Canadian Business, June 1996 [cover story]  

They’ve come from far and wide to Ottawa this May. Planeloads of TV wanna-bes, parading ideas for new TV stations in front of the Canadian Radio-television and Telecommunications Commission (CRTC). Among the old hands, none stands out like Moses Znaimer: lean, stylish Zen master of independent Canadian TV, co-founder, president and executive producer of the Citytv, MuchMusic, MusiquePlus and Bravo! divisions of CHUM Ltd. of Toronto. Ever imperious, Znaimer is here to pitch plans for eight new Canadian stations — any that catch on would join a CHUM TV roster that also includes CKVR, a.k.a. “The New VR,” for which Znaimer is creative consultant.

 

Achieving Znaimer’s success in Canadian broadcasting is but a dream for most of his fellow applicants. Yet even here, Znaimer’s eyes are on a bigger prize. At an early break in the sessions, he gets a “good news, bad news” message from Jay Switzer, CHUM Television’s vice-president of programming. Apparently, CHUMCity International, a CHUM division that in the past couple of years has been actively selling Cityty/MuchMusic format licenses to stations around the world, has just landed another prospect. Once again, a new foreign station had weighed its options and decided that Citytv’s type of TV — local, cheap and self-righteously hip — was the right one. That is the good news. The bad news, Switzer jokes, is the new venture’s location: Lithuania.

 

Znaimer laughs, but he’s not really amused. Rampant street crime? Severe shortages of medical supplies? Inadequate policing? What better way for newly independent Lithuanian TV to bring the country’s stories to its people than by adapting Citytv’s proven format, the success of which is built around its ability to celebrate, reflect and involve its local community? It wouldn’t be the first station to do so, that’s for sure. Citytv satellite sisters are popping up all over the dial. In Helsinki, MTV3, one of Finland’s two commercial networks, now airs a 90-minute block of after-school fare called Jyrki that was designed and art-directed by Citytv/MuchMusic, which also provides content and ongoing refinements. In Argentina, meanwhile, there is a music video channel called MuchaMusica, a Spanish-language descendant of MuchMusic. And as soon as South Africa’s broadcast regulators give it the nod, Cape Town will have its own incarnation of Citytv.

 

Today, Toronto’s Queen Street; tomorrow, the world? The way Znaimer sees it, the timing couldn’t be better. After Ottawa he heads to Copenhagen to address a conference of independent TV stations. “There are going to be 300 of them in Europe, and none of them existed three years ago,” Znaimer says, savoring the prospect. “Very few of them have a philosophy on which to ground themselves. They have no role models. They’ve heard about this one station in Toronto that manages to stand upright and find a place for itself in the scheme of things. They want to hear about the economics; they want to hear about the style and this new way of organizing the TV factory; and they’re interested in buying our shows.” Znaimer says they’re also interested because cheaper technology means any one of them can now get into TV for a paltry $3 million.

 

Call it an alternative export for the next millennium. While traditional TV networks are madly merging with movie studios, burgeoning phone companies and cable companies to increase their clout and global reach, Toronto’s relatively tiny but aggressive Citytv has set out to teach the world how to shoot, edit, produce and think about TV — one town at a time. From a revenue standpoint, sales of individual programs — worth something in “the seven figures” according to Switzer — still make up the bulk of its foreign business. But that may soon change. “Format  licensing deals are [now] the biggest single element of our international business, from a growth point of view,” says Switzer. In return for sharing its cathode-ray DNA,  Citytv’s parent gets up-front fees for information, programming and consulting, plus a stake in many of the new clones (equity as a partner and 1% to 5% of gross revenue); Cityty/MuchMusic is notoriously tight-lipped about its finances, and Znaimer deflects specific questions about money to Switzer and his other chief lieutenant, Stephen Tapp, vice-president and general manager of CHUMCity International. But neither is much more forthcoming.

