is more predictable.
16616 MR. J. THIESSEN: We are planning on having --
by that time, our operation will be very strong. The first thing as charity is
when we feel that our viability is very, very complete our whole mandate is to
throw that right back into production.
16617 THE CHAIRPERSON: Yes, because you haven't
reached profitability by then. That's only in year 5, and that jump is between 3
and 4, but you have no particular explanation of this dramatic jump between
those two years.
16618 MR. THIESSEN: We are expecting to continue
the aspect of producing Canadian videos as much as possible.
16619 Again, because we are not in this business
for the money, we are in this thing to create this industry, we are just going
to be putting that money into it as soon as possible. If you look at our cash
flow statements, we have the cash available to us to be able to do
16620 So our plan is to continue to make our
service attractive and to pour that money back into industry.
16621 THE CHAIRPERSON: With regard to revenues, you
have a line for digital subscribed revenue in 8.1. I'm looking at the financial
operations that was filed I believe along with the clarification to a question
asked by the staff and you have a line for analog subscriber revenue. The
subscriber revenue projected is quite high. What type of analog subscriber does
16622 I will ask Richard Edwards to discuss
16623 MR. EDWARDS: Thank you.
16624 I think to properly answer that question I
probably should back up just a bit to talk about the overall penetration
projections in general and to say that we chose the most pessimistic numbers
that we could possibly create would be perhaps a bit of an
16625 We projected, of course, numbers based on the
information that we had from the cable industry, but we did not, and I would
like to underline "not" do that because we have a pessimistic view of the
digital environment overall. In fact, we have quite the opposite. We are
certainly not editorializing on the cable industry's ability in general to bring
these numbers to the table at some point, nor are we doing the same about the
16626 But for me to address the analog issue, it's,
I think, important again for me to address some of the penetrations of the
basics that relate to that number. To do that I must again say that we are
simply wanting to ensure that by using that very pessimistic number in our
business plan we put together, we did that simply to carry out a very
conservative approach to doing so.
16627 We know that IntuneTV will drive subscribers,
but the projections for the rollout of digital are simply that. As the CCTA has
said to the industry several times: they are simply projections. So when we take
a look at our analog numbers, we are first looking at the digital cable numbers.
I think that's important to explain that to get to the answer, as the CCTA has
filed with the Commission recently, there are now a number of studies out that
support a mid range or a better penetration between the pessimistic and
optimistic penetration projections. In our case, again, we used the extremely
16628 So with that in mind, the cable mid range
between the pessimistic and the optimistic, the numbers, when you take a look at
the studies that have been filed with the Commission, the CCTA, the Warbug,
Dillon Reed and the Paul Kagan studies, IntuneTV used again the most pessimistic
estimates of CCTA -- so instead of the 750,000 to 800,000 mid range, which the
industry was using, the pessimistic base we used was something like 406. So that
has to tie through to when we are looking at the analog numbers.
16629 Again, when we took a look at the analog
numbers at that point, we have something in the order of about 25 per cent of
the actual number of analog subscribers today in the Class-3 area have been
reflected and is part of our take rate, and we are estimating and assuming that
based on essentially a few factors. The first one is that these Class-3 cable
operators will find a way to distribute IntuneTV on their analog systems, and
they will do that through --
16630 By the way, I should say I guess that
IntuneTV we know is going to be extremely popular, particularly in the smaller
communities, so we didn't want to leave them out. Cable operators will find a
way to address the digital environment one way or another in these small
systems. As the Canadian Cable Systems Alliances said to the Commission in one
of their filings, that they have indicated that they distribute in small
communities is true but they are very aggressive. They are innovative operators
who know their communities and have a track record of applying leading edge
technological applications. So what we are looking at is, one way or another,
they have to address the issue of providing digital in their
16631 An example of that that is relatively
innovative and fairly new is the video and cable system announcement recently
where they launched CablePlus, which is essentially a box that's listed as video
and cable in Alberta. But they have done that to provide small Class-3 systems
in that environment with the opportunity of receiving digital signals in a box
as well as the analog signals.
16632 That is just one example. We are not
suggesting that we have all of the examples, but we do feel that they will find
a way to do that or they will lose their market share to MDS and to DTH
applications, in which case the numbers that we reflected there would simply
rollout into the DTH and MDS numbers, but we have reflected them there because
we felt it was a percentage of a real number that we can get our hands on.
Again, if they don't service that industry or that subscriber in that way,
through whatever unique means they have, then they will lose those numbers to
the DTH and the MDS industry.
16633 Again, we think that because of the way we
have calculated that, they are so incredibly pessimistic in their number ranges
that they will follow between those two.
