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Few Canadians are
holding their breath over the imminent arrival of a domestic direct-to-home
satellite TV service. And marketers are paying even less attention than the
general public is to the phenomenon.
Direct-to-home
satellite television (known variously as DTH or direct broadcast satellites
— DBS) beams encoded signals from a single geostationary satellite to
subscribers on earth. In the United States,
DTH is the fastest-selling consumer electronics product ever. In a little
more than two years, the number of subscribers there has gone from zero to
almost five million, though that’s still just under 5 percent of U.S. households.
In Canada, things
are happening with DTH too. But what exactly is happening depends on who’s
describing the situation. To hear the CRTC tell it, shifty-eyed satellite
criminals are undermining what few shreds of endangered cultural sovereignty
remain intact. Canadian broadcasters bemoan the fact that American satellite
broadcasters are offering programs to so-called grey-market subscribers that
Canadian outlets have already bought broadcasting rights for.
The CRTC has warned
grey-market subscribers that they’re breaking the law if they receive U.S.
DTH signals. They may be complicit in a case of copyright infringement by
receiving programming from a broadcaster other than the approved Canadian
one.
But they’re not
breaking any telecommunications law. It’s legal to own a DTH receiver. It’s
legal to sell DTH receivers and decoders. And, because it’s legal to listen
to radio programming from 50,000-watt clear channel U.S. radio stations,
consumers — understandably — can’t see why there’s any difference when it
comes to television signals.
Add to that the
successive hollow claims that would-be Canadian DTH providers have made over
the last two years and it’s not surprising a grey-market audience has grown.
Every few months, ExpressVu Ltd. of Mississauga, Ont. has boldly announced
its imminent launch of a Canadian DTH service. And when the appointed
deadline arrives...there’s another announcement that Canadian DTH satellite
TV is about to happen.
Milton, Ont.’s
Tee-Comm Electronics has entered the fray in the U.S. under the name
AlphaStar, and is competing against bigger players such as Hughes Corp.’s
Los Angeles-based DirecTV (whose ultimate owner is General Motors) and other
services such as USSB and PrimeStar. But while its U.S. version is operating
and holding its own, Tee-Comm waits for a license from the CRTC, which has
yet to make any ruling on the Tee-Comm application for a Canadian DTH
service.
It’s beginning to
look as though, in Canada, anyway, DTH is the TV of the future, and always
will be.
Small wonder, under
those circumstances, that marketers aren’t paying much attention to DTH. But
they’re not ignoring it completely, either.
“We’re speculating
about if it gets up — and that’s a big if, because there are lots of reasons
to believe it won’t,” says Doug Newell, senior vice-president media buying
operations at Harrison Young Pesonen and Newell in Toronto. “They haven’t
lived up to any of their promises about timing. Will it happen in the next
few months? There’s reason to think it might not.”
“No clients mention
it,” says Ann Boden, president of McKim Media Group in Toronto. “There are
just too many other — more pressing — considerations for them to worry
about.”
Any Canadian DTH
service might be hampered in its chances of success before it starts. The
CRTC has decreed that domestic DTH providers can only carry services already
approved for broadcast in Canada. This effectively limits Canadian DTH
services to duplicating the cable menu.
Most of the
grey-market subscribers are hooking up illicit DTH rigs as supplements to
their cable connections, in order to watch U.S. networks such as Comedy
Central, HBO, Showtime, Turner Classic Movies and a welter of regional
sports carriers. Why would any TV viewer pay more than $1,000 for hardware
plus another $30 monthly for the privilege of duplicating the cable menu?
Leaving that
conundrum aside, Doug Newell says penetration, carriage and programming are
all unknowns being monitored by marketers: “If it does happen, it will
really depend on the penetration, and the biggest factor will be carriage.
Will the stations that are offered emanate from Canada or from elsewhere? If
they are Canadian and have Canadian content, then it will be business as
usual. If they don’t, then they’re going to eat into television usage by
advertisers, and have a serious effect on our ability to communicate with
our customers.”
Newell points out
that at current levels, DTH in the U.S. has yet to reach 10 percent penetration in
a heavily cabled nation. For media buyers, VCRs weren’t a threat or an issue
when they were only at 10% penetration, he says, adding that this perception
could change if the penetration percentage rises.
But the grey market
keeps growing. And that spells trouble for outfits like ExpressVu. With each
broken promise about a launch date for a domestic DTH service, more
Canadians get tired of waiting and order one of the U.S. services. Canadian
hardware DTH retailers advertise on television. Despite its threats to the
contrary, there’s nothing the CRTC can do to prevent them selling the dishes
or the decoders.
Newell hopes that
will change.
“The big issue,
ultimately, is: will the government be able to regulate it or won’t the
government be able to regulate it?” he says. “If the government is able to
regulate it, then it won’t matter. It’ll be Canadian. If the government
isn’t able to regulate it and the decisions are being made south of the
border, then we’re all in deep shit. I think the government can regulate
it.”
“The issue is when
we’re going to decide in this country what we’re doing,” says McKim’s Ann
Boden. “It’s been so up and down and on and off: ‘yes, you’ve got a
license,’ ‘no, we’re not going on.’ There is so much confusion it’s hard to
take a position when we just don’t know what’s going on. Wait and see.”
Boden has two dishes
at her country home, she says. “And I love them, because that far out of
town I can’t get cable.” But she’s less sure the industry will really take
off in Canada outside of people whose business or obsession makes them
insist on having complete access to all available forms of TV.
There is currently
some cross-border buying on traditional broadcast outlets, but that buying
can’t be extrapolated to the satellite business. As Doug Newell explains, it
has to do with relative scale: “We buy time on Fox in Buffalo for our
clients not to reach people in Buffalo,
but to reach people in Toronto. We can do
that because Toronto is a lot bigger than Buffalo. We can’t buy the United
States to cover Canada. We cannot afford to compete with the Americans if we
have to buy American signals that are bigger than our signals.
“If we can’t control
it, we turn all of Canada into Windsor, Ontario. What happens in Windsor?
Advertisers don’t buy it. They count on the spill from Detroit.
That’s what’s going to happen to our market if we can’t control it.”
As frightening a
prospect as that might seem for broadcasters, media buyers and advertisers,
it’s still largely hypothetical.
“There are so many
other things that that is just very low priority right now,” Boden says.
“That doesn't mean that in 1997 it might not become high priority.”
But don’t hold your
breath. |