 

“The Citytv philosophy is ‘galactic vision, local touch.’ All it takes is a couple of deals like Finland or Argentina to illustrate that it can be a win-win situation,” says Tapp, who ranks a close second to his boss in believer’s zeal. In fact, proselytizing is a big part of the Citytv success story. Although Moses and his disciples are loath to admit it, they did not invent everything that is now being packaged and sold as a Citytv original. What they have done, however, is make it their own. And if the success of this latest foreign effort continues, the result will be about the same — TV being remade in Znaimer’s image. You don’t believe it? Just ask Jyrki’s 28-year-old Finnish producer, Marko Kulmala. “The only way we know how to make TV,” he says, “is the way we learned it at City.”

 

Citytv may be on the cusp of global domination, but at its trendy downtown Toronto headquarters a few weeks before Znaimer’s appearance in Ottawa, it looks like business as usual. As they do every April, a contingent from Citytv is preparing for its annual pilgrimage to MIPTV, the massive international TV program marketplace in Cannes, France. There Tapp, Switzer and others will crowd the Croisette with thousands of other TV people from around the globe.

 

Programs are MIP’s main commodity: motion pictures, made-for-TV movies, drama, sitcoms, news and cartoons. As such, MIP has been a mainstay for sales of Citytv’s programming for years — shows such as style digest FT-FashionTelevision, which just turned 10 years old and is now seen in more than 100 countries. Likewise, The NewMusic’s mix of cultural theory and interviews with the latest pop sensations finds enthusiastic viewers everywhere. International audiences are building, too, for newer offerings such as Media Television, while Chileans, Ecuadorians and Brazilians get a bang out of Electric Circus, the thumping dance show presided over by Monika “You’re in the house” Deol. Such edgy, street-smart original productions have been a Citytv trademark for much of its history. “They helped put City on the map,” says Tapp.

 

MIP has also taken on new significance since Citytv and Finland’s MTV3 used the event last year to sign the deal that put Jyrki on the air. At the time, MTV3 was looking for a way to capture more young viewers in the important late-afternoon time slot. It asked Citytv to come up with 90 minutes’ worth of programming that would grab the kids when they got home from school.

 

“We gave them access to all our programming,” Tapp says. “We taught them how to create an environment, how to shoot, how to light. We also allow them to pick and choose which elements in our programming will work best for their audience.”

 

What you would see if you were watching in Finland might seem disorientingly familiar: a street-level storefront broadcast location with lots of windows; hosts dodging equipment and stepping over power cables; no attempt to hide the mechanical realities of broadcasting; and, finally, bits of video from Cityty/MuchMusic shows, subtitled in Finnish.

 

Teaching the Finns how to replicate the Cityty/MuchMusic format for 90 minutes a day was the responsibility of David Kines, Cityty/MuchMusic’s director of music operations. “They already had some idea of the logistics involved,” Kines says. “But the people actually executing the show were TV neophytes, which was good.” At one point last summer, more than a dozen of the people who make Jyrki visited Citytv’s Toronto headquarters to look and learn. “You can do brochures or pamphlets,” Kines says, “but at the end of the day, you’ve got to come here to see it.”

 

The result? Since the show debuted in September, Jyrki’s viewership has risen 54%. Big international advertisers such as IBM Corp., eager for a loyal audience between 15 and 34, are buying commercials. Needless to say, the people at MTV3 are delighted. “The audience reaction has been fantastic,” says Kulmala. “The critics were just the opposite, saying things like, ‘You can’t do TV like this; it doesn’t look right: But that’s changed totally — now they love it. It’s like they turned around 180°.” MTV3’s competitors have also taken notice, he says. “It’s funny how much imitation there is now”

 

But scalping Jyrki’s style hasn’t worked for its competitors. “[Viewers] aren’t stupid,” Kulmala says, demonstrating once again there’s no zealot like a convert. “They know we’re the originals, so they don’t watch the other programs.”

