Halifax, N.S.: Think about what works well on tv, what you’re interested in and what the audience says it wants. Combine these, as Salter Street Films has done, with growing strength and versatility in programming for tv and the Net, and you will have a provocative slate of six (and a half) Category 1 digital specialty channel applications.

In fact, four applications from Halifax-based Salter have provoked spirited interventions from central Canadian powerhouses intent on protecting their franchises and their perceived right to practise channel ‘nesting.’

Salter’s Category 1 applications are: Comedy for Kids (solely owned), Girls tv (solely owned), The Independent Film Channel Canada (partners are The Independent Film Channel and Triptych Media), Nature Television (solely owned), Play tv (solely owned), ztv (solely owned) and, as a minority participant with Corus Entertainment, Chrome, Television For Men.

Salter has also filed 24 applications in Category 2, covering a range of niches – from tv for the greater good (Relationships tv, Canadian Consumer Channel, Recovery tv) to tv for the way we would if we could (Ocean Life tv, Wheels, Classics tv), among others.

Michael Donovan, Salter chairman and ceo, says several key factors helped shape the Category 1 choices: ‘Number one was research. Number two was our own focus on youth, from a creative point of view. Of course the two dovetail. Number three was the Internet compatibility, which again dovetails with youth because they’re the ones who most often use Internet and television at the same time. We wanted to be very proactive with respect to Internet offerings. And we wanted services that would showcase Canadians, both in Canada and for Canadians, and [would] be international and exportable. Both were important considerations. So in other words, mere importation of programs was not our plan.’

But their plan – backed by at least $30 million in approved financing – aims to shake things up. No company based in Atlantic Canada currently owns a specialty tv service. The trend towards consolidation of the tv industry, which the crtc supported recently in the wic split, suggests the commission may be loath to admit new owners to the specialty club.

Salter’s proposals for Comedy for Kids, Girls tv, Nature tv and Independent Film Channel Canada, have raised negative interventions from potential competitors such as ctv (Comedy Network and Discovery Channel), and Corus (ytv).

Salter and its challengers disagree on the impact of nesting of services – that is, allowing a licensee with a relative lock on a particular genre, such as ctv has with Comedy, to continue to control and subdivide that niche.

The specialty association, sptv, argues nested or spin-off services do not compete directly with the parent. But Salter president and coo Catherine Tait says, ‘The issue is not whether a nested service should be considered directly competitive with a parent service. The issue is whether an existing specialty service should be given priority when it comes to licensing a service in a separate, but complementary genre.

‘The concept of nesting is inimical to the maintenance of diversity in the broadcasting system. This concept is also, of course, profoundly anti-competitive – in terms of competition overall in the broadcasting system – because it so clearly gives incumbents a privileged position.’

Tait points out the crtc encouraged diversity when it licensed CTV Newsnet after CBC Newsworld, and CTV Sportsnet after tsn. She notes that several specialtycasters objecting to Salter’s proposed channels are themselves proposing spin-off services.

But ctv exec vp Trina McQueen, in her comments to the commission, says spin-offs encourage broadcast diversity: ‘A broadcaster has an interest in differentiating its new service sufficiently far away from its existing service, or its new service will end up taking audiences, advertisers and programming away from its existing service.’

For his part, Salter’s Donovan says increased diversity depends on adding new players. He welcomes a recent crtc decision allowing ytv to develop a 9 p.m. to midnight programming block aimed at older teens – although this block could compete for viewers with Girls tv and Comedy for Kids.

‘Because as a technical matter, teenagers don’t want to watch teenagers – they want to watch young adults. Also, I believe in competition. I think Canada is better served being more free trade oriented. But at the same time, I can’t be a complete stickler about this because I believe in Canadian content. Not as a protectionist thing, but as a value-added thing in the programming mix. So, more services, more audiences being reached, more opening up [of the marketplace] is a good thing.’

Salter vp of corporate planning Claude Galipeau says Salter would launch its channel in summer or fall 2001 if the crtc announces new licencees by the end of 2000. He says Salter’s ‘wholesale rates’ – the money paid to Salter by cablecos – are in the low to mid 30-cent range, ‘which is very competitive.’ He expects themed packages of these discretionary services should cost consumers about $4.95.

As for number of subscribers, Galipeau says Salter’s conservative estimates are for 900,000 per channel at launch, rising to about two million by year seven, in 2008.

He says Cancon spending averages 39% to 41% of previous years’ revenues across the channels, over seven-year terms. He notes the crtc stipulates, as a licence condition, that Cancon spending must be a fixed percentage of revenues actually received by channels in the previous fiscal. Cancon exhibition ranges from 35% to 70% across the channels, over seven-year terms. *

-www.salter.com

-www.crtc.gc.ca