16634 THE CHAIRPERSON: Your DTH and MDS numbers for
revenues are rolled into the digital subscriber revenue line; it's not separated
16635 MR. EDWARDS: That's correct.
16636 THE CHAIRPERSON: Although, your analog
numbers do keep growing right up to year 7, what you are saying is quite
possibly they will decrease and go into the first line.
16637 MR. EDWARDS: That's correct. They will either
address the situation by providing the consumer what they are looking for -- and
they are smart business people, I'm sure they will find a way to do that -- and
if they don't they will find that they will be losing those subscribers,
particularly DTH and MDS.
16638 THE CHAIRPERSON: Yes. But by increasing that
line year from year, you are not showing much optimism about them finding a way
to become digital.
16639 MR. THIESSEN: Because the line jumps from
year 1 to year 2, but then sort of stays flat
year 3 --
16640 THE CHAIRPERSON: Not really. No, no. It
16641 MR. THIESSEN: Are you talking about the
analogue subscriber revenue?
16642 THE CHAIRPERSON: Yes, the revenue for analog
subscription increases from 367,297 in year 1, to 458,734 in year 7. So you
are saying quite possibly this will not be the way in which it
16643 I'm asking because in some cases that line
decreases and disappears by year 7. Yours keeps increasing by a certain
percentage, which I haven't calculated. I thought, which I heard in the answer,
that part of it was that it is perhaps a service that will be attractive to
small communities, but it doesn't seem to reflect your optimism about Class-3s
16644 MR. EDWARDS: Just a comment on that. What we
did was we took a look from the penetration and we simply took a look at the
historical average increase of Part 3 systems and we spread that out through the
years and then we took the same percentage.
16645 THE CHAIRPERSON: Yes. What you are saying is
forecasts are forecasts.
16646 MR. EDWARDS: This is true.
16647 THE CHAIRPERSON: That's
16648 Those complete my questions. Thank you very
much for your co-operation.
16649 Commissioner Williams has a question or two
16650 COMMISSIONER WILLIAMS: Thank you,
16651 I'm interested in having you expand on the
comments you made in your presentation a few minutes ago, or perhaps it was an
hour ago, when you stated what was needed in the Canadian broadcasting system at
this critical point in time is diversity, not only of programming genres but
also of ownership and control.
16652 Specifically, why do you feel that a Category
1 licence is required to establish your service? I have heard you say just a few
minutes ago that you weren't in it for the money, you were in it for other
reasons. So why do you feel a Category 1 licence is required to establish your
16653 MR. THIESSEN: I think when you look at the
overall broadcasting system in terms of cable and DTH, the Category 2
applications you had before us are going to have a hard time launching if you
are independent. I don't think there is any problem if you are a Rogers or Shaw
or if you are a big broadcaster who can leverage some of their existing services
to ensure that their Category 2s get placed on those other packages, but if you
are an independent it's very hard to actually insist on carriage. It's hard for
you to leverage anything.
16654 Probably, if I was to take a look at all the
different reasons, the biggest reason would be Category 1, ensuring the
carriage. That would be our number one reason.
16655 COMMISSIONER WILLIAMS: Okay.
16656 Why do you think the CRTC might find this to
be, in your words:
"...uniquely appropriate opportunity to inject some diversity into the
bloodlines of Canadian
16657 MR. THIESSEN: I think, by and large, you have
bigger and bigger corporations who are doing more and more -- taking over more
and more of the broadcasting in Canada. If you would take a look at pretty much
the very beginnings of the Canadian broadcasting industry when there was
discussion, "How is this going to unfold", and "How are things going to happen
in Canada here" -- this was back in the fifties when the Royal Commission went
across -- one of the things that the Fowler Report described and talked about
was diversity of ownership.
16658 They talked at that time that maybe it
wouldn't be good to have newspaper moguls control everything. Maybe it wouldn't
be a good idea to have radio guys control everything. How do we create something
where there is a new level, a new ownership, where there is somebody who
controls, say, television?
16659 Now, I think their lot has changed,
obviously, from the 1950s and the 1960s, so I don't want to go back through the
entire history of the Canadian broadcasting system, but I think it is always
great to have something that is new and different.
16660 We will bring something that is very creative
to this industry. We are going to have something that is going to be different
than what other music services are going to have on, and it is going to be
something that is going to benefit Canadians and Canadians want
16661 So I think the big reason is, we look at
something like the CCM market, see what is happening in different parts of the
world and look at how exciting and vibrant it is, and we are looking and saying
"You know what, this could happen here in Canada."
16662 We think a Category 1 licence is a
perfect opportunity to bring the people who are interested in this genre into
the Category 1 mix, tier together with us and create something that is
really neat here.
16663 MR. REIMER-EPP: If I can add to that just
16664 On the issue of why the timing at this
particular moment is important -- I believe that was a part of your
question as well.
