Music Video Goes Digital In Canada

Canadian labels may have been taken by surprise by the announcement that a new MTV channel is launching on their doorstep (Billboard Bulletin, Aug. 22), but they are welcoming its arrival—and that of another four new digital-music channels.

Last year, federal regulator the Canadian Radio-Television and Telecommunications Commission (CRTC) issued 283 digital-TV licenses to Canadian broadcasters. As a result, 16 new English-language and five French-language digital-TV channels will start up as Category One services Sept. 7. All Canadian cable and satellite TV companies are legally obliged to carry these stations—including the new MTV Canada—as part of their viewing packages.

Simultaneously, more than 90 new channels are launching as Category Two services, specializing in music, news, sports, movies, and fashion. These are not guaranteed carriage on cable or satellite, and negotiations have been ongoing throughout the year between license holders and the cable/satellite companies.

"It's the most surreal thing," one programmer comments. "We're trying to launch channels in two weeks, and we don't know [all the companies] who are carrying us. And we don't know how those who are carrying us are packaging or marketing us to consumers."

Some 2.5 million Canadian households will be able to receive the new digital stations. They will all be offered free during a 90-day preview period, after which cable and satellite TV companies will offer various options.

Critics argue that many stations will fail to get carriage or attract sufficient advertising revenue and eventually disappear. "There's a potential audience of 21/2 million households, but nobody knows what the real pickup rate is," says David Kines, VP/GM of music-video networks MuchMusic and MuchMoreMusic.

Ted Kennedy, director of music-TV programming at media conglomerate Corus Entertainment, adds, "Right now, it's like an old Western movie, where wagons are lined up behind a ribbon on Main Street, ready to rush out to claim land."

MTV enters Canada as part of a licensing deal, concluded Aug. 16, between MTV Networks and Calgary-based Craig Broadcast Systems. Last year, Craig was granted a license by the CRTC for a youth-oriented digital channel, initially to be named Connect. That will now use MTV branding and selected programming. Craig Broadcast Systems VP of specialty networks Wayne Sterloff notes, "In order to get carriage, subscribers, and advertisers, we knew we needed a global brand."

MTV Networks chairman/CEO Tom Freston calls the alliance with Craig "a strategic milestone in the evolution of MTV Networks."

Its youth-oriented license dictates that MTV Canada will not closely resemble MTV elsewhere; not only must 50% of all broadcast output be Canadian content, but music videos can only account for 10% of airtime. Other music programming is not included in the latter figure. "It isn't going to be MTV U.S.A.," Sterloff concedes. "That said, all of MTV's highest-rated shows will appear on the service."

The bulk of MTV Canada's original output will initially be independent productions, Sterloff says. "Eventually, we will have 50-60 in-house people." The 24-hour service will be based at Craig's digital playout center in Calgary. Craig will launch three MTV genre-based music services in Canada at a later date.

MTV Canada is expected to make a sizable impact here. "Kids will use MTV and MuchMusic as their two channels," predicts Steve Waxman, director of national publicity for Warner Music Canada.

Yet most of Canada's music industry was caught off-guard by the link-up. "Until I saw it in Billboard Bulletin, I had no idea about MTV coming to Canada," says Jody Mitchell, director of acquisition/artist development for EMI Music Canada.

The new channel enters a market dominated by CHUM-owned MuchMusic, which is currently in 7 million Canadian homes. CHUM's AC-based MuchMoreMusic (M3) airs in 6 million homes. With MTV's arrival, MuchMusic will lose its exclusivity on MTV shows; about 95% of the output of the stations is music videos.

CHUM is also launching seven of its own Category Two stations, including MuchLoud, a hard-rock/heavy metal music offering, and MuchVibe, an urban music channel. Kines says, "It is important to serve the people that want this music."

Two other music-based Category Two channels will also launch: EdgeTV, featuring new rock music (Corus Entertainment), and Beats Per Minute, a dance lifestyle channel (Stornoway Communications).

EdgeTV is an extension of Toronto-based alternative radio CFNY, also owned by Corus. "In the launch phase, the channel will be very near to what CFNY does," Kennedy says. "Down the road there will be a diversion, but you will see synergies along the way."

John Martin, head of programming for BPM, says, "We are doing a focused dance station with attitude. There will be video programming, but it will be focused and within program streams."