Slava Levin sits in the control room of Ethnic Channels Group, hands folded confidently on his knee, surveying a wall of television screens displaying the current offings of his broadcast empire.
On the more than 40 televisions currently flickering with life, there are no shows that the average North American-raised viewer would recognize: no Gossip Girl, none of the frenzied banter of CNN, and nobody dancing with the stars. Instead, there are sitcoms starring middle-aged Eastern European men and women, white-clad cricket players and the fierce on-ice battles of a Russian hockey league. On one screen, panellists on a low-budget talk show engage in a serious discussion about the Middle East.
Outside, in the reception area of the company's North Toronto office and production studio, Levin greets his visitors in front of a wall lined with 31 framed CRTC licences that represent some of the international content his company has distributed in Canada over the past six years. "We're not a mom-and-pop operation, but we're not the CBC," says the company's 42-year-old chief executive officer.
Since 2004, Ethnic Channels has been bringing international programming to Canadian viewers, licensing content from Russia, Greece, Vietnam and various other countries, and distributing 26 digital channels through Rogers Cable, Bell TV, Telus, Shaw and MTS.
You would think that becoming an ethnic broadcaster in Canada would be a no-brainer. By 2031, one in three Canadians will belong to a visible minority group, and one in four will be foreign-born, according to Statistics Canada. There are 32 ethnic communities in Canada with populations of more than 100,000, and 10 with more than a million.
But Levin says Canadian regulators have not made things easy for the industry's "third-language" providers—those who cater to viewers whose first language is neither English nor French. Ethnic Channels must comply with CRTC guidelines, producing its own Canadian content and recording every minute of programming as mandated by the regulator. Foreign competitors, meanwhile, can offer their content to viewers without following the same rules.
And so, in 2008, Levin's company quietly introduced a new offering, a direct-to-consumer Internet television service called NexTV that already carries 150 channels for 12 different communities. Unlike the country's licensed broadcast distributors (think Rogers and CTV), so-called over-the-top Internet services are considered to be new media by the CRTC and are largely unregulated. Through NexTV, Levin's viewers can stream movies, children's programming and even porn, from a set-top box connected to their TVs. There are channels that are not yet available on Canadian TV, including the Kontinental Hockey League (the Russian hockey league) and the Arabic version of Al Jazeera. And Levin can beam the content straight into his customers' homes, without having to worry about the bandwidth constraints or regulatory requirements of the traditional model. "We're essentially a virtual cable company," he says.
In the mid-1990s, Levin owned a video store in Richmond Hill, north of Toronto. It was a standard operation called Moving Pictures Video Inc. that rented Hollywood fare like Fight Club and American Pie to young suburban couples for $2.99 a pop. Each movie cost him $100 to buy, meaning that he would break even after about a month as long as the movies weren't lost or damaged.
An early adapter and natural tinkerer, Levin remembers asking a tech-whiz friend if it would be possible to buy one copy of a movie and make it available for download by his customers via the Internet, instead of having to buy multiple copies. They tried it between their houses, using a dial-up connection. "It took seven days," laughs Levin. "I parked that idea in the back of my mind and waited for the technology to evolve."
Evolution in TV has come fast and furious over the last few years, with companies like YouTube and Hulu throwing the traditional model out the window and allowing viewers with a computer to watch their favourite shows on their PC, Mac or smart phone.
For broadcasters, this has ushered in a time of intense handwringing and constant litigation, as they attempt to control, or at least profit from, the new normal. But little thought has been given to what this technology has meant to the expat communities of the world. In Canada, immigrant television viewers have historically been confined to modest offerings from their home country. They may have had a community newspaper and, if they were lucky, a single television station that showed some content from home.
Now, immigrants can instantly access their country's media on the Web, and they are no longer content with the meagre programming of basic cable. But not everyone wants to watch TV on their computer, and the technological divide is especially pronounced for Canada's older immigrant population. For them, NexTV offers all the choices of streaming content through the traditional comfort of a TV screen. For $150 plus a monthly subscription fee that ranges from $9.99 to $29.99, depending on the language package, customers—which now number close to 10,000—can order a set-top box that turns their television into a Web portal, allowing them to flick through dozens of channels with a remote control.