 

Citytv’s co-evolution as a producer as well as a broadcaster was born of necessity. In 1972 broadcast engineer Israel Switzer had an idea to launch a new TV station in Toronto. The arrival of cable meant that even a small ultrahigh-frequency (UHF) independent could lay claim to a potentially large audience. While Switzer came up with the idea, it was his wife, Phyllis, who put it into play. Her co-founders included Znaimer, then a former CBC producer who was working as a venture capitalist, media consultant Ed Cowan, and lawyer (now senator) Jerry Grafstein.

 

The nascent Citytv was chronically underfinanced. It could barely afford to pay its people, much less bid against its larger local competitors for the kind of purchased, first-run US programming that formed the core of everybody else’s schedule. Initially, that meant airing movies (most famously, late-night “Baby Blue” soft-core porn films), news and well-worn syndicated fare. By 1975 the station was $1.5 million in debt. Multiple Access Ltd., a holding company in which the Bronfman family had an interest, came to the rescue, buying 45% of Citytv (a share it has since sold to CHUM). Along with its money, Multiple Access introduced Citytv to a media consultant who had been refining the product at its Montreal station, CFCF-TV His name: Jacques de Suze. While Znaimer is given, and takes, credit for being the brains of Citytv, more accurately he is the right lobe of that brain — conceptual, creative, holistic and aware of the big picture. De Suze is the left brain: analytical, precise, logical and with a mastery of detail.

 

“I went to Toronto in 1976, sat in a hotel room, ordered up a bunch of TV sets and watched the market for three days,” de Suze says. “I met Znaimer on the fifth floor of the old Citytv building at 99 Queen St. E., in a room with no furniture and bare walls. We talked about the concept of local news.” At the time in Toronto, local news wasn’t really local at all. CBC flagship CBLT and CTV’s CFTO concentrated on news from Queen’s Park, Parliament Hill and overseas. When he left his hotel room, de Suze found a city that wasn’t on TV “You could walk up Yonge Street and hear six different languages in a couple of blocks,” he says. That city, he and Znaimer agreed, should be the subject, the focus and the audience for the newscast that would become CityPulse.

 

The two agreed on more during that first meeting. “It was very much focused on TV as a medium — both of us being TV animals and very visually oriented,” says de Suze. “I thought we had a chance to put a very beautiful and dynamic city on TV — literally, a day in the life of Toronto. Moses was heading in that direction, probably from a different starting point, and we met. There was a lot more than synergy. There was a meeting of minds and of souls. And we never looked back.”

 

From the beginning, Znaimer and de Suze (who still has an exclusive contract with Citytv that prevents him from working for any other broadcasters in the Toronto market) knew they couldn’t beat the established Toronto stations on their terms, so they changed the rules. Topping the ratings has never been Citytv’s goal. Being different is paramount. It started with little more than adding more ethnic reporters and more live remote broadcasts to the CityPulse news show. The intent was to garner a more reliably loyal segment of the audience, one that can be more profitable than big numbers in a particular ratings book, especially in the coveted 18-to-34-year-old demographic. “If one-third of our potential viewers don’t watch us or don’t like us, that’s OK,” says Jay Switzer. “It’s OK as long as a different third of that audience feels very passionate about us :’

 

The Citytv being resold today really started to take shape with the move to its new building, and a trendier neighborhood, on Queen Street West in 1987. CityPulse immediately set itself farther apart by ditching its anchor desk and having its anchors stroll through the newsroom. It made more of the fact that it was using videographers (camera operators who also report stories) by having them appear in their own stories, either filming their own reflections with their Betacams conspicuously present or aiming a Hi-8 video recorder at themselves. The same techniques that help set CityPulse apart also came to define Citytv’s slate of other popular original programs. Indeed, everything Citytv does bears its signature style: a distinctly informal approach and a rock ‘n’ roll esthetic (literally, in the frenetic camera work and flash-cut editing and, metaphorically, because of the intuitive, brash and low-cost approach).

