Len Cochrane, Part 1: Satellites

Interviewed by Fil Fraser at Banff World Media Festival on June, 2011

My name is Len Cochrane. I am President of Teletoon; we have four Canadian networks, two in French and two in English, with over 8 million subscribers to Teletoon and over 8 1/2 million to Teletoon Retro. I joined this industry in 1983 when I went to work for Canadian Satellite Communications in Edmonton. I worked there for a couple of years and transferred to Toronto in 1990. André Bureau, who was the first president of Canadian Satellite, brought me to the Family Channel, where I worked until 2000; then I went to Teletoon. I have been there ever since.

Fraser. You were there at the beginning of CanCon when it was about satellites and not about content. Can you talk about how Canada was the leader in that whole field?

Cochrane. It was actually a guy called Rolf Hougen who owned the cable company in Whitehorse. He cycled tapes so that folks in Whitehorse could watch Hockey Night in Canada at five o'clock on Sunday, instead of five o'clock on Saturday. Rolf was trying to figure out how we could do it. He decided it could be done by satellite.  So he got five broadcast partners to put up $1 million each and then we uplinked for Canadian services: BCTV, ITV, TVA, CHCH.  Those are his four partners. But we quickly realized that the cable companies that wanted to receive programming by satellite wanted to have the American services. So we uplinked the 3+1 from Detroit. When we did that, we had a business.

F.  Which were they?

C.  The ABC, NBC, CBS, plus PBS.

F.  Up until that time, people were doing this by microwave, placing big antennas on the border to try and catch the signals and get them by various means into local cable systems.

C.  Yes. A good example is Fort McMurray, which had a microwave system that they owned all the way from Edmonton. They were able to let go of that (I think it was a deal with Telus, or Alberta Telephones at the time) and receive our signals crystal-clear. The problem was that every time you move a microwave you have descending quality. We really only had one up and one down. So the signal was 98% good.

F.  Can you tell me about the controversy that surrounded satellites at the time?

C.  When we started to move into the large areas, the first replacement signals we had were in Saskatchewan. Regina and Saskatoon were microwaving Middle America signals that were not very good. They were very small market. We went in and replaced the signals and actually CRTC turned them down, Fil, the very first time.  What the CRTC wanted to see was whether there was a demand from the consumer to have the signals. Once we got Saskatchewan, everything fell into place. We go out into the larger markets.

F.  You are part of a Revolution.

C. It was a very exciting time; we had a great team. When I joined the company in 83, we were losing $1 million a month in the Cable Market Services Division. When I left, we were making $1 million a month. We had to go public because the partners did not want to put any more money in; so that's what really saved us - going public.

F.  What were the challenges of getting access to the satellites, which were still pretty new, and which Canada pioneered? What kind of deals did you have to cut?

C.  It was very expensive because there was no multiplex in there. Today you can get ten signals into one transponder; back then, we could get one. Until we had enough customers on the ground, we lost money.  One of the things we did was to go to Newfoundland and build 265 cable systems under a regional cable concept that was a kind of subsidiary of CanCon, but always with an entrepreneur.  All of a sudden, we had created 265 customers in Newfoundland. The signals all came from us.

F.  I recall, and I'm sure you do, the great anticipation in the industry waiting for the next satellite to go up so that we could carry more signals.

C.  I think the big thing for us was when the technical guys figured out how to multiplex.  All of a sudden, we could take our eight signals and have them in one transponder instead of eight.  You can imagine what that did to our business plan, reducing the cost of delivery.

F.  What is a multiplex?

C.  I have no idea!

F.  But you were able to tap into that and created a wonderful business.

C.  It also created a wonderful business for specialties because, instead of paying $400,000 a month, they were able to pay $40,000 a month for the signal. So, all of the small independent guys who wanted specialty channels, found that their business plan were now realistic.

F.  So, this means that we would not have had specialty channels without this technology.

C.  It would've been a lot tougher.

F.  When you and I were part of something called SPTV [Specialty and Premium Television Association], we were struggling against the big guys to get some traction.

C.  There is no question that at the time the greatest thing for us to do was to band together and form SPTV; without that we would've been trampled to death. They were fun times; we were doing things that were pioneering. The idea of having a lot of strong independents together made us a force. The Commission listened to us; it was something that was badly needed and it served a huge purpose.

F.  How do you make the transition from being in the delivery business to being in the broadcast business?

C.  Well, I always thought that the delivery business was the broadcast business, just another way to get the signal. I think that when you run a business, Fil, you run a business, whether it's widgets or broadcasting. You must have a basic sense of business; when you’ve been successful at one business there's no reason you shouldn't be successful at another. Another thing is that when I joined Family, we were a very small PayTV company; we had something like 200,000 subscribers. When I left, we had about 3.8 million subscribers. That changed the business model: we went from being a pay-TV service into an extended basic service.

Len Cochrane, Part 2: Regulation