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Justin Bieber poses on the red carpet at the MuchMusic Video Awards in Toronto in June.Adrien Veczan/The Canadian Press

Pop star Katy Perry strikes a series of nubile poses and sings about going all the way; slightly femme heartthrob Justin Bieber flashes a non-threatening grin. For broadcasters courting the teen demographic, it would seem to be the stuff money is made of. But if CTV Inc. has its way, it will soon be broadcasting MuchLessMusic.

The media company suffered a setback in that effort on Thursday, as the federal broadcast regulator denied its application to cut in half the number of music videos it shows on its specialty channel MuchMusic.

But Brad Schwartz, the senior vice-president and general manager of the Much MTV Group, said the company will continue to push its request to cut down on the channel's music videos from 50 per cent of its schedule to 25 per cent.

"It will, 100 per cent, be revisited" when CTV goes before the Canadian Radio-television and Telecommunications Commission for the licence renewals of the stations it owns in the new year, Mr. Schwartz said.

MuchMusic is suffering from the YouTube effect. While many content owners fight to keep their TV shows from being posted on the popular site illegally, music videos are freely available all over the Internet. And the record companies that own them are making it easier for users to turn off the TV and Google for Gaga instead.

Music video website Vevo.com is owned by two of the largest record labels - Universal Music Group and Sony Music Entertainment - and has deals to show content from other labels such as EMI Music. The site sells advertising on the content, and makes the videos available on YouTube and other websites through a Vevo-branded embedded video player.

"We don't even get video premieres any more. The record labels premiere all their music videos on Vevo," Mr. Schwartz said.

However, other companies - including Rogers Communications Inc. - filed documents with the regulator objecting to CTV's application. Like most specialty channels aside from news and mainstream sports, MuchMusic benefits from "genre protection," which prevents other specialty channels from launching in Canada that would directly compete with existing services.

MTV Canada (which is also owned by CTV) is permitted to exist here, for example, because it focuses on lifestyle programming, which is not in direct competition with the bulk of MuchMusic's music-focused content.

"Allowing MuchMusic to significantly broaden its nature of service in such a way that it can transition into a young adult/lifestyle service calls into question the continued relevance of the original rationale for granting genre protection and limiting direct competition," Rogers vice-president of regulatory affairs Susan Wheeler wrote in a submission to the CRTC in June.

In its denial of CTV's request on Thursday, the regulator agreed with this reasoning, but also suggested that the licence renewal hearing would be the proper environment to discuss the issue.

MuchMusic's business has been slipping in recent years: Between 2005 and 2009, its profit before interest and taxes shrank 56 per cent, from $16.04-million to $7.03-million, according to numbers submitted to the CRTC.

The channel's subscriber revenue rose only 3 per cent in the same five-year period, while ad sales plummeted - to $27.9-million last year from $42.3-million in 2005.

Mr. Schwartz said the channel would use its new flexibility not to broadcast more episodes of Degrassi or The Vampire Diaries, but more music-related programs, such as its show My Date With, which pairs up fans for a hang-out with their favourite musician, or DisBand (recently renamed Discovered), which gives fledgling Canadian bands a chance to get noticed by record labels.

"We love music," Mr. Schwartz said. "We just need to find more innovative ways of connecting to the audience."

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