With applications just filed for stations in Alberta and Victoria and regulatory approval for its bid to take control of Quebec-based ckmi-tv still to be had, the future of CanWest Global Communications waits in the wings.

At this point only one thing is sure: come hell, high water, b.c. court rulings or crtc conclusions, Izzy Asper, chairman and ceo of CanWest, is pulling out all the stops this year to achieve his goal of establishing a third national Canadian television system.

This is, he says, ‘the pivotal year for CanWest Global.’

Last year, as it happens, was not. Consolidated revenue for fiscal ’95 ran up 23% over 1994 to $337 million, but the high points were eclipsed by disappointments, including the loss of its $79.5 million bid for the fifth British television network, rejected on quality program considerations in spite of the bid being double that of the two next highest contenders, one of which took the prize.

Its pioneering stake in La Red, a Chilean broadcast service, was put on the block after projected revenues failed to materialize, and most recently, its $636 million hostile takeover of WIC Western International Communications’ holdings fell prey to the rulings of the b.c. provincial court, which decided wic’s coattail provisions hadn’t been triggered and nullified any hopes Asper had of a shortcut to a national network.

But as QVC Network chairman Barry Diller said when he lost the battle for Paramount to Viacom: ‘We lost. They won. Next.’ CanWest has turned to tackle the Canadian market with a vengeance. On the table is a $100 million Canadian expansion strategy which ‘will mean millions of new dollars put into spending for Canadian drama’ should the CanWest team bring it home, Asper says.

He won’t yet divulge the specifics of the benefits package for Canadian production in the offer, which is contingent on all applications being approved, but says it will create new monies in children’s, variety, news and information programming in addition to drama.

But what he is willing to discuss are the challenges facing the Canadian broadcast industry, the role of the crtc, and why exactly CanWest’s new $1 million-an-episode Canadian series, Traders, has been slotted Thursday at 10 p.m. to rival er.

For any conventional broadcaster, ‘the challenge is relevance,’ says Asper. Relevance is directly related to the issue of market fragmentation and distinctive programming. If the audience d’esn’t know that it can get unique shows from a particular station, broadcasters in a multichannel universe are cooked, he concludes, adding that having the financial means to produce distinctive programming like the Atlantis Communications-produced Traders, is key to the CanWest expansion.

‘The reason CanWest is going international is that we have to have a critical mass of distribution over which to be able to generate the cost of producing original productions.’

Also key to survival for Canadian broadcasters is maximizing the craft of programming, scheduling, and promotion.

He bristles at the suggestion that CanWest has made its mark thus far by having the biggest inventory of all the major broadcasters of high-profile American programming like Seinfeld, Friends and Frasier.

Rate better

‘Our American programs rate sometimes two and three times better per capita than they do in the States. That’s not just the programs. It’s promoting and packaging and scheduling. It’s balance, alternative niche programming, how warm and identified we’re able to make the audience feel with us, how we lead you into the news and the next program, how we build the evening. It’s not just luck in picking the top American programs.’

Whether all the promotion in the world will drag over to Traders what some nights has been a 3.4 million Canadian viewing audience for er is yet to be determined.

‘It’s a pretty gutsy move because we have no intention of blowing our brains out financially after spending this kind of money on production and promotion. But our theory is that the er constituency is not 100% of the viewing audience; it’s 15%. We think we can turn the remaining percentile solidly behind the show as a first-class alternative to er.’

Responding to media criticism of the choice, Asper admits the pressure is on, but says sometimes you have to take on the big guns to get the audience.

Sacrificial lamb

‘You have to agree that Thursday at 10 p.m. is a fabulous slot. People are watching television. The question is can you take them away from er. But don’t ever use the word ‘sacrificed’ with Traders. The sacrificial lamb is Izzy Asper. It’s (Global Systems president and coo) Jim Sward and (president of Global Television and CanWest Eastern operations) Kevin Shea and (vp, Canadian productions) Loren Mawhinney. We’re the ones betting we’re grown up enough to make this work and this show is going to get a fair shot at success.’

