Inside Super Channel’s post-CCAA filing programming strategy

Following its parent company's creditor protection filing, COO Donald McDonald said the company had to terminate programming licences to survive. Now, it's looking to rebuild.
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Earlier this week, Super Channel announced it had acquired a new U.K. drama, Close to the Enemy, a seven-part series set in the aftermath of WWI.

The series is the first picked up by Super Channel since its parent company, Allarco Entertainment, filed for creditor protection in May. Allarco is still under CCAA protection, with the Court of Queen’s Bench of Alberta recently granting an extension of the stay of proceedings to Feb. 2, 2017.

At the time of its initial filing, Allarco stated it was locked into 135 program licence agreements, and that it would disclaim – or terminate – a number of those agreements, returning the programming to the licensors.

In a June 13 affidavit, posted to court-appointed monitor Pricewaterhousecooper’s website, Allarco stated it had “disclaimed 59 of [its] 135 license agreements,” which it said would save the company approximately $1.5 million that month. Since then, the company has confirmed it has now disclaimed 96 contracts in total, from U.S. and Canadian companies.

Donald McDonald, chief operating officer and executive director of finance and administration at Allarco Entertainment, told Playback Daily the company had to terminate these programming agreements to keep the Super Channel afloat.

“We had to disclaim content to right the ship as far as bringing our programming costs in line with our revenue. So we had to go and make those tough, tough decisions to disclaim certain contracts,” he said. “We were at that point insolvent. We could not meet those monthly payments of the programming contracts.”

The news came as a shock to many in the production community. In the past year and a half, Super Channel had ordered and produced Canadian projects such as New Metric Media’s What Would Sal Do?, which was slated to air this year; Nomadic Pictures’ Van Helsing, which has since been renewed for a second season on U.S. net Syfy, but has yet to find an English-Canadian broadcast home for season one; as well as a second season of international copro Versailles, from Montreal’s Incendo and Canal+, Capa Drama and Zodiak Fiction. In June, Super Channel informed its subscribers that it no longer had the broadcast rights to the series. While Incendo has signed license agreements with Bell and Rogers for season one, a deal for season two has not been finalized, according to Incendo.

After its initial CCAA filing in May, Super Channel was not acquiring new content, McDonald said. But in an Aug. 8 affidavit, the company wrote that, to rebuild its subscriber base, it needed to purchase new programming during the CCAA process. Failure to do so, the company argued, would result in a further erosion of its subscriber base.

McDonald said Super Channel is now once again “open for business” and looking to acquire new original content from Canadian producers, though the channel must now be more careful with the content it acquires. “We have to make sure it’s the right content for our service and for our viewers. We are very excited and working with the Canadian production community, and we’ve been doing that for a very, very long time. The unfortunate part is we got way, way over-extended in our commitments and CCAA was the only alternative, short of going into bankruptcy,” he said.

McDonald added Super Channel has developed a programming acquisition committee that reviews programming as a group and decides if and how it will proceed with an acquisition. He said the committee is looking to find the right balance of movies, documentaries and series.

“We have to buy what we can afford and we have to buy the right content that we feel is going to be watched by our viewers,” he said.

Those viewers, he said, are typically over the age of 45 and part of a two-income family, though the channel is looking to expand its demographic reach.

McDonald stressed, however, that Super Channel’s problem has never been attracting subscribers – it’s been keeping them.

“We have a big hole in our consumer marketing side,” he said, adding the company has since hired a director of consumer marketing whose sole goal is to retain customers. “The big thing with our subscribers, the people that leave us, they may have had the service but they may not know what we really have. We need to find ways to get in front of them to let them know we have some really great series, really great movies. We have to develop the means to get that message out to them, so they can get excited about what is on Super Channel.”

He said that because of the company’s limited marketing dollars, its looking to work with cable and satellite companies’ marketing departments to engage subscribers.

Ultimately, McDonald said Super Channel is looking forward and while it has “deep regret” that it had to disclaim programming licences, the company is now planing for the long-term. “We are looking at the way we deliver our content and the way that we engage with our subscribers to ensure that we’re going to give them the best value for the service,” he said.