Cheap HD in Canada? // 2009-08-19

[tomcat01]

this would be cool for canada and some americans who live close to the border (DING) SORRY THAT WAS STUPID LOL

C/P

Upstart targets big boys in cheap satellite TV space

00:00 EDT Wednesday, August 19, 2009
© The Globe and Mail

The Canadian broadcast industry is witnessing its own version of the space race, with three rival companies vying to launch a new kind of scaled-down satellite TV service aimed at penny-pinching consumers.

In a surprise move, the newest player, dubbed FreeHD Canada Inc., entered the fray yesterday to take on the country's largest satellite TV players.

Led by long-time industry executive David Lewis, Toronto-based FreeHD wants to offer local television channels at no cost to viewers across the country who don't want to subscribe to premium cable or satellite TV packages.

The proposal, which will be discussed by the federal broadcast regulator at hearings in November, comes on the heels of similar pitches put forward by BCE Inc.'s bell TV and StarChoice, the satellite provider owned by Shaw Communications Inc.

Though each proposal calls itself a free TV service, the catch for consumers is that they will have to spend $300 to $400 to buy the necessary hardware to receive a handful of local TV channels at no cost.

The companies are each trying to seize upon a coming 2011 transition in the broadcasting industry that will make analog signals used for decades obsolete.

By August of that year, Canada's television networks must broadcast their signals digitally over the air to free up analog spectrum for other uses, a move already undertaken in the United States.

However, CTV and Global Television have argued it doesn't make sense to spend millions to upgrade transmitters in small markets, as less than 10 per cent of Canadian homes use set-top antennas.

CTV and Global have upgraded transmitters in large markets, but want permission to forgo some smaller centres.

Sensing an opportunity to pick up satellite TV customers, bell TV and StarChoice both sought to launch basic satellite services that would offer local channels free in each market. Mr. Lewis figures he has now raised the ante by offering a service exclusively with high-definition channels. However, each proposal needs CRTC approval.

"What I basically saw is the large disruption that is coming in the Canadian market from the digital transition," Mr. Lewis said yesterday in an interview.

Having worked in the satellite TV industry for 31 years, including helping launch StarChoice and most recently serving as chief executive officer at Ottawa-based CL Satellite, which leases space on satellites to broadcasters, Mr. Lewis figures he can be up and running in 2011 if he can secure a licence by early next year.

For each player, the business model is to offer hardware as cheaply as possible to consumers who have been getting their TV through rabbit-ear antennas on their television set, then give them local channels at no cost. The carrot for the companies is the ability to sign up a customer, then potentially sell them premium packages on top of that, once they have purchased the d*sh.

In FreeHD's case, Mr. Lewis said he plans to offer 150 specialty channels at roughly $30 or $40 less than a comparable cable or satellite bill that offers high-definition packages. Financing will come from Canadian partners who have not been announced.

Mirko Bibic, bell Canada's chief of regulatory affairs, said the new proposal differs only slightly from bell's concept, which it took to the CRTC in the spring. "The idea is not new, it's very similar to what we have indicated we would be prepared to do under the right conditions," Mr. Bibic said.

He added that bell's application could be up and running faster than a company starting from scratch, since it doesn't have to install infrastructure or secure space on satellites. "We've got an ability to source the necessary equipment fast," Mr. Bibic said. "Basically, we don't need much lead time. Ours isn't speculative."

In taking on bell and StarChoice, Mr. Lewis is going up against some well-established players. b*ll TV has about 1.8 million subscribers and StarChoice has about 900,000, according to recent federal data.

Analysts and industry watchers are mixed on whether the satellite proposals will fly with the regulator.

Peter Lyman, a senior partner with Nordicity Group Ltd., a consulting firm that studies the industry, said the cost to sign up for free satellite television is more expensive than buying a new digital antenna. In the U.S., where the transition from analog transmission to digital transmission took place this year, a new digital-ready antenna to receive free, over-the-air TV costs about $40 to $50.

"It is interesting," Mr. Lyman said of the FreeHD proposal. "Whether it'll work or not, it's a good entrepreneurial shot by the owners."

However, one Bay Street analyst whose firm prevents him from speaking publicly said launching a new satellite business is a hard strategy to pull off because the infrastructure costs are high and the channels that can be offered are generally the same as competing services, making them difficult to differentiate.

[slowboy]

thanks for the info

[ftatvnoob]

Good to know, but in my opinion, this is bound to fail. There's a reason less than 10 per cent of Canadian homes use set-top antennas. There's also a reason why a lot of Canadians sign up for just the basic packages (a few sports channels + NBC, ABC, CBS, FOX, CW). It's because of the very obnoxious practice of "simsubbing." This is short for simultaneous substitution, wherein the American commercials in the American shows the different Canadian TV stations import are replaced with Canadian ones. There would be nothing wrong with this except a lot of the time, there are errors in the process,ranging from loss of audio to lost segments due to the simsubs running too long. Probably the most heinous act would be simsubbing the Super Bowl commercials. It's much ado about nothing but many are curious to see what the big deal about those commercials are (especially the 3d ones last year). There are forums vilifying the CRTC and this despicable rule they have (Faulty HD Simsub Log - See Post 1 for Guidance - Digital Forum). What they need to do is abolish that governing body and allow Dish Network and DirecTV to do business here.

[philman]

Still good to know. Good read.

[zekester]

I already get 15-20 great HD channels OTA in Toronto, why would I pay for them??

[brewboy]

What's to say this $40-$50 per month of service, proposed " is an INTRODUCTORY" price then like everything else there are the hidden charges, taxes, and add on packages...as certainly there will be, then BOOM your introductory year is up...and up goes the price, sounds like a huge scam, similar to the services already in Canada.