IN the storm of consolidation that has swept through the broadcasting industry in the past year, Paul Robertson is among the elite few ascending the corporate food chain at the speed of convergence.

President of YTV turned head of television for Corus Entertainment and chair of the Canadian Association of Broadcasters, Robertson has emerged a top-tier television guy responsible for expanding Corus’ television assets, and poised to be part of what may turn out to be one of the last Canadian media giants standing.

Since its inception 18 months ago, Corus has made more than 10 major media acquisitions, including the biggest animation house in Canada and the country’s only women’s network; it is set to launch two category 1 digital services in September along with up to five second-tier channels, including Discovery Kids; and Robertson confirms the buying spree is far from over.

The next month, however, will be particularly stressful for the cable-affiliated broadcaster as it attempts to strategize for the coming CRTC decision policy on cable ownership of discretionary services – a decision that will not only affect Corus’s pending ownership of WTN, but will set the stage for future acquisitions as well as the future of the entire Canadian broadcasting system.

‘There will likely be a decision for distributor-affiliated ownership with the appropriate safeguards… but then again, we’ve been surprised before, more than once,’ says Robertson, who sits 16 storeys above Front and Bay Streets, in a meeting room at Corus headquarters, where inspirational words, like ‘Livin’ la vida loca’ are graffittied along the walls. His office remains at the YTV compound, several blocks west, where all of Corus’ television operations are soon to move.

And even further west is parent company Shaw Communications, whose affiliation to the separately traded Corus, which includes voting control by J.R. Shaw, is proving to be a persistent hindrance in the current digital channel carriage negotiations.

In fact, it came as quite a shock, says Robertson, that Shaw was even applying for two category 1 licences. ‘It never dawned on us that any of the applications would be from anybody else (under the same corporate umbrella) other than us.’

To make it even more amusing, says the Stratford, Ont.-born Robertson, during the application process, Corus was well into a protracted conversation with what was then ZDTV (now techtv), when the U.S. broadcaster decided to do the deal with someone else. Corus only later found out that someone else was Shaw.

‘That whole situation really took us by surprise and at that point it slowly occurred to us that the 5-1 rule we were being netted into would include whatever Shaw wanted to put up as well as what we wanted to put up,’ says Robertson. ‘If we get one category 2 up (on Shaw or Star Choice), we’ll be doing well.’

Under the 5-1 rule, for every ‘affiliated’ category 2 channel a distributor picks up, it must also pick up five unaffiliated services.

So far, says one Corus insider, Rogers is proving to be a more accessible destination for the media spin-off.

‘Some in the short term have more capacity than others,’ says Robertson – some like Bell ExpressVu, which falls under the same umbrella as CTV.

Taking cues from distributors

Corus’ strategy, explains Robertson, was to take direction right from the distributors – find out what would best fill their holes.

And what was discovered was that movies and sports were among the hottest programming commodities, primarily because they are both major drivers in premium offerings.

‘If someone could come forth with a service that provides a movie or two a night in primetime, even if it wasn’t a movie channel per se, that would be very appealing to the BDUs. From our stand point, we have a couple of options to play into that genre,’ says Robertson, withholding any specifics.

With the exception of Discovery Kids, Corus hasn’t yet announced which category 2 services it will launch this fall along with The Documentary Channel and Land & Sea, although it is certain Alliance Atlantis Communications will be partnering on at least one of them.

Meantime, Robertson says branding is an absolute driver. ‘I think the sense here is that because the number of digital households is initially very small, it’s been very difficult for people to develop marketing campaigns that will build a high level of awareness against any particular service, particularly in light of the fact that there might be 30 new ones.’

Likewise, the well-branded ones, like Discovery Kids, have shot directly to the front of the line.

‘With so many licences granted, they really become an enabling bucket of opportunity. Most of the big companies came out with 30-40 new licences, so they’ve gone in and accessed those services that will best help their cause from a programming and distribution point of view. Then, whatever share ownership understanding exists within those services will be activated.’

The ones with less brand appeal have had to be a little more resourceful in packaging and partnering, particularly the newer and smaller entries, which have shorter pipelines to content and structural resources.

‘You’re not even a player in any of these categories without a source of supply of programming,’ says Robertson. ‘We know where our programming is coming from. Our relationship with the CBC and the NFB on the doc channel makes a huge library of documentaries readily available to us. As for Discovery Kids, our relationship with Discovery in the U.S. and our expertise in kids combine to make the channel an easy one for us to program. We also have a big supply of movies because we have two pay services in the West – Super Channel and Movie Central.’

Rates are perhaps the biggest challenge for a company as integrated as Corus.

‘The catch-22 is the programmers are saying that because there is such a small number of households initially, we’re going to need a decent rate to pay for the programming, and branding and marketing. But the distributors say, ‘We can’t load all the costs on subscribers, we have to keep the rates trim particularly if we’re going to put 30 channels up.’ The answer lies somewhere in between those two positions,’ says Robertson. ‘Some may have come to a point of view on this, but we’re still having conversations about it.’

Canadian broadcasters are skittish about ad market

The advertising market also remains a key concern these days for Canadian broadcasters, who have watched ad revenues take a nose-dive in the U.S. over the past year.

Although Canadian broadcasters are yet to feel the drop off, Robertson says, ‘Canada’s getting painted with the same brush, feeling that there is some sort of airtime apocalypse coming in the next few months. That’s on everyone’s mind and right now I would describe the market as skittish.’

What also remains uncertain is who’s going to end up in bed with whom. Corus recently bought Shaw’s stake in Astral, spending $110 million on 2.03 million class A non-voting shares in the company, at $48 each, and 145,600 class B voting shares, at $85 each. It’s an investment that gives Corus a 9.8% voting share in Astral. Despite that, Robertson says Corus is not going after Astral Communications, to which it recently lost its 50% interest in Family Channel.

The company has, however, been vocal about its interest in Cinar Corp.’s assets, as was Nelvana even before its takeover.

And while Alliance Atlantis would also make an excellent match for Corus, given its growing pool of specialty channels and programming outlets, Robertson denies speculation that a deal between the two companies is pending. He also denies that Corus, which will be in an estimated $500 million debt position by Aug. 31, is a takeover target. ‘We still have a few more tricks to pull,’ he says with a smile.

But few tricks are likely to be pulled before the CRTC comes down with its decision concerning its cable ownership policy, even though Robertson is fairly confident that the regulator will soften its position.

‘It would be really surprising if one sector of the industry would be forced to sit in the penalty boxes while others participate in what is clearly a converging environment where several large companies are going to emerge as being key players in Canada,’ he says.

‘In the digital world, it is foolhardy to stand in the way of convergence. With 10-to-one compression, we’re increasing with a quantum leap the amount of ultimate capacity that’s going be there for carriage of channels, which was the primary reason (the CRTC) was always concerned about the union of broadcaster and cable.’