(The Canadian Press circulated the following on November 17.)
OTTAWA — Via Rail wants to sell some tracks.
The Crown corporation is looking for a business partner to set up a web-based entertainment store so customers can download songs and videos for a fee.
The proposal to compete with giants like Apple Inc.’s iTunes store was issued electronically last week, as cash-strapped Via tests the corporate waters for new revenue sources.
“Via Rail Canada … is looking for a strategic partner to develop, operate and manage a web entertainment online store similar to Apple iTunes store or the Bell store,” says the proposal.
“The digital content … (could) be rented, bought through an Internet connection, stored and viewed across different devices or on a proprietary device. … Via is expecting a share of profits.”
The Crown corporation, which lost $200 million last year, is asking for so-called “expressions of interest” by Dec. 15, at which time it will decide whether to put the proposal out to formal tender.
“We don’t really know if we want to do this or not,” spokesman Malcolm Andrews said in an interview from Via Rail’s Montreal headquarters.
“We’ll decide if we want to do it depending on the expressions of interest that come in.”
Potential partners will have to demonstrate that they have existing relationships with major studios that can provide the content, which must be available in a minimum of French and English and “accessible from anywhere in the world where Internet services are available,” says the document seeking interested parties.
The proposal includes music, podcasts, films old and new, syndicated TV shows and some content produced by Via Rail itself.
Via Rail introduced wireless Internet on its trains and first-class lounges in central Canada several years ago, which has been a hit with many travellers.
Andrews said surveys and focus groups show customers are now looking for entertainment options, such as the movies and music that passengers now enjoy on many competing airline flights.
Andrews said the proposal is primarily intended to deliver music and movies to people with laptops travelling on Via trains, though the electronic notice specifically says the entertainment store should be available to customers anywhere, and would include delivery to hand-held devices, such as iPhones.
“It’s not our core business, obviously,” said Andrews. “We’re always looking for innovative ways to try and add value for our customers.”
No expressions of interest have arrived so far, he added.
Via Rail will be facing some tough competition if it proceeds with the proposal.
Apple’s iTunes music store, which first appeared on the web in 2003, has seen phenomenal growth. By June this year, it had sold five billion songs, in addition to millions of videos and TV episodes.
In 2007, the federal government had to cover a $200-million operating deficit at Via, or an average of $48 for every ticket sold.
The corporation says passenger loads are up about 12 per cent so far this year, and revenues are up about seven per cent.
Via trains are chronically late, with only about 72 per cent of trips in central Canada arriving on time.
A year ago, Ottawa announced $516 million in capital funding for Via Rail over five years, much of it to rebuild the corporation’s geriatric F-40 locomotives.