TABLE OF CONTENTS Jun 2005 - 0 comments

A diamond in the rough times

A year after launching, Ethnic Channels Group says it's still on target to bring the world to Canada

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By: John Bugailiskis
2005-06-01

Quietly last summer, The Ethnic Channels Group (ECG) launched four channels with Rogers Cable in Toronto. Led by president Slava Levin, a Canadian who has over 11 years of experience in the television game in the U.S., Canada and abroad, Ethnic Channels has launched four channels (RTVi - Russian, Inter+ - Ukrainian, SBTN - Vietnamese and ECG Filipino).

Each is a digital category two channel in partnership with the foreign broadcaster, meaning ECG must also provide 30% Canadian content as well.

Levin has worked in this market for some time, delivering ethnic channels to the likes of Echo Star and DirecTV when he worked for various companies in the States. Levin still calls ECG a "diamond in the rough," because it's the "only company with multiple ethnic-language licenses from different language groups."

Cablecaster sat down with the dynamic president of ECG to discuss where the company is a year later, the impact of the CRTC's policy change on third-language services and the long-term picture. The interview took place at ECG's north Toronto headquarters which is still being converted from a bank into a state-of-the-art facility for programming and broadcast.

Cablecaster - It's now nearly a year since you launched. What has happened during that time?

Slava Levin - June 23rd will be a year from the day that we originally launched our four services on Rogers Cable. From that date we have grown to an additional three channels. The three new channels were launched in November 2004 so it was a very fast growth. We also in that time received additional licenses from the CRTC so we have a total of 18 Cat 2's for various ethnic languages. We started with a staff of four, today we are at a staff of 14.

We also currently have an additional 35 pending before the CRTC. How has the business and the market changed since we first started?

Dramatically - due to the CRTC new rules and regulations which haven't hurt us but haven't helped us. I'll talk about the CRTC a little bit later on and what my thoughts are. But as far as business we have sustained a steady growth. I can't get into numbers because of issues of confidentiality with our partners such as Rogers and Bell ExpressVu. We completed a deal with CCSA they currently have 94 regional cable operators so hopefully we will get carriage on some of them throughout Canada where there is extensive ethnic population such as Aurora Cable, they have a lot of Polish, Russian, Ukranian and Arabic as well.

C - When was that deal completed?

S - That was in June 2005. We are attempting to work with every cable operator and satellite provider in this country. There are issues that we have run into with the BDU's and again a lot of that is based on the CRTC's new ruling. But foremost everybody has been very perceptive to ethnic channels and to what we have done. The company was started from an idea back in the U.S. of bringing one Russian channel into Canada and it kind of grew into what do you would call -- a conglomerate of various channels.

We are far from a conglomerate but we are probably the largest in Canada today holding multiple language channels and licenses.

I mean we have ATN that distributes south-Asian services - I think they have four or five services up on air but they are specifically one language programmer where we are a multi-ethnic programmer so we are not language specific -- yes of course we could have brought 10 Russian services into Canada -- the question is would we have been in the same position having the same number of subscribers today. I doubt it. So we went after markets that are very under-served in Canada.

Today we are filming and producing our own content. We just recently finished our studio, it's nothing major but it's a studio and it works for us.

C - What types of distribution deals have you arranged?

S - We have signed an additional twenty distribution deals with the various channels throughout the world, we just haven't been able to get them distributed yet -- they are all pending. We have probably the largest selection of channels in different languages. With the 20 that will bring us up to 27 services which will be very close to the our target of 30. Our only drawback is carriage right now - we don't have carriage for all our channels. And one of the main reasons is the band-width issues in this country. It's a big problem with Bell ExpressVu, StarChoice, Look and even cable. Everybody has a band-width issue. For cable it's more of a financial dollar incentive whereas with Bell its more of satellite capacity.

C - How has the CRTC's decision late last year to allow general interest, foreign-language broadcasters entry into the Canadian system impacted on your operation?

S - The CRTC is looking after the best interest of Canadians and the Canadian public. What they have missed in all this is looking after the well being of Canadian businesses. Businesses pay taxes, businesses employ Canadians so that they can afford to watch this programming. We built our business based on the CRTC's rules and regulations.