NexTV has not advertised the service, instead letting it catch on through word of mouth inside the communities it serves through Ethnic Channels' traditional offerings. Television is still the company's bread and butter, earning undisclosed advertising dollars supplemented by revenue-sharing agreements with broadcasters, but Levin sees the company's future in NexTV, which promises something most ethnic consumers will buy at a premium: variety. "So if you're a German or Russian or Greek, you now have more than one channel to choose from," he says. "That was my ultimate goal with cable and satellite, but bandwidth restraints didn't allow that to happen."
Levin is an unlikely media magnate. Born in Kiev, Ukraine, and raised in Richmond Hill after his parents immigrated in 1976, Levin studied architecture at Humber College. But at an interview after graduation, he was offered a starting salary of $18,000 and walked away not only from the job, but from the profession. "I thought, ay-yi-yi, I can't support myself on that."
At 24, he opened his video store, and it was his father, Izzy, who got him into the TV business around that time. The elder Levin missed Russian TV, bought a satellite dish and went to the library to figure out where to point it. "Next thing you know, we're putting flyers out in the community and the phone's ringing off the hook," says his son. Russian émigrés, eager for a signal from home, hired the pair to install their satellite dishes, but rather than stick with the covert operation, the younger Levin decided to make the business legitimate.
After a few years of distributing Russian television, he contacted Russian state-owned channel NTV and was soon appointed chief operating officer of its NTV Americas division. Along with his partner, Gregory Antimony, they launched the channel in the United States, and helped get it going in Israel, Germany and Australia, as well.
In 2004, after years of constant travel, Levin decided to leave NTV and launch a new company in Canada, which seemed like a natural place to expand a business based on ethnic content.Launching the Russian channel had been relatively easy in the United States, where broadcast regulations are lax and open competition is prized above protectionist instincts. But he soon learned that things weren't so straightforward at home in Canada. "I had a really small amount of knowledge of the Canadian market," Levin admits now.
In Canada, Levin was required to apply for a slew of CRTC licences, and while he waited for the approvals, he built his facility—a state-of-the-art broadcast centre complete with studios, editing suites, a graphics department, marketing and advertising offices. "It was a whole big investment, a gamble, but I'm a risk taker," says Levin.
But having invested millions of dollars of their families' money in broadcast equipment, Levin, Antimony and a third partner, Oleg Masliy, were now at the mercy of the CRTC, and began to learn about the country's stringent broadcast requirements.
Fifteen per cent of their content had to be Canadian-made, and so Ethnic Channels began producing talk shows about immigration, women's issues and culture, hosted by individuals from Toronto's diverse communities. "There's a lot of talented people that live in this city who are just dying to get out there and do something unique and different," he says. "Every day someone comes and says, 'I want to do a show with you guys.'" But the regulator soon threw him another hurdle.
When the company launched, Levin operated with Category 2 third-language licences. These protected his domain in the Canadian market, thanks to a sort of "one channel per genre" rule that prevented other third-language services from offering content in the same tongue. But in 2004, the CRTC changed the rules, allowing foreign-owned third-language stations to broadcast in Canada, with no tax requirements and no constraints on Canadian content.
"They don't pay taxes, they don't have to adhere to any CRTC regulations. I was really livid," says Levin. "I might as well have taken the money and opened a McDonald's."
Levin became a vocal critic of the CRTC, and appeared before the commission on several occasions, demanding a one-to-one rule that would limit the number of foreign broadcasters permitted to compete with Canadian third-language broadcasters. The CRTC decided on a three-to-one rule—meaning that three foreign companies are allowed for every one Canadian—which takes effect next year. (When asked about Levin's complaints, a CRTC spokesperson said the organization does not comment on specific companies or individuals.)
