The Internet poses a smaller threat to Canadian television broadcasters than many of the industry's doomsayers believe because the Web is still "an expensive way" to distribute TV shows compared with cable and satellite feeds, a new report says.
The report, which will be debated Wednesday at one of the industry's largest annual gatherings in Banff, Alta., comes six months after a study by IBM titled "The end of television as we know it" predicted Internet distribution would be a death knell for broadcasters.
In the new paper -- called "The Future of Television" -- the Nordicity Group Ltd. says the risk posed by the Internet may be overstated. Nordicity is a consulting firm specializing in policy and economic research for the TV sector.
Bandwidth costs associated with broadcasting over the Web, particularly in high-definition (HD) formats, remain considerably higher than the mass distribution offered by cable and satellite TV, the report says.
Internet broadcasts also reach smaller audiences for advertisers than traditional, "linear" television can, though the Web is better at reaching specific types of viewers, it says.
"We accept that on-demand television is threatening the linear model . . . but we argue that the end of linear television is hardly nigh," the report says, adding that high-definition television "would tax [the Web's] capacity."
The report comes amid concerns in the technology sector that the proliferation of Internet video, including on-demand and downloadable programs, could stretch the bandwidth capacity of some websites beyond their limit.
Though the paper acknowledges the impact of the Internet is significant, its view that television could prove resilient into the future is a contrarian one compared with other studies in the past year.
Analysts and academics alike have predicted the decline of television audiences as viewers migrate to the Internet, where they have control over what they watch and when.
Among the most prominent is the IBM study, published in January, that suggested the TV industry could be drastically altered in the next five years by the advent of alternative ways to watch programs.
"Canadian-based content distributors will need to find compelling ways to bring the customer to them -- and thereby, to their advertisers," the IBM report said.
Analysts agree that bandwidth costs are a significant hurdle for Web broadcasts, but they are dropping significantly each year, said Jeff Leiper, who tracks emerging technology for Yankee Group Canada in Ottawa.
"The price has come down to the point where it is viable, but certainly [with] the economics of providing television either through cable or over the air, there's still an advantage there," Mr. Leiper said.
One of the most popular independent video distribution sites on the Internet, YouTube, is not yet profitable because the advertising on its site doesn't cover its massive bandwidth costs.
While traditional TV still draws mass audiences, Mr. Leiper said viewer tastes are increasingly shifting away from the old model of scheduled programming, which should be a concern for broadcasters who don't adopt Internet strategies of their own.
"While traditional broadcasting has the economics, audiences are demanding a more interactive experience, and that's the tension of the industry right now," Mr. Leiper said. "Television may be cheaper, but if the audiences stop watching it, all the economics be damned."
The debate comes at a time when Canada's federal broadcast regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), is preparing to launch a review of the television sector, the first since 1999.
The process is expected to look at many issues facing the industry, including the impact of new technology and whether federal regulations can help broadcasters navigate the changing industry more successfully.
The review is expected to be unveiled by the CRTC on Monday at the Banff World Television Festival, which draws networks from around the globe. Hearings would be set for November.
The federal government is also looking at assembling a panel to study how technology is affecting Canadian broadcasters, a move that could be announced tomorrow.