The broadcasters have as much at stake in the success of a Canadian show as the producers, Asper adds.

‘It’s a part of the new CanWest as a generator of national, quality, distinctively Canadian programs which I say are the long-term salvation, the prosperity, of the Canadian broadcasters.’

Asper says what will also add to the long-term survival of the broadcasters is the crtc correcting what he calls the injustice of cable companies distributing the terrestrial broadcasters’ signals without paying for the right.

Conventional broadcasters are bearing the cost of ‘more than 90% of the money spent on Canadian programming’ and ‘the cable companies have sold their services on the backs of the broadcasters for decades,’ he says. ‘People bought cable as a way of improving their reception of the conventional broadcasters and we should be getting a fee for our signals. Or they should give us the right to withhold them. That’s what the regulator owes us.’

The other role for the crtc, which Asper says the industry needs ‘for many reasons,’ is to greenlight all broadcasting service applications that have the financial means to make a go of it.

Two years ago, Asper walked into the Australian Broadcasting Authority and left that same day with 20 network licences for the territory. It didn’t mean necessarily that they were going to get them off the ground, ‘but they were well-financed, well-considered, and the applicants were reputable, and that was all the regulator had the right to know. Then it was up to us to see if we can acquire cable space and decide what we’ll charge for it and then let the market decide, not the regulator.’

CanWest, on its three applications for new specialties Prime tv, Kids tv, and Mystery Channel, will be arguing that the crtc should license every credible and financially sound application, but Asper isn’t convinced they’ll be successful. ‘It isn’t likely to happen this round. It’ll happen eventually.’

In the meantime, CanWest is dealing with several challenges including a lawsuit just filed by wic which is claiming breach of contract of a program supply agreement. Asper says acquiring wic is no longer part of the grand plan for a national network, but industry analysts are speculating that cutting off wic’s program supply is another strategy to weaken the unity-challenged company and suspect another takeover bid could surface.

U.K. market

Farther from home, the u.k. market is still to be tackled with former uktv ceo John Fairley, CanWest’s man in England, scouting new investment opportunities. The Chilean experiment failed for several reasons, including an immature advertising market capping at $250 million, but Asper still pegs the Spanish-speaking population as the third best foreign investment opportunity in the world for Canadian broadcasters. England is number one and the u.s. number two. ‘There are two new networks starting in the States. They’re high-risk propositions but with risk can go ruin or reward.’

But clearly, international opportunities will exist on the periphery while CanWest focuses on its Canadian aspirations this year. Repeatedly discouraged from entering the Quebec market and flat-out denied its application for an Alberta licence in 1993, Asper is hopeful his plans for a national network will find favor this year. The benefits package combined with what he believes is a ‘change in the regulator’s attitude and policy thinking,’ leaves him ‘optimistic.’

He’s less so about the long-term relationship between the broadcasters and the independent producers.

‘In the short term it’s good. In the long term, I have concerns. I think you’ll see more broadcasters owning their own productions.’

With Canadian production companies already in the specialty broadcasting business, the lines are blurred and the gauntlet is down, he continues.

Won’t forget

‘On a global basis, how do you think I like it when my big supplier Fox becomes my competitor in Australia? That’s what happened when Rupert Murdoch bought into Seven Network and took all his programming away from me, from Network Ten. Well, thank-you very much. If you think I’m going to forget that, you’re wrong. I think producers should be producers and not compete with their customers, but if they’re going to do it, fine. I’ll become a producer.’

The statement is tempered a little by his belief there will be more than enough to go around if the industry develops as he believes it will over the next decade. It was 50 years last month that the fcc licensed the first television operation and 150,000 people crowded into Gimbel’s department store to watch the first black-and-white television.

‘The world we’ve been a part of for the last 50 years has seen more development than the previous 200 and I credit television, advertising and mass marketing for raising the standard of living to heights no one imagined. All of us, broadcasters and the production people, can be very proud of what we do for a living. Television has a voracious appetite for programs, and I dare say we’re about to see even faster evolution and change.’