If you go the various website forums dealing with Canadian television you will see they write a lot about category 2's -- they write they are easy to obtain -- well they are not that easy to obtain. You first have to spend money to get them, number one is the legal expense- you've also have to wait for the CRTC decision, you've got to develop a business plan, obtain proper distribution rights for content. It is not that easy. It is not a difficult process but it is not an easy one. So what has transpired is we built our business under rules and regulations prior to December 16th, 2004 and having those rules and regulations yanked from us I find unjust.

But what the CRTC has done is opened the flood gates -- they opened the door to the cable industry getting more of what they always wanted -- more control. But the new rules undermine all our Canadian businesses starting from Fairchild to Telelatino and me being the new kid on the block it's even harder because the new rules did not provide us with any protection. Fairchailds and Telelatino at least have linkage rules.

We now have to compete directly with foreign services and us having to provide the CRTC with full documentation, logging reports, logging of programms and content, answering to the CRTC why this program was on air if they have a question. Foreign services have nothing. I don't know what the CRTC was thinking when they looked at the rules.

We were never opposed to having any foreign service come into this country. We are not opposed to competing with foreign services we just want a fair playing field. And CRTC did not provide us a fair playing field. Foreign services don't have any reporting to the CRTC, they don't even have to have a staff member in this country, they don't pay taxes in this country, they don't have to do anything.

We are doing this to bring multi-ethnic services that never existed in this country. If more can come in -- great. Why not have multi-ethnic services for each group no matter how small or how big they are. We are not opposed to that, just everybody has to be on the same playing field.

C - What is your opinion on other foreign services like HBO?

S - My argument to the CCTA or to the CRTC or to Industry Canada - let HBO in. Are they any different then RAI?

The Italian community wanted RAI. Telelatino was providing the community with RAI. Just because RAI decided it was time to terminate TLN's agreement and use political pressure to dictate to our government that they need to change our broadcasting policy. The interesting part about this whole RAI issue was that TLN applied and received a category 2 license to launch RAI. It remains a mystery to me why our politician allowed a foreign government to dictate policies changes to them. It is a very confusing time right now within the industry and we speak to everyone in the industry who operates a Cat 2 foreign language service. We are all kind of scratching our head and are baffled.

We have already felt the effects of the new policy change. BDU's have stated they rather launch foreign service as opposed to Cat 2's . What if we can't get carriage because distributors are choosing to carry a foreign service as opposed to Cat 2's could that be blamed on the bandwith problem or could it be used as an excuse. What should we do set up illegal distribution of our channels out of the United States? What's left?

The black market is going to go away but the grey market will always stay. If you are a subscriber and you have a U.S. address you will just get your card in the mail card and ship it to Canada and insert it into your receiver.

C - What have been the positives about launching ECG?

S - The great parts of this business is we get to meet and learn about every community. We get to know what they like what they dislike. We have met with the Philippino's, Vietnamese, Arabic and Russian Community leader. We have met with every Consulate General for every nation that we represent. They are thrilled to have their language or their country be represented in Canada.

Just as an example, our future 3 channels that we a waiting to get launched are Israeli, Serbian, Croatian and hopefully Hungarian in the next little while and with all the negativity around the industry that the regular Joe doesn't understand or doesn't see or doesn't want to know about. It refreshes you. That we are doing something that is unique not just to an average person but this is a Consulate General of a nation that is sitting in our office having a coffee with us saying 'hey this is great.' Let me see if I can get you another channel or let me see if I can help you in anyway, let me see how we can promote you to the community.

We do whatever we can for our communities but we need the support of our country to do a proper job. That is where the company is today. We have matured quite a bit. We realized that our government has kinda slapped us in the face. But we are taking it all with a grain of salt and looking at it very cautiously. We are saying to ourselves ok the rules have changed, let's work within those rules, let's see what we can do. We are disappointed just like everybody else in the industry in how the CRTC reacted.

Photos

Slava Levin with partners Oleg Masliy (left) CFO and vice-president business development and COO Gregory Antimony in the master control room.
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Caption: Slava Levin with partners Oleg Masliy (left) CFO and vi...
Slava Levin
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Caption: Slava Levin
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