CanWest Global Communications Corp. is applying for radio licences in three Canadian cities in an attempt to enter the Canadian market, a low-cost strategy to expand its media empire beyond television, newspapers and the Internet.
The applications to launch FM stations in Winnipeg, Kitchener-Waterloo and Montreal are in various stages of the regulatory process with the Canadian Radio-television and Telecommunications Commission.
In February, the commission heard CanWest's proposal to launch Smooth FM in its hometown of Winnipeg, a station that, if approved, will feature jazz music. Izzy Asper, the company's executive chairman, is a jazz enthusiast, especially the big band sound of composers George and Ira Gershwin.
"Our owners see it as our first step in the radio business in Canada," Gerry Noble, president and chief executive officer of Global Television Network Inc., told the Winnipeg hearing. He said CanWest is prepared to lose money for up to seven years on the radio station to establish a beachhead in the sector.
There are 12 rival Winnipeg applications, including proposals from Rogers Communications Inc. and Corus Entertainment Inc. A licensing decision is expected this summer.
In October, the CRTC is scheduled to hear applications to launch a new FM station in Kitchener-Waterloo. In addition to CanWest, nine companies have filed competing proposals, including Rogers.
In February, 2003, the commission is expected to hear competing proposals for a Montreal FM station. Eleven companies have applied for a licence, including French-language broadcaster Groupe TVA Inc.
For competitive reasons, Charlotte Bell, Global Television's director of regulatory affairs, declined to discuss the details of the Montreal and Kitchener-Waterloo bids.
The Asper family, CanWest's controlling shareholders, have said radio, along with billboards and outdoor advertising, is the key media missing from the company's Canadian portfolio of assets. In New Zealand, CanWest owns four radio networks, whose strong financial performance has been overshadowed by the company's two lacklustre television networks, TV3 and TV4.
The applications mark CanWest's second foray into this country's radio sector. In 2000, the company applied for radio licences to serve Vancouver and Calgary, but withdrew from the process.
Analysts interviewed said CanWest's plan to diversify its revenue stream via radio makes strategic sense. A slowdown in the advertising sector, especially national ad sales, has hurt the earnings performance of the company's extensive TV and newspaper holdings. The radio sector, largely dependent on stable local ad markets, continues to enjoy annual revenue growth of about 5 per cent.