will deliver

100 signals

Montreal: The DTH Canada consortium has given rise to a new direct-to-home television satellite programming company – Expressvu Inc. – which will begin beaming 100 television and radio signals into Canadian homes by Labour Day.

Using dvc technology, Expressvu’s basic tv package consists of more than 50 channels and will sell for $22.95. The extended service is made up of more than 70 channels including 22 pay-per-view channels offering movies (at a cost of $3.95 per movie), sports and special events, plus a package of five premium pay-tv services, expected to cost in the $18 range.

Consumers will need a 60-centimetre, pizza-size satellite receiving dish and set-top box, priced at under $1,000, in order to receive the new dth service.

Expressvu says it will invest up to $55 million in programming and marketing in the next five years. Its programming lineup was unveiled at a Dec. 15 press conference, carried live via Anik E2 satellite from Montreal’s Teleport.

The new service expects its subscriber base to hit 80,000 to 100,000 in year one, climbing to 500,000 by year five.

Expressvu shareholders are BCE Inc. (30%), Tee-Comm Electronics (30%), WIC Western International Communications and Canadian Satellite Communications (30%). wic is the majority shareholder in Cancom.

Astral Communications and Labatt Communications have commited to providing programming to Expressvu and each hold 5%.

Cancom president and ceo Alain Gourd is Expressvu chairman. A president and ceo will be named in January.

The new service will use high-powered ku-band transponders on Telesat Canada’s Anik E1 satellite.

When it was formed last spring, DTH Canada, the working group which gave rise to Expressvu, included Rogers Cablesystems, Shaw Cable and CF Cable TV. The cable companies dropped out last fall ‘when they indicated dth represents long-term competition in major markets,’ says Claude Lewis, the working group’s project leader and executive vice-president of Cancom.

HITS

The cable companies still hold a 50% interest in hits, a resource facility for dth receivers in remote and small cable-system communities.

Expressvu’s English and French program lineup includes all major Canadian tv networks and independent stations, Canadian pay and specialty services, 22 ppv channels, five u.s. networks and authorized u.s. specialty channels and superstations, including a&e, The Learning Channel, The Nashville Network, klta-tv Los Angeles, wgn-tv Chicago, wsbk-tv Boston and wtbs-tv Atlanta.

As Expressvu prepares for its fall launch, a competing service, Montreal-based Power DirecTv, is seeking an authorization for its dth service.

Both Expressvu and Power DirecTv will make written submissions to a government review committee headed by Gordon Ritchie.

Review decision

The Canadian Heritage/Department of Industry committee has been asked to review a crtc policy decision made in late August prohibiting the use of u.s. satellites in the delivery of Canadian dth services. The review guidelines note nafta calls for an integrated telecommunications market, and that ‘from a business perspective, the means of distribution should be as efficient as possible.’

Power DirecTv’s dth proposal calls for the use of DirecTv’s satellite to deliver ppv services as well as the American portion of its program schedule. It will use Telesat to deliver its non-ppv Canadian programming, including the Canadian premium pay-tv channels.

Neither DirecTv nor a second u.s. dth service, United States Satellite Broadcasting, dubbed the first of the ‘death stars’ by the Canadian cable industry, are authorized to operate in Canada.

Power DirecTv is 80% owned by Power Broadcasting and is a joint venture with Hughes Aircraft of Canada, a unit of General Motors. Based in Los Angeles, DirectTv is a 150-video channel operation owned by Hughes DirecTv.

Not a death star

Power DirecTv’s president Peter Kruyt, also president of Power Broadcasting and vice-chair of Northbridge Programming, a joint venture with cbc, says Power DirecTv is not a death star, adding the hope is the service will be in operation in six months.

Because of its ties to DirecTv, Power DirecTv’s bid to launch a second Canadian dth service is attracting strong opposition.

The DTH Canada group has called Power DirecTv a ‘shell company’ set up to circumvent Canada’s regulatory and policy environment.

