Sun TV was really only ever about one thing: gaming the system.
By Christopher Waddell, Publisher, for iPolitics.ca
Sun TV was really only ever about one thing: gaming the system. Had the scheme worked, it would have made some people a lot of money even if nobody watched the channel at all.
But it failed—miserably—taking with it another 200 or so jobs, more journalistic collateral damage from the continuing efforts of financial engineers to wring cash from media ownership. (Remember CanWest Global?)
Initially, the Sun TV strategy seemed almost foolproof. Take a failing over-the-air channel in Toronto that relied on advertising for all its revenue and turn it into a national specialty channel that viewers would have to pay for through monthly cable or satellite subscriptions. To make it happen, mix in political pressure and powerful connections, deftly exploited.
Quebecor believed—or was convinced by others—that if it created a conservative all-news channel modelled on Fox News in the U.S., the Harper Conservative government would be so delighted (or would submit to having its arm twisted) that it would force the CRTC to require every cable and and satellite distributor in the country to include Sun TV on mandatory carriage.
That would mean all of Canada’s 10 million or so cable or satellite subscribers would have to pay to watch Sun TV—or pay to not watch it, but pay for it regardless. If each household paid Sun TV just 25 cents a month as part of their cable bill, the channel would reap $30 million a year.
As long as Sun TV’s annual production costs were less than $30 million, its owners would soon be rolling in cash. It wouldn’t need any viewers to be profitable. Any advertising the network could sell would be gravy, pure profit—even at $30 a spot for promoting miracle exercise machines, bizarre kitchen devices or farming chinchillas for profit in your basement.
To ensure costs would be low, Sun TV was designed to be a network in a one-bedroom apartment. Unlike virtually every other news channel in North America (CBC News Network, CTV News Network, CP24 in Toronto, Global BC, RDI and LCN in Quebec, CNBC, MSNBC, Fox News and CNN) Sun TV had no local outlets or affiliates and only Quebecor’s TVA network, which covers Quebec and Ottawa, to provide it with the bare bones of a TV news service: pictures from events, cameras and reporters on the scene.[node:related]
Producing video costs money. It’s much cheaper just to have people talking in a studio about the news rather than actually covering it.
To push their plan Quebecor talked up the idea of Fox News North, hoping to generate enough interest in parts of the country to pressure the Harper government to act. Canadian media helped out with regular spells of handwringing about whether Canadians wanted or would watch our own version of Fox News. Of course, if Sun TV got mandatory carriage, audience numbers wouldn’t matter at all—but Quebecor was happy to get the publicity.
Sun TV argued it should be treated the same as CBC and CTV, both of which were on mandatory carriage when they began broadcasting about two decades ago. Which would be roughly the same as Quebecor, which wants an NHL team in Quebec City, arguing that it should be granted the franchise on the same terms Toronto and Montreal received when they entered the National Hockey League at its creation in 1917.
Despite Quebecor’s campaign and the presence of Kory Teneycke, one of Mr. Harper’s former directors of communication, as Sun TV’s vice-president, it didn’t work. The CRTC refused to give Sun TV mandatory carriage.
That decision effectively crippled Quebecor’s plan, condemning the channel to death. In the short term, though, Quebecor and Sun TV shifted to plan B—trying to persuade Ottawa to force all cable and satellite distributors to offer Sun TV to all their customers. That, at least, would save Sun TV the costs involved in trying to market the channel to all those distributors.
It didn’t produce subscribers either, but on its third try, Sun TV did get kind of lucky. The channel’s pressure helped push the CRTC into creating a new bundle of news channels that included Sun TV. That gave it sort-of mandatory carriage through the back door. Viewers who wanted news channels had to take Sun TV as part of that package—although no one is compelled to buy the news channel package, unlike with the basic mandatory service.
In the meantime, Sun TV began a series of on-air antics and stunts designed to draw attention to itself in the hope that publicity would do what nothing else had done: persuade people to subscribe.
That plan failed, too. What those antics did do was give Sun TV visibility through regular and sometimes voluminous chatter on social media. That only made it appear that many more people were watching the network than was actually the case. Audiences were minuscule; subscriber revenue couldn’t even cover the cost of running a network in a one-bedroom apartment.
Postmedia’s decision to leave Sun TV behind in its purchase of Quebecor’s Sun Media chain of newspapers and websites was another blow, leaving Sun TV as a money-losing orphan in the Quebecor family.
In the final analysis, Quebecor badly misread the environment on every level. It was apparently unaware of growing public anger about the cost of cable TV. Viewers infuriated at having to pay for channels they don’t watch are increasingly cancelling their cable entirely and, like many young people, are happy to have video delivered to them online.
And the project was politically tone-deaf. It didn’t appreciate that the Harper government’s efforts to play the populist friend of consumers—on such issues as the price differential between goods in Canada and the U.S.—would be undercut by trying to ram Sun TV down those same consumers’ throats.
Left in the lurch now are all those staffers who tried to make Sun TV work—marooned in a continually shrinking Canadian media market.
There’s a broader lesson here for government, regulators and employees in Canada’s broadcast sector that goes beyond Sun TV. The combination of consumer frustration and attractive alternatives means the days of specialty channels acting as licenses to print money are ending. Sun TV won’t be the last player to fall.
Correction: an earlier version of this story misspelled Kory Teneycke’s name.
This article originally appeared on iPolitics.ca.
Photo by Wendy Kenin, via Flickr.