16665 The timing for this industry in particular is
that with a lack of Canadian content, as we have already discussed with the
Chair, it is important to have an engine to drive the production of Canadian
content. As a Category 2 service it would be very easy to meet the levels
that are required for Canadian content and just have an American music
16666 Clearly that is an option which we rejected.
We are not interested in just importing the American music that is already
available into Canada. If there is going to be a Canadian alternative in CCM, it
has to be supported by some sort of engine. Category 1 is that engine
because, of course, mandatory carriage is part of it.
16667 Given that it appears that this might be one
of the last opportunities to have a Category 1 license, this point in time
is critical. That, of course, is in the Commission's discretion, but given the
easy access to the unregulated or less regulated Category 2, the timing for
Category 1 and, in particular for this industry, that our application deals
with is really essential.
16668 MR. DUNN: I just note Steve had some
excellent comments as far as timing as well with the industry, and seeing as we
are talking about timing I just wanted to make sure you had an opportunity to
16669 MR. RENDALL: Well, I think it is a critical
stage for Canadian artists which are starting to get some recognition within the
United States industry but have had no vehicle up until this point to distribute
their videos to the entire country. So by providing them that platform, they
have much more opportunity to do live concert appearances, retail sales, Web
sales, certainly radio airplay and the video would be synergized
16670 I think we are at a point where the industry,
the CCM industry has been sort of an underground little organization growing for
the last 20 or 30 years and it is at the point now where it needs radio, it
needs video, it needs some of these larger vehicles from which to grow. I think
that is an important thing in terms of the timing of this particular
16671 COMMISSIONER WILLIAMS: Thank you very much,
16672 That concludes --
16673 THE CHAIRPERSON: I thought you would tell me
that you were looking for a Trinity of services.
--- Laughter / Rires
16674 MR. J. THIESSEN: A bouquet.
16675 THE CHAIRPERSON: We have been very serious. I
have been working quite hard at finding something to make you laugh.
--- Laughter / Rires
16676 MR. J. THIESSEN: Thank you. It is going to
help us for the rest of the evening.
16677 THE CHAIRPERSON: Counsel?
16678 MR. STEWART: Thank you, Madam
16679 Apart from music videos what is the nature of
the foreign programming that you plan to broadcast?
16680 MR. REIMER-EPP: Foreign programming would
include music videos as well as concert footage. Primarily music videos, but
also some concert footage, possibly interview excerpts, things like that,
dealing with artists, essentially the exact same kind of programming that we are
talking about in the Canadian environment.
16681 MR. STEWART: In the same proportion, roughly
16682 MR. REIMER-EPP: Correct.
16683 MR. STEWART: Thank you.
16684 I take it that you would accept as a
condition of license a requirement that Canadian music videos be evenly
distributed throughout each broadcast week?
16685 MR. REIMER-EPP: Yes, we
16686 MR. STEWART: Thank you.
16687 Can I get your agreement that you would also
accept a condition of license with respect to the proportion of your schedule
that will consist of music videos? Could you please also state for the record
what that proportion it would be, whether it is the 50 per cent that you
have referred to in the course of this proceeding?
16688 MR. REIMER-EPP: If I understand your question
it is whether we would accept a condition of license that 50 per cent of
the program schedule consists of music videos? Am I
16689 MR. STEWART: Well, the percentage is over to
you, but, first of all, whether you would accept such a requirement by way of a
condition of license and, if so, what would the percentage be?
16690 MR. REIMER-EPP: Yes, we would accept a
condition of license and we would accept 50 per cent.
16691 MR. STEWART: Thank you.
16692 Just with respect to nature of service, I
note on page 101 of your application that you have -- and this is just
an example chosen at random -- an objective to bring new music to extreme
sports enthusiasts. Can you just describe how that relates to
16693 MR. REIMER-EPP: I am not the programmer, but
I can assure you that consistently with the previous comment made that all
programming will relate to the music genre this will not be a sporting event. We
had discussed a particular program in some detail with this issue in mind and it
will not consist of any one sporting event or any single -- it's not a
sports channel so it would be clearly excerpts that go with the music in the way
that a music video would, just dealing with sports subject
16694 MR. STEWART: Thank you. But it would be CCM
16695 MR. REIMER-EPP: Absolutely correct,
16696 MR. STEWART: Thank you.
16697 Just on page 107 of your application, I
see that you catalogue a concert as an in-house production. My understanding was
that that would be given over to the independent production. Do you have any
16698 MR. J. THIESSEN: Yes. The comment is that
there is a misnomer in that section. It will be to independent
16699 MR. STEWART: Thank you.
16700 Those are all my questions. Thank you, Madam
16701 THE CHAIRPERSON: Thank you.
16702 So it is extreme sports, it is not going to
be fire dance for tennis?
