Satellite radio gets greenlight

There are but a few defining moments in the history of any industry. The CRTC decision unveiled at 4pm yesterday maps out a future for radio that will undoubtedly energize listeners from coast to coast. 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." John Bitove, chairman CEO and founder of Canadian Satellite Radio, the firm that triggered this entire process, said "this is a tremendous opportunity for all Canadians and an evolutionary milestone in maintaining our country's leadership position within the global broadcasting industry." 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."

The first critical step took place last November with the CRTC hearings in Ottawa/Hull at which three satellite/subscription applications were presented. These included the XM/Canadian Satellite Radio and Sirius/CBC/Standard satellite proposals along with the CHUM 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 and arm twisting 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 seven months in coming.

If I were a sports reporter I would call this a home run for satellite. Here are the need-to-know facts from the decision.

Canadian Satellite Radio (XM)/ Sirius

  • * Each of the satellite licensees must offer at least eight original channels
  • * At least 85% of the content on Canadian channels must be CANCON
  • * At least 25% of the Canadian channels must be in the French language
  • * At least 25% of the music on the Canadian channels must be new Canadian music
  • * A further 25% of the music must be by emerging Canadian artists
  • * Licensees much contribute at least 5 % of their gross annual revenues to Canadian talent development initiative such as FACTOR
  • * 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"
  • * 6 minutes per hour of national (no local) advertising will be permitted
  • * Satellite services will feature 100+ stations broadcasting to all of North America in digital sound

As we already know, 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."

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.

The subscription radio applicants don't see themselves 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.

CHUM/Astral

  • * The CHUM/Astral subscription radio application involves a progressive rollout of urban centres that would initially deliver 50 commercial-free satellite digital channels, produced entirely in Canada consisting of at least 20% in the French language
  • * All channels would adhere to current CANCON minimum required by Commission regulations
  • * The CHUM/Astral initiative would feature subsidized digital receivers that would offer both traditional free access for conventional DAB stations as well as their subscription channels. The primary difference with this initiative is the fact that it wouldn't be national as such, but rather would involve a series of terrestrially based stations in larger markets across the country sharing programming
  • * Auto manufacturers have said that they won't support the CHUM platform, leaving them to concentrate on the portable/home market alone

Paul Ski, Executive Vice-President: Radio, CHUM 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.

The number of satellite subscribers in the U.S. is over 5 1/2 million and growing rapidly. This has the added benefit of revitalizing the radio receiver industry at retail. Expect the same to be true of the Canadian experience

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. You are about to hear the future. Stay tuned.