 

In short, Citytv understood the importance of branding — creating a consistent style that viewers can recognize in seconds — before there was even a buzzword for it. In the story of Citytv, Znaimer’s true genius has been in selling something more elusive and difficult to turn a profit on than particular programs. He’s made a product out of Citytv’s attitude and its personality. Innovations are not enough. People have to believe innovations spring from your wanting to do a better job serving them. And so your ideas are not merely new, they’re “revolutionary.” Your building isn’t headquarters, it’s your “Living Movie.” (To make sure this strategy works, be sure to trademark the phrase, as Znaimer has done.) The music video “flow” doesn’t emanate from a studio-cum-office (your Living Movie doesn’t have studios, remember); instead, it’s an “environment.” And always keep the presentation ragged and low-budget enough to position yourself as a plucky, perpetual underdog.

 

By the late 1980s, Citytv’s retrofitted newscast — now consistently finishing second in the ratings, bested only by CFTO — and the station’s growing slate of original programming started to attract attention from abroad. Citytv staff showed visitors around proudly, repeating Znaimer’s commandments in a spiel that was part messianic, part Marshall McLuhan. At the same time, Citytv was looking to expand domestically. But two separate applications for a station license in Ottawa were rejected by the CRTC. Frustrated, it started thinking internationally. “Moses and I have been talking for a very long time about franchising the whole idea of Citytv to other markets,” de Suze says. “It’s been his dream. I’ve tried to help him realize it.”

 

The first major overseas attempt was launched in 1991, when CHUM and Znaimer headed a consortium that applied for a new channel license in the UK. Their partners included Time Warner Inc. and Sony Columbia Pictures Entertainment Inc. in the US. Citytv London was to be the UK beachhead, then Citytv Manchester and other affiliates would form a web across the UK that would be known collectively as Five TV Ltd. However, early in 1992 the UK’s broadcast regulators ruled Five TV’s financial setup insufficiently solid, and turned the bid down.

 

The Five TV wipeout taught Znaimer a lesson that he had already learned at home — established licensing protocols were expensive, time-consuming and subject to bureaucratic caprice. It would be smarter, where possible, to cut a deal with a foreign partner that already had the license, then sell Citytv technique and attitude without having to jump through regulatory hoops. And so the idea of licensing its format came into being.

 

The launch of what would eventually become MuchaMusica in Argentina was an early step. “It evolved out of three or four guys getting MuchMusic tapes from Canada, editing out the commercials, then sending out 100 copies to cable systems,” Kines says. That was in 1992. The “guys” were from an outfit called Canal Joven SA (“Youth Channel”). Their next step was to get a camera and hire their own VJ — and the Argentinean Power 30 was born. “Then,” says Kines, “it was, ‘OK, we can get a building, move in, build a control room and do original production.’ It’s just grown and grown and grown.” Part of that growth included CHUM buying 26% of Canal Joven in late 1994.

 

Kines contrasts their strategy to that of US music-video giant MTV: “They’ve taken a global approach: ‘We’ll take a continent, not a country.’ We know some people who were approached [by MTV], and apparently it was like, ‘You want it? It’s going to cost you this much, and here’s what you’re going to get. You want it or not?’ We’re looking for the right partner, someone who’s simpatico with what we’re thinking and our philosophy of TV, rather than someone who just has X million dollars to plunk down.”

 

Despite the fact that de Suze is American, one place where the Citytv esthetic has so far failed to catch on in a big way is in the US. At least a couple of stations have tried to copy it, mind you, only to find that duplicating it is tougher than it looks. Three years ago, for example, a contingent from Chris Craft Inc.’s independent KCOP-TV in Los Angeles visited 299 Queen St. W. The Americans scrutinized the setup, listened attentively to the Znaimer koans repeated by Citytv devotees, then went home to redesign their newsrooms, mobilize their anchors and wait for a ratings boost. Meanwhile, a CBS affiliate in Seattle, KIRO-TV, mounted a similar “unauthorized” bid to ape the Citytv style. The result in each case was the same: viewers rejected the transplants and the clones crashed.

