Pay Television

Although undertaken experimentally in Etobicoke, Ontario, between 1960 and 1965, pay television as a major venture was licensed only in March 1982, after a decade of debate. Promoted for many years by the cable television industry for its moneymaking potential, pay television had been opposed by established broadcasters who feared the competition, by telephone companies who resisted cable's proliferation of services and technological advance, and by cultural nationalists. The Canadian Radio-Television and Telecommunications Commission, in 1975 and again in 1978, having undertaken inquiries as to the desirability of introducing pay TV to Canada, concluded that inauguration was "premature." The CRTC believed pay TV would simply constitute another channel for American programming and would undermine the financial base of Canadian broadcasting (see broadcasting, radio and television; television programming).

Nonetheless, under request from the federal Department of Communications in 1979, the CRTC initiated a third inquiry, the Therrien Committee, which duly reported in 1980, recommending that a competitive industry be authorized. The Department of Communications, with a mandate broader than the cultural objectives of the CRTC, has viewed pay TV as a means of stimulating satellite usage and furthering development in high technology industries. Therrien's recommendations were accepted by the government and the CRTC.

In 1982 the CRTC inaugurated a discretionary, pay-per-channel pay-television industry in the private sector. At one stroke 6 services were licensed - a national general-interest service (in English and French), 3 regional general-interest channels, a performing arts service, and a regional multilingual service. Subsequently, additional regional channels were authorized. For all but the multilingual licensee, progressively increasing time and revenue quotas were imposed to be allocated to Canadian programming. However, the CRTC chose not to regulate dealings between the pay companies and either program suppliers or exhibitors (cable companies); likewise, the retail price to the subscriber was left unregulated. In February 1983 the pay services became operational, utilizing satellites to deliver programming to cable systems, which in turn billed subscribers about $16 per month for a single channel (see satellite communications).

Controversies soon broke out anew, however. First Choice, the national, general-interest licensee, announced in January 1983 a joint venture with an American production company whereby $30 million in "adult" films would be produced to help meet Canadian regulatory obligations. Thousands marched and wrote letters to the CRTC in protest (see pornography); the commission then requested the industry to draw up guidelines for self-regulation. In the spring of 1983 it became apparent that licensees could fulfil their programming obligations through "scaffolding," eg, by flowing through preproduction revenues from US sources and counting these as contributions for regulatory purposes.

During 1983-84 the industry faced severe shakedowns as projected subscriptions did not materialize. The arts network, C-Channel, collapsed after 17 weeks; Star Channel, the Atlantic regional licensee, eventually was shut down; the French-language regional service, TVEC, merged with First Choice which was itself refinanced and taken over by a film production/distribution company. Nonetheless, in 1984 a new round of licensing took place as "specialty" channels, which were to combine advertising and subscriber fees, were authorized for satellite delivery to cable systems. Since that time other specialty channels (all-news, religion, children's channels etc) have been licensed as well. In 1987 only 2 of the original pay licences remained, each now afforded regional monopolies: First Choice east of Manitoba and Superchannel. By packaging the movie channel with specialty services, and eliminating direct competition, the pay industry finally began to turn a profit. By 1999 First Choice had become The Movie Network (owned by Astral Broadcasting Inc), which airs as TMN. TMN broadcasts to Ontario, Québec and the Atlantic provinces. SuperChannel (operated by Allarcom Pay TV Ltd) broadcasts to all the provinces west of the Ontario/Manitoba border.

Pay TV is a radical departure from historic broadcasting policy. First, the industry has no publicly owned or nonprofit oriented component; indeed, a competitive structure was immediately introduced with a view to giving market forces important play. Second, highest priority was accorded to increased diversity in production sources and viewing options, to be contrasted with the cultural and political goals heretofore dominant. Finally, with these decisions, it is apparent that communication policy is being formulated increasingly with a view to stimulating communications technology and that cultural concerns respecting the nature of the programming are in decline.