The Sun also sets

Sun News Network is struggling to find viewership and agitating for mandatory carriage with the CRTC. Can it survive without it?

 

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To get a sense of how Canadians feel about the Sun News Network, take a look at the submissions filed about it with the country’s broadcast regulator. “They are biased, racist, and not fit to be part of basic cable,” wrote one Ontario resident to the Canadian Radio-television and Telecommunications Commission earlier this year. Another criticized its “American-style Fox News approach,” while a third claimed its content is “not in line with Canadian values.” The channel’s supporters are equally passionate: It’s “my favourite TV channel,” wrote one Winnipegger. Sun News is “desperately needed for freedom of speech,” wrote another. A grandmother in Prince Edward Island called it “a breath of fresh air.”

All in all, thousands of Canadians have written to the CRTC about Sun News, owned by media conglomerate Quebecor Inc., in the wake of its application for mandatory carriage. If the application is successful, television providers across the country will have to include Sun News as part of their basic programming packages, whether subscribers want it or not. There’s a lot at stake, because without mandatory carriage, Sun News is projected to lose $19.5 million this year and stay in the red for years to come. It’s not uncommon for corporations to plead poverty when looking for assistance, of course, but the station genuinely seems to be in trouble. “It remains to be seen how long the service will remain in operation,” wrote National Bank Financial analyst Adam Shine in a note in January. There’s a good chance that if the CRTC application is rejected, Quebecor will be forced to shut Sun News for good—a huge failure for Quebecor, which has been desperately trying to expand its reach beyond Quebec.

Sun News is asking for mandatory carriage for five years to help build an audience, and requesting distributors pay it 18¢ per subscriber per month in English Canada and 9¢ each for French language households. That would give the network a guaranteed cash stream, boosting its estimated revenue this year to $25.3 million from just $8.3 million. But the network will have a hard time convincing the CRTC, which will hold hearings on April 23. Only a channel that makes an “exceptional contribution to Canadian expression and reflects Canadian attitudes, opinions, ideas, values and artistic creativity” is worthy of mandatory carriage, according to the commission. Currently, 10 channels enjoy that luxury, including the Weather Network and the Aboriginal Peoples Television Network. Sun News, a low-budget mix of blustery conservative opinion, reporting, and digs at the CBC, makes an odd contender—especially these days, when the CRTC is less inclined to impose additional costs, however small, on consumers. “Everything that has happened in the last 20 years has suggested that the commission is moving away from these required carriage regulations and is much more in favor of a market-based approach,” says Nick Ketchum, a consultant and former senior director with the CRTC.

Sun News attracted a lot of interest before it even launched in 2011. Critics branded the conservative-leaning channel “Fox News North” and were alarmed that Kory Teneycke, a former communications director for Prime Minister Stephen Harper, was heading up development. When the CRTC gave Quebecor the green light in 2010, Pierre Karl Péladeau, then Quebecor’s CEO, proclaimed the day marked “the dawn of a new era for Canadian news media.” He’d previously said, “Far too many Canadians are tuning out completely or changing their dials to American all-news channels….Quebecor sees an untapped market opportunity.” The network’s dire situation two years later suggests Quebecor miscalculated the size of that opportunity—or botched its approach.

Teneycke, vice-president of the network, argues the financial problems at Sun News are not due to its content, but its lack of distribution. The network is available in only 40% of Canadian households. “It’s a reflection of poor behaviour on the part of distributors,” he says. Telus Communications and Manitoba Telecom Services don’t carry Sun News at all. The case of MTS is particularly “perplexing,” given the network devoted a lot of airtime to Manitoba’s provincial election, and one of its personalities, Charles Adler, is well-known in the province and works from Winnipeg. “There’s no justifiable reason why MTS should not carry Sun News Network,” he says. (A spokesperson for MTS said the two companies couldn’t agree on terms, adding, “Although we have received very few requests from our customers for Sun News Network, we nevertheless would like to offer this choice.”)

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The channel is relegated to the higher-end of the dial with other distributors, and Rogers Communications (owner of Canadian Business) moved Sun News from channel 15 to a higher slot on its cable system, replacing the network with its own news station. In its submission to the CRTC, Sun News claims such practices amount to the network being treated like a “third-rate foreign news service.” Some Canadians also still rely on analog television, and Teneycke says these people tend to be older and have lower incomes, which puts them squarely in the Sun News demographic. But unless they subscribe to a pricey television package, Sun News can’t reach them. Last year, it hired a research firm that conducted focus groups with potential viewers and found “almost all” would subscribe if they could access the channel. (The sample size was limited to 68 people, however.)

