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The Globe and Mail

Playing field has changed for TV licence holders

Call it the Canadian Dream: Once upon a time, anyone with a bright idea for a TV channel could cobble together some financing and staff, jump through the regulatory hoops to snag a licence, and land a distribution deal with a cable or satellite company that brought in a dependable monthly payment from viewers.

But over the past two decades, channel lineups have become clogged with all of those good ideas (and, um, many bad ones). The Canadian Radio-television and Telecommunications Commission still issues TV licences on a regular basis – two more were handed out this week, for hockey channels – but there are many licence holders who can't even get a meeting with executives at cable, satellite, or so-called IPTV services such as Bell Fibe or Telus Optik.

Partly that is because consumers, frustrated at having to pay for dozens of bundled channels they never watch, are starting to cut – or at least "shave" – their cable services. But it is also because distribution companies such as Bell and Rogers have sucked up many of the good channels into their own media divisions; if they're not racing to add services that compete with their own, could you blame them? That's the way these things work in our vertically integrated world.

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But if you know how to play the game, how to find room on the margins, there's still money to be made – and eager viewers to be served.

Which brings us to Jay Switzer. For almost 25 years, Mr. Switzer rose through the ranks at Toronto's CityTV, starting in the programming department and winding up as president and chief executive officer of its parent company, CHUM Ltd., from 2002 until 2007, when it was sold to CTV.

A year ago, he and David Kines, a former senior executive at MuchMusic, launched a four-channel package of specialty movie channels called Hollywood Suite. Retailing to viewers for about $5 a month, the channels offer up to 400 movies, uncut and commercial free, broadcast in high-definition. "Canadians have an insatiable appetite for movies, and there were not enough movie options in the marketplace," Mr. Switzer said in an interview.

Led by Ellen Baine, a former programmer at CityTV, the channels harken back to a pre-DVR/Netflix era, when viewers might sit down and watch a selection of movies curated for them by people who really know their stuff: This week, the MGM Channel is in the midst of a James Bond marathon featuring 10 of the 007 films, including Goldfinger, From Russia With Love, and Dr. No . Next weekend, in honour of Remembrance Day, two other channels will air more than a dozen war movies, including Full Metal Jacket, Patton and Bridge on the River Kwai.

But viewers can also watch up to 250 of the films on demand, on mobile devices – providing an attractive service for distributors hoping to blunt the allure of Netflix. Which is why Hollywood Suite is available on Bell's Fibe and satellite services, Telus's Optik, Eastlink, SaskTel, and a few others. But customers of some of the country's biggest distributors, such as Rogers and Shaw Cable, are so far locked out.

And even though regulations require that at least 25 per cent of the channels on a distributor's lineup be independently owned, Mr. Switzer must tread carefully in how he discusses the challenges of selling channels to carriers who are also his competition.

"There's greater opportunity here, but there's also great risk," he explained, "because if you create a product that's so attractive that it becomes very important to their distribution business, then you risk their own media division wanting to either do it themselves, or perhaps not necessarily seeing you succeed that much. That's the frustration and problem of a model that allows distributors to own programming services."

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He's hoping to be able to announce a distribution deal with Rogers sometime soon, but who knows? "We have an unbelievably friendly and constructive relationship with Rogers," he said. Still, he pointed out that Rogers was able to secure distribution for its own movie-and-specialty-TV channel, F/X Canada, on its cable lineup as soon as it launched the service last year."It's frustrating when [they] can immediately launch [their] own services, and it's not quite as easy if you're an independent."

He added quickly: "Now, I say that carefully because Rogers is and continues to be an excellent friend of ours. But that's the reality. That's just the way it is."

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