One of Canada's biggest broadcasters is placing a bet that the future of radio isn't necessarily in radios.
Rogers Communications Inc. may learn in the next month if it will get permission to start a pay audio service aimed at listeners outside of conventional radio, which could eventually be used to stream music to cellphones and Internet receivers in cars.
The Canadian Radio-television and Telecommunications Commission began poring over the proposal in March. It is the latest step in Rogers' strategy to bundle services for its cellphone, cable and Internet businesses.
Rogers, which operates 51 AM and FM stations across the country, wants to create a 30-channel pay audio network, with a variety of music and talk formats. Much of the content will be original, but the company also plans to mix in conventional programs.
Rogers Communications
If approved, the new business would face stiff competition in the rapidly fragmenting world of radio. It would battle commercial radio, satellite radio, streaming audio on the Internet and music downloads on phones. It would also fight for a piece of the pay audio market offered by services such as Max Trax and Galaxie, which are carried on cable and are often used in restaurants, bars and retail outlets.
Rogers officials say the company doesn't want to limit itself to any one of those markets with the proposed service.
"It's going to be about content that's going to be available on a number of different platforms whether its some kind of receiver in your car, some kind of receiver you're carrying around with you, or some kind of receiver in your house," said Alain Strati, vice-president of regulatory affairs for Rogers Media. "It's the same thing with satellite radio. It's called satellite radio, but it doesn't have to come from there."
Satellite radio providers XM and Sirius have negotiated deals to put their channels on cellphones in Canada, including those on the Rogers network, in an effort to expand their monthly subscribers, who pay about $15 a month. Meanwhile, Internet radio services are trying to position themselves for the day when wireless Web access is readily available in cars.
Pay radio can be a tough market, though. Satellite radio companies have spent heavily to attract customers with exclusive content.
Rogers estimates its pay audio service will be profitable in its second year, and will post more than $2-million in revenue by its fifth year. The idea has faced opposition from the CBC, which owns the 45-channel Galaxie service and also holds a 40-per-cent stake in Sirius Canada. The public broadcaster argues Rogers' proposal to include talk and news programming is a threat to its satellite radio operation.
Other companies have contemplated similar ideas before. CHUM Ltd. considered launching a subscription service in 2005, but never pursued it. A decision on the Rogers proposal could be made by June.
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