For better or worse, the practices Teneycke maligns are fairly standard in the industry, and don’t directly explain why all subscribers should be forced to pay for Sun News. To answer that, Teneycke points to the 96 hours of original programming the network produces a week, more than many other Canadian channels: “We’re providing a unique offering in the marketplace, providing something that has a number of benefits that are much larger than ourselves.”

The network’s approach to news isn’t so much to report it, but to have its anchors and contributors debate it. This is partly by design—the network is modelled after American outlets like Fox and CNN—and because of the reality that Sun News doesn’t have local affiliate broadcasters across the country to provide video, unlike CBC and CTV. “They’re largely a network of people talking rather than people showing you things, and there’s limited appeal for that in an environment that’s already flooded with people talking,” says Christopher Waddell, director of journalism and communication at Carleton University.

The network skews heavily toward conservative opinion, which targets a demographic Quebecor believes is ignored in Canada. But some question how much demand there really is. “I can only assume if there was a lot of demand for Sun News, the cable and satellite companies would have been falling over themselves to put it on the air,” Waddell says. The ratings are far from spectacular. Despite reaching 5.1 million households, the average number of viewers at any given time was 7,900 in February, according to BBM Canada. That’s compared to 10,200 for Business News Network, 31,100 for CTV News Channel, and 57,000 for CBC News Network.

After two years, Sun News is probably better known for its embarrassments than any journalistic coups. Perhaps most notorious is a rant by Ezra Levant, host of The Source and author of Ethical Oil, last September. “These are gypsies, a culture synonymous with swindlers,” he declared in a monologue about a Roma crime ring. “And they come here to gyp us again and rob us blind as they have done in Europe for centuries.” Levant didn’t issue an apology himself until last month—with the CRTC hearing looming. (The network apologized last year.)

Teneycke doesn’t deny the CRTC hearing played a role in Levant’s apology. Opponents to the network’s mandatory carriage request reference it repeatedly in their letters to the CRTC. “The application created a forum for people who were upset about it to let their voices be heard,” he says. “A significant chunk of people complained about this issue, and we felt that clearly what we had done earlier was not sufficient.” With so much of the CRTC’s criteria for mandatory carriage focusing on making an “exceptional” contribution to the promotion of Canadian values, the event would appear to be a strike against the network. Still, Teneycke is confident. “I would say our case is as good as any other Canadian news channel that benefited from the same policy.”

In its application, Sun News says that CBC News Network and CTV News Channel received mandatory carriage in 1987 and 1996, respectively, and that it’s only asking for the same treatment. There are, in fact, differences between what Sun News is requesting, but perhaps more important is that times have changed. CBC News Network and CTV News Channel lost mandatory carriage status a few years ago, and the CRTC appears to be taking the well-being of consumers—and the fees they’re required to pay for television access—more seriously in its decisions. “The current trend is not to add more regulation and more requirements on what the consumer watches,” says Kelly Lynne Ashton, a media consultant in Toronto. In 2008, the CRTC essentially deregulated mainstream news and opened it to competition. “The hardest thing for Sun to overcome is the commission’s decision that news programming should be a competitive category,” says Ketchum. “It doesn’t need protection.”

There is some irony in Sun’s application, too. The talking heads on Sun News champion the free market, and rail against meddling by government bodies. Teneycke himself wrote an editorial in 2010 declaring mandatory carriage is “tantamount to a tax on everyone with cable or satellite service.” He’s less emphatic about branding it as a tax today. “I don’t know if I would use that word,” he says, pivoting again to the argument that distributors aren’t playing fairly.

While succeeding with mandatory carriage looks like a long shot, the network certainly has nothing to lose by trying. The big question is whether Quebecor would shut down Sun News if it doesn’t get mandatory carriage and continues to burn through millions of dollars. “We’ll cross that bridge when we come to it,” Teneycke says. “But let’s put it this way: there’s no realistic hope of it succeeding as a business if the distribution of it is so limited.”

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