BUSINESS

HBO Canada, MTV Canada, Now Cartoon Network Canada: U.S. Brands Dominate North Of The Border

03/25/2012 06:00 EDT | Updated 05/25/2012 05:12 EDT
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TORONTO - If you've noticed that your cable package looks a lot more American these days, with more brands like HBO, MTV and Fox's FX Canada, you're not alone, and Canadian TV executives are betting that increased familiarity those sexy names will convince you to tune in.

The trend has picked up momentum, particularly over the past year with the planned launch of no less than five new U.S.-branded networks in Canada, including Oprah Winfrey's OWN network and ABC Spark, which debuts on Monday.

Later this year, the Cartoon Network lands in Canada as part of a joint venture with Teletoon, bringing with it the popular Adult Swim prime time lineup, a programming block of mostly animated shows targeting adults, which have seen a ratings boom in the U.S. for years.

The pairing of U.S. brands and Canadian broadcasters is part of a proven marketing strategy that has grown in favour with local executives over the past decade as they look to cut costs and find more reliable business strategies.

Just over 10 years ago, the Canadian TV landscape was peppered with a few U.S. names like the IFC Channel and Discovery Channel, and far fewer cable channels cluttering up the landscape in general.

"The consumers have a lot more options today," said Kaan Yigit, a media analyst at Solutions Research Group.

"Building a name for yourself — for any channel — is much harder work. It's far more expensive."

And history has left a long list of names in the Canadian branding graveyard, such as Drive-In Classics (which became the Sundance Channel), Viva (now Oprah's channel) and Dusk, which ended programming on Friday and will re-emerge in the lineup as ABC Spark.

"It's simply more cost effective for the broadcaster to rejig the American brand and Canadianize it," Yigit said.

Media companies have taken that fact and turned it into a strategy that, in some respects, has changed the course of their business plans.

Just over a year ago, Teletoon's owners Corus Entertainment (TSX:CJR.B) and Astral, had applied to the CRTC for a licence to launch Teletoon Kapow!, a spinoff of its main animation channel, geared towards cartoon action series and comic book trends.

Since then, the company rejigged its plans so that the channel space will instead become home to the Cartoon Network. Unlike Kapow!, the Cartoon Network launch can ride the coattails of the Adult Swim publicity seeping in from U.S. media.

"Cartoon Network is a very strong global brand," said Trent Locke, vice president of business operations at Teletoon Canada in a recent interview.

"A lot of the (Adult Swim) demographic go to watch that content online and illegally download it."

Trent hopes that the launch of the new channel will stop some of the outflow, which he said also goes to "over-the-top" services, industry-speak for alternatives to cable such as streaming programs on Netflix or buying content from Apple's iTunes service.

Last December, research firm The Convergence Consulting Group, estimated that about 100,000 Canadian households cancelled their cable packages in 2011, opting for free over-the-air signals or the growing collections of streaming content online.

A change in viewing habits has only increased the urgency of establishing solid and long-term cable brands in Canada, although executives are careful to not show too much concern.

Earlier this year, Corus president and CEO John Cassaday told analysts on an earnings conference call that he sees the current decline in its premium pay TV channels as "being stable'' and that he expects a "decent uptick'' in the coming quarters.

However, executives might want to consider that not all American brands channel have had smooth sailing in Canada.

In the final days of Canwest, the broadcasting giant had mixed success with a group of local over-the-air stations that it rebranded as E! channels.

Canwest's strategy was to create a hybrid of the tabloid entertainment channel from the U.S. that also included local news broadcasts. Bell Media acquired the Canadian rights for the E! name after Canwest folded and rebranded its Star! channel.

Then there was U.S. retro channel TV Land which also went Canadian for awhile before it was rebranded as Comedy Gold, inspired by the Canadian-branded Comedy Network.

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