--- Laughter / Rires
16703 THE CHAIRPERSON: But that's the idea, right,
would be extreme sports with some contemporary music, the character of which
would fit the sport.
16704 MR. J. THIESSEN: Without taking too long I
would just like Dave to talk a little bit about it.
16705 MR. MILLS: Sure. To maximize the contemporary
Christian music that is out there but isn't necessarily already in the video
format, we could take these songs that don't have videos yet developed for them
and add everything from skateboarding, snowboarding and --
16706 THE CHAIRPERSON: Or extreme skiing or
16707 MR. MILLS: Exactly.
16708 THE CHAIRPERSON: And create somewhat of a
video really --
16709 MR. MILLS: Exactly.
16710 THE CHAIRPERSON: -- a music video with that
footage combined with music.
16711 MR. STEWART: Excuse me, Madam
16712 THE CHAIRPERSON: Yes?
16713 MR. STEWART: I did forget to ask one standard
16714 THE CHAIRPERSON: Go ahead.
16715 MR. STEWART: With your permission, thank
16716 Just if you could confirm that your proposed
service would be technically equipped to allow for the broadcast of descriptive
16717 MR. J. THIESSEN: Yes, absolutely that will be
part of our plan. In fact, as an applicant we are proposing to spend $100,000
over the license term to have that service actually provided to the
16718 MR. STEWART: Thank you.
16719 Thank you, Madam Chair.
16720 THE CHAIRPERSON: Thank you.
16721 The word is yours, either of the
Mr. Thiessen's, but not both.
--- Laughter / Rires
16722 MR. J. THIESSEN: I will proffer the
16723 THE CHAIRPERSON: All Trinity needs a
--- Laughter / Rires
16724 MR. W. THIESSEN: Thank you, Madam Chair, I
16725 Although we described ourselves as being new
in the broadcast side of things we do have some of us that have considerable
experience in the program production side of things. We have been in production
for -- I have been in production for 24 years and a lot of my staff
and others that are moving into a new -- hopefully a new marketplace here
will bring a lot with it.
16726 I look forward to the opportunity to touch
16727 One of the things that we have, as a
ministry -- and we have been involved in ministry and the new organization
will be a ministry -- is that we see technology as being an opportunity for
people touching people. This is all about people touching people. It's not about
doing -- I mean, it's fun to do neat things, but if in the end our lives
aren't enhanced or in some way built up by it we question why are we doing it.
For us, it's about people.
16728 In the organization I have been involved
with, Trinity Television, some people -- and I think -- and I don't
want to take a lot of time here, but some of the American broadcasters in this
field have somehow seen their place as a broadcaster as somehow putting them in
a place apart and up above, and something that I have sensed for myself from the
very beginning is that we come into this as a servant to provide an opportunity
or a vehicle for those who have gifts that are needed to go to those that have
the need for these gifts.
16729 It's a matter of connecting gifts that are
available to those that are enhanced and enlarged by the gifts they receive.
That to me is what media is about. It's about conveying from people to people,
but only on a much larger scale than we can do in a single room. Most of us
communicate closely around coffee. That's where my life has been enhanced so
much, but television is able to go beyond that.
16730 I don't want to get into preaching here. I'm
inclined to go that way at times.
16731 THE CHAIRPERSON: That's when you were
younger, Mr. Thiessen. It puts a damper on it.
16732 MR. W. THIESSEN: Yes, it does. What I want to
say is I personally am delighted to see these young people. I classify them.
They have done an excellent job with their presentation today and I am delighted
with that. They have done an excellent job.
16733 As we close, just an interesting point I just
want to straighten out. There's a little bit of levity here and I appreciate
that. With regard to the -- there was a reference to Goldilocks that
came along the way earlier on in the hearings. I would just like to straighten
out something about the fairy tale that I think we forget.
16734 It was Little Bear whose porridge and whose
chair and whose bed was just right. So when you think of your criteria for a
successful application and what our proposal means to subscribers, industry and
diversity, we suggest that this Little Bear option is worthy of your
consideration and is just right.
16735 THE CHAIRPERSON: Thank you,
Mr. Thiessen. You will have to phone Mr. Znaimer now and make sure he
doesn't copy your genre with some cross-over on to his specialty
16736 We thank you very much for your cooperation.
We hope you have a good evening. We will see you again
16737 We will resume at 8:30 tomorrow morning with
the Global applications.
16738 Alors nous reprendrons demain matin à
8 h 30.
--- Whereupon the hearing adjourned at 1735, to resume
on Tuesday, August 22, 2000 at 0830 / L'audience
est adjournée à 1735, pour reprendre le mardi
22 août 2000 à 0830