Within Canada's largest ethnic communities—the South Asian, Chinese and Italian markets—there is room for competition. But Levin's company has focused on smaller, underserved groups like Eastern Europeans, Pakistanis and Filipinos, whose advertising dollars are already scarce.
Zuhair Kashmeri, the webmaster for the Canadian Ethnic Media Association and an editorial commentator for OMNI Television, says that advertisers have been slow to embrace ethnic media. "When you're talking about media, you're talking about advertising dollars, and the problem has always been convincing companies that spend advertising dollars to focus on ethnic programming," he says.
Levin's target markets make things even harder. "There's a very strong Macedonian diaspora and identity, but the numbers are very small, and I can see the advertisers being resistant to devote dollars there," says Kashmeri. "I don't envy him and the venture he's trying to establish." He believes the CRTC should take its cues from the country's policies about protecting and promoting multiculturalism, and start pushing broadcasters in that direction by mandating ethnic content. "It's so frustrating to be in the ethnic media," says Kashmeri. "Everybody's talking about multiculturalism, they're paying lip service to it, but when it comes to action, nobody's putting their money where their mouth is."
Luba Cherny, the president of NTV Canada and owner of the Toronto-based Canadian Courier, a newspaper for Russian-Canadians, praised Levin's dedication to these markets. "It's very important because many people come here, but their hearts don't come," she says. "They have parents in Russia, they have relatives, friends. They're interested in what happens in Russia—and they're interested in Canadian news in Russian."
Levin is confident advertisers will embrace these smaller markets. Larger companies like Lexus, Toyota and Royal Bank of Canada are beginning to sign on to the digital channels. The cost of advertising is competitive with other small networks, but the company sells itself on being able to reach markets the traditional broadcasters can't. He has already changed the model of ethnic television in Canada, he says, and is ready to do it again.
While most ethnic broadcasters here operate under Canadian names like the Asian Television Network or Fairchild, Levin distributes content under the name of the network that carried the program in its country of origin. "If I transplant you to Germany and tell you there's German-Canadian Television, you don't know what that is," he explains. "But if someone there says, 'We've got the CBC,' you know exactly what it is. We bring the mainstream channels, the Dan Rathers of Russia."
But the straight-from-home model that has brought Ethnic Channels success in the traditional TV market is now being usurped by the Internet. And whereas the CRTC was once Levin's biggest obstacle, he now sees technology as his main competitor. Fifteen years ago, immigrants to Canada had limited access to newspapers or television from their home country, unless a visiting relative arrived with a newspaper or a VHS box set. They were hungry for any content, and would watch ethnic TV no matter what was on. But with the Web has come instant access to media from around the globe.
Kashmeri has one newspaper from India delivered to his Kindle every morning; he no longer hungers for Indian content, but wants to see Canadian issues covered with a local South Asian perspective. "That to me is the new model," he says.
And ironically, Levin now sees CRTC regulation as necessary to protect his new venture. Internet TV is classified as a new media initiative by the commission and is largely unregulated, meaning that many people are simply downloading content online for free. "When it comes to the Internet, people have this anonymity, and they do whatever they want," he says. "Why would people subscribe to NexTV or watch ethnic content on cable they pay for when they could download it for free online?"
For that part of the business to grow beyond older members of Canada's immigrant communities, Levin believes the industry needs rules and stringent oversight from the CRTC to prevent piracy. "I don't know what the CRTC needs to do or how they need to do it, but they need to regulate this," he says. "If I have to have competition, I want it to be fair."
For all the changes that his company has faced, Levin says there is one constant that gives him confidence in the model he has established and in the direction he has taken. In Canada, while advertising whims shift, demographics are a sure thing, he says, and Ethnic Channels will continue to find new customers along with the natural flow of immigration.
"To me, this is the land of opportunity, because there's such diverse communities in Canada and you can cater to all of them," he says. "People come here, but they still need to be connected. Television is a drug, no matter where you're from."
This story originally appeared in the November, 2010 issue of Your Business magazine.