A New Wave

A new wave is sweeping over Canada in what will become a defining moment for radio broadcasting. With their approval of three subscription licenses, the CRTC issued an emphatic yes to new technologies which Chairman Charles Dalfen, in a  crystal clear (you might say digital) fashion, declared “will help to give Canadian talent exposure to listeners across Canada and indeed, North America-both through new Canadian channels and airplay on U.S. channels.”

The first critical step took place last November with the CRTC hearings in Ottawa/Hull at which 3 satellite/subscription applications were presented. These included the XM/Canadian Satellite Radio and Sirius/CBC/Standard satellite proposals along with the CHUM Ltd./Astral terrestrial/DAB offering.  In the room was a who’s who of Radio in Canada. The lobbying for intervention support leading up to all of this was intense. So much hand shaking took place that few people in the radio or music industries were left with shoulder sockets in tact. After that came the hand wringing as everyone awaited the decision which was over 7 months in coming.

If I was a sports reporter I would call this a home run for satellite. Still, as we forge toward the launch dates, a good deal of debate continues.

Canadian content (CANCON) has been the pivotal issue being discussed during this entire process. In a uniquely Canadian fashion, the fostering of Canadian talent is always a major consideration for the commission when granting broadcast licences. Both satellite applicants pointed to the fact that they will embrace niche formats, new music and emerging artists, giving them the opportunity to reach all of North America. CHUM, with its terrestrial based system (in Canadian major markets only), focused on their pledge to adhere to the current CANCON regulations for traditional broadcasters.

The satellite radio applicants don’t see themselves itself as being in competition with conventional radio, but rather as a compliment to it. One that offers cutting edge niche programming that mass appeal stations can’t afford to deliver. The presumption here is that rather than cannibalize tuning to existing traditional stations, satellite will help to revitalize listeners and increase overall tuning to the medium, weaning attention away from video games, MP3 players, etc.

The artists/musicians/comedians with whom I have recently spoken are equally enthralled about the satellite broadcasters' commitment to new talent and niche formats as well as the opportunity to reach the U.S. market. Many major Canadian artists including Daniel Lanois (producer of U2, Bob Dylan, Peter Gabriel), Robbie Robertson, Ian Thomas, Colin Linden and Jeff Healey have spoken out in favour of satellite in Canada. Behind the scenes, Canadian Satellite Radio confirms that production on high profile features has begun with a number of these artists. As well, building of the technical infrastructure is underway.

Certain industry groups (ACTRA, etc.) have launched an appeal of the decision to the cabinet of the federal government, perhaps in hope of negotiating some further concessions. Past history indicates that the chances of such an appeal being successful are slim to none. The satellite applicants seem to be undeterred. John Bitove (President and C.E.O. of Canadian Satellite Radio) says he expected resistance to the CRTC ruling, and that won't stop CSR from pushing ahead with plans to launch its service by Christmas. “I think some of (the coalition's members) have vested interests with existing broadcasters and some of the status quo, in terms of the Canadian broadcasting industry,'' he said in an interview. The fact of the matter is that tens of thousands of independent artists are behind satellite radio because of the new-found exposure it will mean for them ... as well as the hundreds of millions of dollars in funding it will mean to Canadian artists and musicians.'' For his part,  Kevin Shea, President & CEO of Sirius Canada remarked that “the commission has worked hard to give us a reasonable and creative framework within which we can move toward providing Canadians with an outstanding programming line-up.”  Wall Street’s fears that Canadian content restrictions might deter satellite’s launch appear to be unfounded.

One minor sticking point for Sirius was the decision that re-broadcasting of existing services in their entirety (such as the Sirius re-broadcast of CBC services) would not be permitted. “At least 50% of the programming on each of the 8 channels… (must be) original Canadian programming”.

The CHUM/Astral group, which was hoping to have exclusive access to the subscription market, responded quickly to the decision. Paul Ski, Executive Vice-President: Radio, CHUM Limited said “we are extremely disappointed with the Commission's decision…..It is unrealistic to expect that an all-Canadian service such as ours can compete with undertakings whose channels are 90% U.S. originated.” CHUM representatives have repeatedly said that they would not launch if all three applications were approved. Most industry pundits agree that it would be economically impractical for CHUM to attempt to launch given the cost of producing 50+ channels and the formidable satellite competition. Equally important is the fact that auto manufacturers have said that they won’t support the CHUM platform, leaving them to concentrate on the portable/home market alone.

Following on the heels of the U.S. experience, auto manufacturers are chomping at the bit for satellite in Canada. Michael Grimaldi, president of GM Canada issued a statement saying “without doubt, satellite radio is the biggest advancement in mobile audio technology in the last 60 years and we plan to present it (Canadian Satellite Radio) in our upcoming models.” That puts satellite in the driver’s seat.

In addition to being factory installed in new vehicles, satellite radio will soon be widely available at audio retail in Canada. Receivers by Polk and Yamaha allow for integration into your home stereo. It is also available through numerous manufacturers such as Sony, Alpine, Pioneer, and Panasonic, for dashboard install to rejuvenate your car stereo. Perhaps the most vibrant sector of Satellite Radio equipment is in the portable and plug and play category. These devices can interface with your car stereo through wireless FM modulators, they can hook up to your home stereo unit through a hardwired cradle and some simply plug into a boombox for true portability. These devices are currently manufactured by Delphi, Audiovox, Pioneer, and Tao.

All eyes were on the number of satellite subscribers in the U.S. which is currently over 5 1/2 million and growing rapidly. Retailers are eagerly anticipating the added benefit of revitalizing the radio receiver industry at retail.

Listeners and artists alike have been demanding change and they are, in all likelihood, about to get it. The radio industry (and it would appear the CRTC) is listening to them. Canada is about to tune in to the future.