Kruyt told Playback Power DirecTv has pledged ‘not to offer any services which are not authorized in this countryÉin absolute and strict conformity with the crtc.’

DirecTv satellite

The most controversial element of Power DirecTv’s proposal is its plan to deliver both the u.s. and ppv program components via the DirecTv satellite.

Kruyt says Canadian cable companies pick up u.s. signals, such as cnn, off u.s. satellites for distribution in Canada. He says the proposed service’s Canadian ppv package will be the equivalent of the Expressvu package. Otherwise, he says Power DirecTv’s Canadian ppv proposal is a better deal for film and tv producers, ‘because Canadian programming will be delivered throughout North America.’

Andre Bureau, vice-chairman, president and ceo of Astral Broadcasting Group, says Power DirecTv was set up to service dbs distribution of u.s. programming in Canada. He says Power Broadcasting’s 80% equity share doesn’t mean a corresponding level of profits will stay in Canada.

No Canadian services

Bureau says the u.s. dbs services do not offer any Canadian ppv and pay-tv services.

‘Even more dangerous,’ he says, ‘is that DirectTv can say to the u.s. programming services, `Don’t sell to Canada. We’ll buy the North American rights.’ This would deprive Canadian pay-tv services of access to popular u.s. movies, he says.

In a November submission to the Canadian Heritage standing committee on the Canadian broadcasting system, Kruyt and Power DirecTv chairman Joel Bell said the crtc’s exemption order is ‘tailor-made’ for the DTH Canada consortium (now Expressvu). They told the committee the newly authorized Canadian service is ‘protectionist’ and will not be able to control the illegal gray market, estimated at about 500,000, ‘because it cannot offer all of the u.s. specialty channels or the extensive pay-per-view services that make DirecTv so attractive.’

According to Power’s submission, its dth proposal ‘neither attempts to block the inevitability of DirecTv nor ignore its existence – but rather harnesses the system to add Canadian services.’

Bureau says the Canadian broadcasting system exists because Canada has historically adopted regulatory policies favoring Canadian presentations whenever feasible.

He says if a service like espn were able to acquire North American rights (to all major sports events), a now-entrenched Canadian service like tsn would not exist.

‘ytv could be wiped out if Nickelodeon is allowed in, and Disney would do the same thing for Family Channel,’ he says.

Bureau says authorizing DirecTv in Canada would mean the end of u.s. program sales to domestic operators, ‘the elimination of the bothersome Canadian middleman, and increasing (u.s.) profits, even if the market is small.’

‘Insidious argument’

Bureau says Power DirecTv’s suggestion that its authorization is necessary for the elimination of the growing Canadian gray market, ‘is one of the most insidious arguments I’ve heard in a long time, an unprecedented smokescreen.’

He says authorizing Power DirecTv will lead to ‘the worst gray market everÉbecause all the non-authorized services will have become authorized.’

Kruyt replies that the use of the DirecTv satellite for part of the proposed Power DirecTV service ‘would benefit consumers and create savings of hundreds of millions of dollars over the estimated 12-year life of a satellite.

‘In other words,’ he says, ‘if the u.s. services had to be uplinked to a Canadian satellite, that is extra cost that would have to be passed on to consumers and/or money that becomes unavailable for programming.’

Lose clients

Bureau says if Canadian dth program services are allowed distribution on u.s. satellites, Telesat Canada will lose clients and prices will go up.

‘Clients will be unable to afford the cost of satellite delivery and Canadian services will be gradually forced to migrate to u.s. dbs services. And only Canadian satellites cover the entire Canadian territory.’

Kruyt is frank about ‘the trade-off for Telesat,’ which he says loses on the u.s. and ppv pickup but has a net gain because a new Power DirecTv dth service would represent new business.

Power Broadcasting and cbc are equal partners in a joint venture called Northbridge Programming, which has developed two services available on DirecTv, Trio, an entertainment service, and Newsworld International.