By the old broadcast model, the digital rollout appears to be in early trouble as 50-odd channels vie for a miniscule slice of viewers.

But many of those behind the new channels are quick to point out the broadcast model for digitals is much closer to magazine or radio. Viewed in that light, the numbers may not be nearly so bad.

Either way, with a four-month free preview period ended Jan. 7, Canadian broadcasters will have their work cut out for them in the coming months.

Certainly Canadian Cable Television Association president and CEO Janet Yale believes this to be the critical time for diginets. Up till now, most digital subscribers had yet to decide where to spend their dollars, she says.

‘Now is really the time when the fun begins. Now the real marketplace starts to operate and we’re going to start to see what consumers want,’ Yale says.

The job at hand for the broadcasters is to attract a pool of approximately 2.5 million Canadian households with digital capabilities to subscribe to their channels.

A second, and perhaps more pressing, early challenge is to entice as many as possible of the remaining 9.6 million TV homes to acquire set-top boxes or satellite dishes in the first place.

The question remains how?

Current diginet viewing levels stand at about 2% of all TV households in Canada. Certainly no one disputes the fact that even the most successful digital channels saw numbers during the free preview more in line with the low end of analog specialty channels.

The top-rated channel, according to new Nielsen Media Research numbers, continues to be CanWest Global-owned Lonestar with 13,600 viewers (average audience per minute). No other channel in the top 10 even breaks 6,000.

This has led to a deluge of speculation on the failure of the digitals.

Jim Shaw for one continues to pop up in press reports as the leading voice of dissent. Shaw not only holds majority stakes in carriers Shaw Communications and DTH service Star Choice, but also in Corus Entertainment, which launched five digital channels in September. Yet, Shaw continues to predict that as many as half the diginets will fail.

Which ones those will be is still anyone’s guess, however.

At this point no one appears to have set a ratings benchmark that spells failure or success for these channels.

While the free preview numbers tell one story, few in the industry put much credence in ratings accuracy now that the preview period is over.

According to Yale, the only real value to the numbers is in providing a sense of where the top channels might rank.

‘You can see which channels were most watched and that is probably not a bad predictor of which ones are going to see the most subscriptions,’ she says.

‘Over the next number of months we’re going to see – at least in terms of subscriber counts – who the winners and losers are.’

On the other hand, the majority of channels are backed, at least in part, by deep-pocketed broadcasters and all have stated a willingness to wait out the slow build.

‘The future is digital,’ says Bryan Ellis, group VP, Corus Television, adult services. ‘This is not a short-term gig, if you will. We’re going to be in this for the long haul. Sure there may be some setbacks in the next six months to a year, but over the long haul, this will be a success story.’

The key to such optimism might be found in the fact that when pundits simply look at the pure numbers, many are missing that the digital market is no average demographic.

Digital subscribers are generally high-income professionals, highly inquisitive and living in urban markets, says David Kirkwood, VP sales and marketing for Chum Television. Most watch very little conventional television at all. In other words, this is an extremely desirable and hard-to-reach segment.

‘Consider what sort of share advertisers would be missing if they are not advertising on digital and specialty,’ he says.

Chum launched seven digitals in September, including FashionTelevision and SexTV. These, like so many of the new diginets, are so niche – more so even than most analog specialties – that it allows the broadcaster to provide a very targeted audience to advertisers.

‘The comparable [medium] is niche magazines,’ says Scott MacLeod, director of promotions at Global Television at CanWest, which controls six channels, including Lonestar, DejaView and Fox Sportsworld Canada.

‘In the digital universe it’s more and more targeted…so whereas a TSN would be a Sports Illustrated, a Fox Sportsworld will be a Soccer Canada [magazine].’

But the real key to the success of the digital rollout lies in a much simpler concept.

Phyllis Yaffe, CEO of Alliance Atlantis Broadcasting, which launched six channels, says the first order of business is to stimulate the acquisition of set-tops/dishes.

‘The first and only real test is how many people are buying digital. That has been very, very positive over the last little while,’ she says.

Indeed, according to a Decima research paper, Digital Domain, which tracks the digital TV distribution market, digital subscriptions are projected to reach 3.8 million by the end of 2002. That is up from 2.8 million currently.

Yet, while few disagree that getting the set-tops or dishes into the hands of the largest possible number of consumers is a top priority, there has been little concerted effort between broadcasters and distributors to promote digital services.

‘I’m hoping that the channels will realize that we’ve got to work together,’ says Michael Allen, VP programming at Rogers Cable. ‘So far, there hasn’t been a whole lot of that. But we’re open to doing that and are keen to get their support and participation.’

Instead, broadcasters have by and large opted to market and promote their digital properties on their own.

Yaffe says part of the problem with developing a more cooperative approach with the distribution industry as a whole was the fact that each carrier was offering different services in different packages. Still, she anticipates a higher level of collaboration in the coming months.

‘In the next while we have the opportunity and want to work with each distributor to see what they can do to bring more of their subscribers into the digital world or add new subscribers depending on who they are.’

Already, with the end of the preview period, many broadcasters have begun to shift efforts to varying degrees. While the preview period allowed the networks to show their stuff from the content side, most have something more up their sleeves in the coming months, whether debuts of new programs or mass media marketing efforts.

A strong marketing effort could be particularly crucial at this juncture, says John Farquhar, president of Toronto-based ad agency Young and Rubicam, which did the creative for a new campaign launched in January by Corus’ Documentary Channel.

‘You’ve got to look at it as a new product introduction,’ he says. ‘If you don’t have a strong launch at the beginning, when there’s actual newness to it, then it’s not necessarily going to build larger as time goes on.’

And judging by the numbers, building larger is about the only way for the diginets to go.

-www.ccta.ca

-www.corusentertainment.com

-www.chumlimited.com

-www.canwestglobal.com

-www.allianceatlantis.com