TABLE OF CONTENTS Mar 2005 - 0 comments

Tier Two Turns Ten

A decade of dance, divas, and discovery

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By: Laurel Hyatt

Has it really been 10 years since Canada took a giant step towards the 500-channel universe with the launch of the second tier of specialty channels? We almost take them for granted now, the eight networks that went on the air on Jan. 1, 1995: Bravo!, Canal D, NCN (now CMT Canada), Discovery Channel, Life Network, RDI, Showcase Television, and WTN (now W Network).

Yet their launch was significant. It marked a time when the country's television system started veering away from the more generalist channels that characterized the earlier waves of specialties -- such as news (Newsworld), sports (TSN), and music (MuchMusic) -- and began carving up programs and audiences into smaller, more targeted pies. Consumers, of course, had eight more reasons to subscribe to specialty services, which made distributors rub their hands in glee.

Soon after they were born, the channels grew almost immediately, some of them experiencing huge growth spurts in subscribers, audiences, and advertising revenues. While that has largely settled down, these networks continue building on their success with larger programming budgets and more original, innovative shows.

In TV "dog years," these channels are young adults now with a proven track record and oodles of promise for the future. Some have even become parents, giving birth to analog and digital channels with the same brand.

For the whole tier, "it's just a growth story," says Norm Bolen, executive vice president of programming for Life Network and Showcase (and Alliance Atlantis Communication's other specialty networks). "There's momentum and it's not stopping and there's no reason for it to stop."

The channels helped spur the popularity of specialty stations, to the point where in the fall of 2004, total TV viewing by Canadians was 52% to specialty and 48% to conventional broadcasters, Bolen points out.


The journey to success wasn't easy for many of the channels. For example, there was opposition from some arts groups that the licence for an arts and culture channel went to the "dirty rock 'n rollers" at CHUM, says Paul Gratton, who's been head of Bravo! from the start. To stave off a threatened appeal to the federal cabinet for the CRTC's awarding of the licence, Gratton and Moses Znaimer met with the culture minister of the day to convince him they were serious about an arts channel. "We were brought in this world in a swirl of controversy," Gratton recalls. Today, no one would question that Bravo! isn't an earnest promoter of the performing arts, albeit one with some of the trademark CHUM cool. Bravo! is "an oasis of intelligent programming in a 100-channel universe," he says.

The Discovery Channel raised eyebrows when it went to air immediately with a daily science show. "People thought we were nuts. I had scientists say to me, 'you're going to run out of material,'" says Paul Lewis, president and GM of Discovery in Canada. Today, Daily Planet lives up to its name and is shown on Discovery channels in the U.S., Latin America, Spain, Portugal, and later this year, in Asia.

Many also questioned the need for lifestyle shows on the Life Network, and alternative films on Showcase, says Bolen. "The naysayers were very negative about the market acceptance of these channels," he recalls. "They've been proven wrong."


Their licences require the channels to stick to an overall genre, but many have undergone programming changes in the last decade.

One of the most noticeable transformations has been WTN, which relaunched as W Network in 2002 under the new ownership of Corus. Once the butt of jokes on Air Farce and This Hour Has 22 Minutes that it catered to aging feminists, the network moved away from shows about women towards shows for women, including lifestyle programming, U.S. and Canadian drama series, and movies. "In research studies, women told us that WTN felt too earnest, old, and outdated, that they wanted better programming and a modern brand image to make it more appealing to Canadian women. So that's what we delivered and we continue to build on," says Susan Schaefer, vice-president marketing of Corus Television. One strategy is to air drama series that appeal to wide audiences, such as Gilmore Girls, Judging Amy, and Nip/Tuck.

CMT Canada also underwent significant changes, morphing from virtually a 24-hour-a-day country music video channel to one reflecting the lifestyles of country fans, with sitcoms (Reba, Dukes of Hazzard) and dramas (Little House on the Prairie) that pay homage to the viewers' family values. It also produces Canada's only daily country music lifestyle show, CMT Central. A couple of years after it launched as NCN, the channel was renamed CMT Canada, and it eventually fell under the ownership of Corus as well.

CMT Canada is still true to its roots as a "safe" environment. "It's honest, it promotes family values, it's cozy, it's warm, it's home," says Casey Clarke, director of programming and production. "For instance, you will never see a series like NYPD Blue or CSI on CMT."

In its early days, Bravo! relied heavily on the CBC and National Film Board archives, rebroadcasting such classics as Chrysler Presents, a series of live variety and performing arts shows shot in Toronto in the 1950s by the CBC. One memorable episode featured Edith Piaf, who "gave an incredible heart-wrenching performance" despite being reportedly drunk on stage, Gratton says.

Bravo! soon moved to the 1990s, airing more scripted programs (such as Law & Order) that bring audiences to its high arts programming, such as the Canadian opera called Toothpaste, and its internationally acclaimed dance shorts. Winning the rights for Sex and the City about six years ago was "a critical turning point" for the channel, Gratton says, introducing new viewers to the network. It also commissions original programs -- about 100 new shows a year of various lengths and complexity, including the new Bathroom Divas, a Canadian Idol -- like talent search for amateur opera singers. Bravo! has stuck to its arts and culture genre while similar channels in the U.S., such as A&E (arts and entertainment), have drifted away, Gratton says.