 

“In Seattle, the newspapers slammed the KIRO set before it was even unveiled to the public,” says TV consultant Don Fitzpatrick of Don Fitzpatrick Associates in San Francisco. “They spent about a bazillion dollars on this elaborate three-story set. There were camera angles everywhere. It was just really busy. They had one anchor who seemed comfortable with it. That guy — Steve Raible — was a former player with the [National Football League’s Seattle] Seahawks, so he was able to maneuver through it. But other people had difficulty. In Los Angeles, the KCOP set was too sterile. It looked more like an insurance office instead of a TV station.”

 

Another big problem, according to Fitzpatrick, was that both stations used the same shooting and cutting styles they always had; they had tweaked some of their presentation without changing their thinking. The bad fit between a new coat of paint and an old structure drove viewers away.

 

Still, Citytv’s style may yet turn up in the US. Tapp and Kines tell stories of US visitors who continue to check into Toronto hotels with video recorders and tape Citytv’s programming off the air surreptitiously. “I’m happy for them, and I’m happy for the hotels,” Kines says. “But they’re never going to succeed as well as they could if they’d just come to us and say, ‘Hi, we love what you’re doing and we’d like to work with you.’”

 

Znaimer, true to form, prefers a broader analysis. “People are used to paying for programs. But the construction of a TV channel is no less a script than that of a great screenplay or a book, and you pay a royalty for it; it’s intellectual property” he says. “Once people see the difference — it usually takes a trip to Toronto — they’re more than happy to go the royalty route, because it gives them an integrated know-how transfer instead of a piecemeal arrangement. I’m not saying that no one else in the world will be able to craft a news show where the guy walks and talks and chews gum all at the same time. But it still won’t make it Citytv.”

 

When you add in MuchMusic’s availability via cable in parts of the US and Mexico, Znaimer can now lay claim to a half-dozen beachheads in his bid to turn his brand of TV into an alternative global archetype. Ironically, as that effort expands, Znaimer is also making headway within Canada. His most recent vivid success is Citytv’s transformation of CKVR, which was, until last year, a backwater CBC affiliate. The New VR’s territory covers a sprawling area north of Toronto that includes vacation homes, resorts, farming towns and “exurbs” inhabited by folks who work in the city. Nobody would have thought the region had an identity. Yet Citytv strategy has found and presented one. “We just did what we had done in Toronto,” Znaimer says. “Which was start taking a million pictures of all that energy, all that reality, all that curiosity and oddball behavior, which is the people of that place.” In the nine months since the New VR was launched, the number of viewers has more than doubled.

 

Lately, Znaimer has also been spending a lot of time in Vancouver and he makes no secret of the fact that he’d like to get a version of Citytv up and running in that West Coast market. Ultimately, he sees his expansion plans both within and without Canada fulfilling the same dream. “My ultimate secret plan is to be able to stitch together some kind of independent system of units called Citytv,” Znaimer says. “One of them is in Toronto and maybe — God willing — one will be in Vancouver, and then one in Denver or Atlanta or wherever we can get one going in the US, and a couple in South America and a couple in Europe.”

 

Should this come to pass, don’t expect to see the emergence of any Citytv monolith. “They won’t speak with a single network voice. They’ll each talk the local language,” Znaimer says. “Their job will be to reflect the locale that they find themselves in.”

 

Like any great exporter and marketer, Znaimer has spotted an opportunity at precisely the same time he has a product to exploit it. The crowded cable dial that has been a fact in Toronto since Citytv’s 1972 launch is just now becoming familiar in other parts of the world. Citytv’s understanding that the most loyal chunk of the audience is more valuable than a bigger but more fickle segment is only just starting to make sense — and money — now. “They are today where we were 20 years ago,” Znaimer says of his potential international clients. “You can make a global business out of local TV. There is a place in just about every sophisticated city in the world for an uptempo, more informal, more progressive kind of rock ’n’ roll TV station. There is, buried in that thought, a very significant business.”