CHSN makes another bid

The canadian Home Shopping Network wants to get consumers with the urge to splurge plugging into their tv sets more often.But that could be hard without some major adjustments to the federal broadcasting regulations, according to many industry experts.While home shopping...

The canadian Home Shopping Network wants to get consumers with the urge to splurge plugging into their tv sets more often.

But that could be hard without some major adjustments to the federal broadcasting regulations, according to many industry experts.

While home shopping tv programming is moving upscale and high-tech south of the border, restrictions on how merchandise can be sold on the tube here at home have relegated Canadian home shopping to the realm of bargain baubles and cubic zirconium.

But chsn hopes to change all that.

The Toronto-based company is pitching a new argument to the Canadian Radio-television and Telecommunications Commission this month in a submission for a licence to operate a 24-hour, tele-shopping specialty programming service using full-motion video.

‘Times have changed,’ says Colin Watson, president of Rogers Communications, which controls chsn.

‘I think the crtc will see that the current restrictions should be updated because there is a demonstrable need for a service like this with many shut-ins and older people,’ Watson says.

Current crtc regulations restrict marketing channels – both home shopping and infomercial specialty services – to using still frame pictures known as alpha numeric images.

Jim Sward, former head of Rogers and newly appointed president and chief executive officer of the Global Television Network, says he would also like to see the restrictions lifted.

‘While I think there are valid bureaucratic reasons as to why our shopping service in Canada moves in little jerky movements and looks laughable, I hope things will change,’ Sward says.

‘It seems rather silly now – you can almost be a broadcaster as long as you make your service look ridiculous,’ he says.

‘Americans land here and look at it, and then roll over with laughter.’

However, traditional broadcasters have long been opposed to giving chsn the green light to go full motion.

When chsn applied for full motion in 1986, the Canadian Association of Broadcasters lobbied against the application.

In a written submission to the crtc, cab expressed concern over the impact chsn would have on private broadcasters’ ad revenues:

‘It is important to note that these same advertisers currently rely on private broadcasters as a principal means of marketing their products via the Canadian broadcasting system, cab said.

‘The kind of service chsn proposed will certainly have a direct impact on its continued availability,’ it said.

In rejecting the proposal in 1989, the crtc argued that chsn had not proven it would necessarily strengthen the Canadian broadcasting system.

Drawing on policy guidelines enunciated in 1986, the crtc also said chsn had not demonstrated that it would contribute to the diversity of high quality programming or provide new opportunities and revenue sources for Canadians.

Dennis Kwasnicki is not hopeful that there will be changes this time around.

Kwasnicki is president of the Consumer Savings Network, a new still-frame infomercial channel that is scheduled to begin operations sometime in October.

He says traditional broadcasters will likely try to protect their turf once again, adding there is no doubt the advertising revenues of traditional broadcasters would be affected dramatically by changes giving specialty service tele-shopping channels the right to use full-motion video.

‘If I were a traditional broadcaster, I’d fight it to the end,’ Kwasnicki says.

‘Why would Coke or Pepsi run a 60-second spot that costs $450,000 to produce, and then go on-air with me, with considerable exposure, when it costs them a lot less to produce it?’ he asks.

But eventually things will have to change, Kwasnicki says.

Cable channels are proliferating, creating a setting that is ripe for specialty home shopping channels.

According to A. C. Nielsen, an estimated 35% of the potential Canadian viewing audience already tunes in to chsn and Real Estate Plus, an electronic listing book of residential properties.

In the u.s., big retailers such as R.H. Macy are not only using home shopping channels, some retailers have plans in the works to launch channels of their own.

But, for many industry observers, there seemed to be no surer sign of the industry’s potential than when, earlier this year, Barry Diller, former head of the Fox network, took the helm of QVC Network, a major u.s. home shopping network.

Within months, Diller had quarterbacked a merger between qvc and Home Shopping Network, qvc’s chief rival, and announced plans for yet another network called Q2.

Q2 is expected to combine entertainment and televised shopping in programming formats that have yet to emerge.

Here at home, the crtc is sifting through 50-plus applications received by the deadline of Sept. 15 from would-be broadcasters who are scrambling for the right to launch new specialty channels.

chsn is among the applicants with its request to operate a full-motion tele-shopping channel and, according to an industry source, at least one other party has applied to operate a similar service.

Applications have also been filed for specialty channels in the areas of comedy, religion, country music, an all-news network, a vitality network, a discovery channel, and a ‘yuppie’ channel – aimed at upper-income people who watch little tv- as well as both a women’s and a senior’s specialty service and a hobby channel.

It is not hard to see how some of these channels could evolve into something which is more marketing-oriented, analysts say.

For example, a hardware store could sponsor a half-hour ‘how-to’ segment on the hobby channel, showing viewers how to build kitchen cupboards, all the while offering up tips and suggestions about products available in their stores.

Further, as systems upgrade and the much-touted multi-media highway emerges, home shopping promises to proliferate in ever more elaborate forms, ultimately evolving into a kind of video mall.

Plans are now being developed for high-tech, interactive services.

Kwasnicki, for one, says he expects the Consumer Savings Network will offer consumers an interactive service within 18 months of its launch.

But it is not clear what role the advertising community will play in this new retailing frontier.

The growth of infomercials is so strong in the u.s. that some agencies are now spinning off separate divisions to focus strictly on their production.

But some observers say home shopping could eventually enable retailers to cut their conventional ad budgets sharply, cannibalizing agency revenues.

Others, such as Ev Elting, president of Grey Advertising in Toronto, are more optimistic.

Elting says the role of the advertising agency will evolve to keep pace with these retailing changes.

‘You can bet we’ll still be there,’ he says.

‘After all, the function of the advertising agency is to bring professional communication to help manufacturers and retailers move products to consumers.

‘We’re communications experts. That doesn’t change because of the direction home shopping is taking.’