Showcase was once a much-needed second window for acquiring Canadian independent films. Today, it still sticks to its alternative roots, with its "television without borders" slogan, airing more than 40 hours of original comedies and dramas this year, such as the cult hit Trailer Park Boys, along with Bliss, Kink, and Naked Josh, to name a few. Last year, Alliance Atlantis spent $22 million on Canadian dramatic programming, mostly for Showcase, Bolen says. It also shells out the bucks to compete with conventional broadcasters and other specialty channels to get rights for foreign hits such as Six Feet Under and Curb Your Enthusiasm.

Discovery went from being "the monkey channel" to showing more programs about the science of everyday things, which has doubled its audience so that it's now the most-watched non-sports specialty service, Lewis says. "People are starting to tune in because they're saying, 'Hey, this isn't just a channel for science nerds,'" he says. "That's really been the key to our growth is to constantly reinvent ourselves. Being a science channel, you know that you either evolve or you perish."

Along the way, the quality of programming on tier 2 channels improved as audiences and budgets grew. The bar is high. Viewers now expect the same level of production values as on conventional TV, Bolen notes.


At the start, most of the tier 2 channels survived on subscription revenues. Today, Life and Showcase, for example, are now half financed through advertising. Where conventional broadcasters deliver a bigger reach, specialty channels present an "environment" with a loyal, targeted audience, which is attractive to more and more advertisers. "We've had very robust sales results" with the tier 2 and other specialty channels, Bolen says. "Showcase is quite often sold out in key periods."

Turning from a country music jukebox into a lifestyle channel has brought new advertisers on board CMT, such as personal care products and automobiles, says Brian Bolli, vice-president of sales. "Despite the fact that CMT doesn't reach the levels of say a TSN in terms of audience performance, because we are truly very niched in that regard, we do extremely well relative to sales volume and sales results. We've actually had substantial growth in the last couple of years in revenue. I couldn't be more happy with the performance of the network."

Still, its homey image will mean CMT "cannot sell Porsches," Bolli knows. "We're mainstreet, we're not Bay Street."

CMT gets exposure by airing a companion station on the MaxTrax subscription music service (which is also owned by Corus), producing a country top 20 show on over-the-air radio stations, and selling compilation music CDs in stores. "We pretty much want to own the country lifestyle market," Clarke says.

Bravo!, not surprisingly, has a rather discriminating audience among its 6 million subscribers, even though viewers are getting younger thanks to hipper shows. "If you're selling a high-end car, for example, it's probably prestigious to place your advertising in the opera of the month as opposed to a hockey game, depending on the car you're selling," says Gratton, the channel's vice-president.

Since its relaunch, W Network has seen an 80% increase in audience among women 25 to 54, and a 75% boost among women aged 18 to 49, moving from the number 10 specialty network for women to number one, Schaefer says. W's ad revenue has grown 10 times since 1996.

RDI has a much different story than the other channels that launched at the same time. It is carried on basic, ensuring an enormous subscriber base: it's the most-carried French language network, with a stronghold akin to its CBC sister network, Newsworld. RDI is now watched by some 500,000 English speaking viewers. The channel declined an interview request as it's undergoing a reorganization and rebranding at the moment.


The tier 2 channels were so successful, some hatched spinoff channels that themselves have grown and matured.

Life's home and garden and food shows were so popular, Alliance Atlantis launched HGTV Canada and The Food Network in the fall of 1997. Showcase splintered off two diginets, Showcase Action and Showcase Diva, now the number 1 and 2 most watched digital channels, Bolen says.

Discovery branched into two diginets: Discovery Civilization and Animal Planet, which was one of the first diginets to break the 1 million viewer mark, Lewis says.

Broadcasters are hoping to use their brand images to create even more sister networks down the road, they say.


One would be foolish to predict what will happen to the tier 2 or any specialty channels in the next 10 years. But all expect the growth to continue as they play up their niches.

The free preview of the entire digital tier in January was a resounding success, with a reported 9.6 million Canadians tuning in during the "31 days of great TV" campaign to see what they've been missing. "Literally, digital boxes were flying off the shelves. People couldn't get digital boxes at one point because they had sold out," Lewis says.

All specialty channels will have to embrace high definition production in order to compete. "HD will be a very important factor in our future. We want to greatly expand our inventory of HD programming," says Lewis. Discovery has an in-house production company, EPI (Exploration Production Inc.), which is already producing at least 40 hours of HD programming a year.

Discovery will also be spending its biggest licence fee ever in 2006 as its contribution to the $20-million international production The Race to Mars, simulating a human mission to the red planet.

For tier 2 specialty channels, the television universe is almost as big, and the race has only begun.


Trailer Park Boys - Showcase
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Kink - Showcase
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Susan Schaefer - W Network
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Casey Clarke - CMT Canada
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Naked Josh - Showcase
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Paul Lewis - Discovery Channel
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Brian Bolli - CMT Canada
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