If the upcoming Sun TV News channel can attract a similar demographic audience to the right-leaning Fox News, in the U.S., it could be attractive to advertisers and convince cable companies they should offer it to subscribers, says the former head of the Competition Bureau of Canada.

Former competition commissioner Sheridan Scott, who has also held posts at the CRTC, CBC, and Bell Canada, said it's almost certain the new all-news channel, which is owned by Quebecor Media and will be run by former PMO spokesman Kory Teneycke, will not get the Category A "must-carry" licence it has requested from the CRTC. She said the challenge for Mr. Teneycke will be to convince cable companies and advertisers that the new channel, which Mr. Teneycke promises will be more "populist" and less "boring" than its competitors, is truly something different that can attract viewers.

The key for Sun TV News, which is aiming to be on the air in January, may lie in pitching itself as a news service that can attract viewers who aren't watching either of the existing all-news channels, CTV News Channel and CBC News Network, said Ms. Scott

"They should have a very good idea of who they're going to appeal to. And to the extent you're a niche audience and it's an unserved part of the market that could be interesting for advertisers," Ms. Scott said. "Unserved in terms of a particular demographic that advertisers might want to reach. Advertisers often are segmenting the market and looking at whether they want a younger demographic, an older, a male, a female, those sorts of things that they would look at. Depending on what their numbers look like, where they think their appeal will lie, that might be part of their sales proposition to the advertisers and also to the cable companies. They would say, 'You would have people who will pick your service rather than another cable company's service,' because they want to have access to our programming."

In a recent interview on CBC Radio's The House, Mr. Teneycke said most Canadians aren't watching the two all-news channels available to them, which he sees an opportunity for Sun TV.

"We think there's a big space in the market. I think most of what's on cable news, today, in Canada is pretty flat. I don't think it actually gets to the heart of debate on most issues; I think the news stories that end up on the air are too often of little relevance to Canadians and I base that opinion on the fact that most Canadians aren't watching and that rates of viewership in Canada are much lower than they are in other countries, so all of that, from a business perspective, speaks to the fact there is an opening in the marketplace and that's an opening we're hoping to fill," he said.

Both CTV News Channel and CBC News Network derive the majority of their revenue from subscriber fees; CTV charges 14-cents per household monthly, from which it made $15-million last year, while CBC charges 63-cents and brought in $63-million from subscriber fees. CBC's all news channel has 10.6 million subscribers, while CTV News Channel has 8.5 million subscribers. Both have Category A licences that force cable companies to carry them, but the CRTC has signaled it will not grant any more such licences, and now prefers to let the marketplace play a stronger role in deciding the fate of TV channels.

Starting next year the CRTC will no longer protect news and sports with must-carry licences, which means that cable companies would be able to drop CTV News Channel and CBC News Network if they wanted.

"What they're changing is the limitations on new entrants that existed before. The CRTC tends to give out licences with some form of exclusivity, and so you get your licence and you don't have so many competitors because they won't license those additional competitors. That's what they've changed; they said for sports and news they're going to allow people to offer service and compete for subscribers and so that's the big switch. ... What it means is one is likely to see more people entering who think that they can succeed because of the popularity of their service," Ms. Scott said.

Paul Sparkes, senior vice president at CTVglobemedia, said he's not worried that CTV New Channel will lose its privileged licence status and welcomes the competition from Quebecor.

"We welcome competition, the more the merrier. We have no objection to Sun News coming in," he said.

Fox News Channel, which Mr. Teneycke is said to have been inspired by in his pioneering of Sun TV, is the highest rated all-news channel in the U.S., beating out both CNN and MSNBC. In 2009, Fox News's primetime viewership averaged 2.8 million, while CNN averaged 1.3 million viewers, and MSNBC averaged 1.1 million viewers.

A 2008 study by the Pew Research Center revealed that the cable news audience is now larger than the network news audience, and that viewers also tend to be younger and more educated. Only 21 per cent of those under 30 regularly watch an evening news show, compared with 36 per cent who regularly watch an all-news channel. The audience also tends to be predominantly male; among men younger than 30, 42 per cent watch cable news, compared with only 29 per cent of women under 30.

The study also found that over the last decade cable news audiences have become increasingly polarized in terms of their political views. Between 1998 and 2008, the share of Republicans who say they regularly watch Fox News Channel rose from 14 per cent to 36 per cent, while the number of Republicans who watch CNN declined by eight points. Similarly, the share of Democrats who regularly watch CNN increased from 25 per cent to 33 per cent, and Democrats who watch MSNBC increased from 10 per cent to 18 per cent.

Democrats makeup a greater share of the Fox News audience than Republicans do of CNN's audience, the study also found. Among regular Fox News watchers, 39 per cent were Republican, 33 per cent were Democrats, and 22 per cent were independents. Of CNN viewers, 51 per cent identified as Democrats, 23 per cent were independents, and only 18 per cent identified as Republicans.

Democrats comprise a larger share of the general public, however, the study found that in 2008 36 per cent identified as Democrats, 29 per cent were independents, and 25 per cent said they were Republican.

Although Mr. Teneycke, in an interview with CTV, recently lamented the "incumbency" advantage enjoyed by CTV and CBC because of the privileged licenses that they've had for 13 years, and 23 years, respectively, he said the freer marketplace being ushered in by the CRTC next year will ultimately play to Sun TV's advantage.

"It is going to move to a market where consumers will pick à la carte what they will want as a cable package. We're not there yet. It is going to be a far more market-driven system over time. It is going to be good for everyone. May the best station win," he said.

hmacleod@hilltimes.com

The Hill Times