Found: a new formula for arts funding in Canada. Step one: start a publicly-traded company whose business model amounts to marketing American media transmitted by satellite. Step two: negotiate with a federal agency to the point where they conditionally green-light the idea on the grounds that the transmissions can’t be technically stopped at the border. Step three: when the intended business model starts foundering, prepare for a cash-out, which first requires giving some money away.The Verge Music Awards, held last Wednesday night at the Tattoo Rock Parlour on Queen West, was a surreal sleight-of-hand. The money-leaking XM Canada — whose originating US content company does not technically exist anymore — spent well over $100,000 to hastily fulfill commitments that the Canadian Radio-television and Telecommunications Commission demanded as a condition of their license.
And how did they do it? By staging an event strangely identical in scope to the Polaris Music Prize, which as been the subject of much national press attention, and which will be handed out Monday.
A merger of the two satellite radio companies was federally approved stateside in July, over 16 months after it was proposed. XM stock immediately stopped trading, and shares of Sirius XM Radio Inc. began a serious plummet as it became clear that the long road to profitability wasn’t likely to get any shorter in the face of delivery systems that don’t require interaction with outer space — let alone a monthly subscription fee.
Not that the programming slate was ever without merit. Dozens of commercial-free music channels, uncensored free-form talk radio, and access to news and sports broadcasts previously confined to specific geographical areas seemed like a revolutionary idea, in fact, when the concept was conceived prior to the adoption of webcasting and WiFi.
Today, the combined programming output of Sirius XM Radio boasts about 20 million paying subscribers across the continent.
But the problem for the two Canadian companies that were belatedly allowed to sell satellite radio three years ago is that they can’t automatically follow suit in joining forces: Sirius Canada is privately held by Slaight Communications and the Canadian Broadcasting Corporation in conjunction with the American parent; XM Radio Canada remains traded on the Toronto Stock Exchange as Canadian Satellite Radio Holdings Inc., although the majority owner is second-generation fast-food mogul John Bitove.
And what has Bitove been doing ever since the US satellite radio merger was proposed? First, trying to get a license for an HDTV network. After that was turned down in April, he started a company that won lots of wireless spectrum in a May auction, and is busy laying the groundwork for a new cellphone company, DAVE.
Wait, what of that satellite radio thing?
Given the haggling that was required to essentially beam an American media service into Canada, the last thing Bitove wants to do is make the same CRTC question the sincerity of assurances that XM could be the greatest thing to ever happen to struggling artists in this country — helping them to be heard across the continent via these new border-free airwaves.
Compromises hashed out during the drawn-out approval protest in 2005 — which involved a failed appeal by several Canadian broadcasters to the federal Liberal cabinet — included the requirement of a minimum 85 per cent CanCon channel focused on “emerging” homegrown artists, and the floating of 5 per cent of gross revenues to Canadian Talent Development, half of that amount earmarked for French-language acts. (XM Canada applied to the CRTC to make those conditions less financially onerous — and were turned down.)
While its cash flow has just recently inched above zero, XM Canada reported $10.8-million in total revenue in the third-quarter ending May 31. Ain’t socialism great?
But the firm was acting weirdly defiant in the face of the American merger approval, with Bitove even getting XM Canada president Michael Moskowitz to bluster to The Globe and Mail, “You can merge or you can go it alone, and we'll evaluate those two options.”
While reports claimed the CRTC wanted XM and Sirius to “immediately explain any merger plans” amidst competition concerns, the only message offered to $14.99-per-month subscribers to date is that they’re conducting business as usual, assuring the receivers — an increasing number of which are pre-installed in new cars — will not become inoperable in the process.
Meanwhile, the debut of the options afforded by the American merger will take place October 6, with packages available to Sirius and XM customers offering content previously exclusive to one service or another. The elimination of all duplicate music channels reportedly comes next.
Sounds like time is running out, then, for XM Canada to function as an entity separate from Sirius Canada.
Which surely explains the hasty invention of the Verge Music Awards. The promise of $25,000 cash to two Canadian acts in rotation on XM channel 52 earned enthusiastic ink — including a Street Spirit column in EYE WEEKLY — although there was a conspicuous lack of detail about why XM Canada was really doing this.
A rival to the similar intentions of the $20,00 Polaris Prize, itself supported in part by 5 per cent funding requirements by Sirius? Sure, sounds good. Better still that The Verge channel is recognized by the Canadian indie-rock cognoscenti, at best, as an obscure imitation of CBC Radio 3 — which is beamed across the continent via Sirius in addition to its primary platform online.
Yet, save for a flag touting the merits of XM’s programming, sound quality and coast-to-coast signal on one side of the stage, this so-called awards ceremony at the Tattoo Rock Parlour was devoid of any sales pitch. That would, after all, defeat the purpose.
Rather, robust sets from ex-Death From Above 1979 guy Sebastien Grainger & the Mountains, Montreal power popsters The Stills, and headliners Broken Social Scene were the focal point for the room, and any listeners inclined to eavesdrop on such a concert over satellite radio late into a Wednesday night.
Somewhere in between came the disposal of two rounds of $25,000 based on an online voting process that found The Weakerthans of Winnipeg considered Group of the Year out of 150 choices, and Hey, Rosetta! of St. John’s beating out 72 others for Album of the Year. A victory for their respective abilities to motivate enough fans to click a box.
However, it’s a sure bet that the total amount of money doled out to the three bands performing on this broadcast exceeded the $50,000 in prize winnings. The generous food and drink also helped fulfill XM Canada’s requirement — even though the third annual Polaris ceremony, whose grand prize is determined by a jury of media people, has earned far wider coverage. And also an exclusive live broadcast on Sirius, it was announced last week. Was this meant to telegraph a joint message to the CRTC that one satellite radio provider will do more than enough for indie CanCon? Sure looks, and sure sounds, like it.
Despite a fairly indifferent crowd of industry people and interminable time lag between live acts, the Verge Music Awards show could make one wistful for the days when a four-hour broadcast of a rock ‘n’ roll event would earn the rapt attention of teenagers listening in their bedrooms. That’s hardly been the satellite radio demographic, however.
The broadcasting style developed by XM, designed seven years ago as the antithesis to FM, also remains appealing. Rather than DJ patter entirely designed to sell something, the laconic approach can make the listener feel like interesting secrets are being divulged.
The Verge also has a more insistent sensibility than the frequently twee CBC Radio 3. But this sort of thing is the stuff of low-overhead internet radio, not a public company that had designs on marketing a technology that carried a monthly subscription fee.
Now, with evidence that all their dues have been paid to CanCon, the 450,000 subscribers of XM Canada can be sold off to join 750,000 subscribers of Sirius Canada, and all the players involved will end up pleased — especially wireless-bound Bitove, clearly eager to get into a better business.
That is if the CRTC falls for it this fall, which they will be forced to do, because the merger was approved stateside for the firm that controls nearly all the content on satellite radio.
A majority Conservative government, supportive of greater foreign investment in media companies, wouldn’t complain, and the 2005 satellite radio approval will be cited as precedent.
In the meantime, Canadian artists performing at this year’s CMJ Marathon in New York City can take advantage of $1,000 travel grants — courtesy of XM Canada, who seem just a little too eager to burn those obligations off.
Not such a bad deal while it lasts.
Source : Eyeweek
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