More choice could be coming to a television near you, as the government steps into the TV industry to ensure that subscribers aren’t forced to pay for channels they aren’t interested in watching.
In a series of weekend interviews, Industry Minister James Moore said Wednesday’s Throne Speech will unveil the government’s plans for a “pick and pay” cable system, something the industry has been inching toward but hasn’t quite managed to figure out as it looks for ways to compete with online services such as Netflix that offer unprecedented flexibility.
It’s part of the government’s consumer friendly agenda heading into a new session of Parliament. Indeed, one of the main tenets of Canada’s Broadcast Act is that the country’s television industry “should provide efficient delivery of programming at affordable rates, using the most cost effective technologies available at a reasonable cost.”
Here’s what it means:
What is pick and pay?
Most television companies sell their channels in bundles. That means if you want something you really like, you need to buy a bunch of other channels that you may not like in order to get it. Someone who just wants a general interest sports channel added to their package, for example, may find themselves forced to subscribe to additional channels that cater to niche interests.
With a “pick and pay” package (also known as “a la carte”), customers can add specific channels to their basic packages without having to subscribe to a larger package.
Why don’t I have that already?
There are no regulations keeping television companies from offering specialty channels on a standalone basis. If they wanted to do it, they could break out any single channel and set a price.
But specialty channels rely on subscriber fees to survive – more subscribers means more money. Cable and satellite companies are worried that offering pick and pay packages will be the end of many of the channels that fill their programming grids.
The logic goes like this: Some people like The Escargot Network (not a real network), but most people don’t. But it’s a pretty good channel and the television company is committed to offering it to subscribers – so it lumps it in with other cooking channels to subsidize its operations and keep prices lower for those who do want to watch.
There is another complication with speciality channels – the companies that own the channels (such as Bell and Rogers) often require that other television broadcasters reach a certain number of subscribers. In order to reach those numbers, channels are often placed in bundles. Existing contracts would need to be revisited should the government try to move too quickly.
Does anyone have more choice than I do?
Probably. Vidéotron subscribers in Quebec are allowed to add channels five-at-a-time to their basic packages. Telus also allows subscribers to add single channels to its basic package for about $4 each.
The country’s other providers aren’t against the idea, but have warned it could lead to higher costs.
Rogers Communications Inc., which is generally supportive of the move toward more choice, ran a pilot program in 2011 that charged $20 for a small basic cable package, and an extra $26 and up for an à la carte option that allows subscribers to choose their own bundles of 15, 20 or 30 additional channels.
Earlier this year Bell Media president Kevin Crull said consumers may find out they’re actually getting a good deal already considering the number of channels they receive in typical packages. “We find consumers watch a lot more than they think they do; they discover programming by surfing and looking through the guide,” he said.
When would this happen?
The Throne Speech is just an outline of intentions. It would likely take months before the details are worked out. And while this is all happening, the Canadian Radio-television and Telecommunications Commission is holding its own consultations, starting Oct. 24, into the future of television. Among other things, it plans to ask Canadians how the broadcast system should work – and pick and pay is one of the things it wants to hear more about.
“Your future success rests, in large part, on listening–and responding–to what Canadians have to say,” CRTC chairman Jean Pierre Blais told television executives earlier this year as he encouraged them to find ways to remain relevant as consumers look to other choices.
What can I do in the meantime?
There are about 12 million households in Canada that subscribe to cable, and another 2.5 million or so (many of them the same households) who pay for a monthly Netflix subscription that gives them access to on-demand programming.
Anyone who wants access to specialty channels without buying them in bundles still doesn’t have a lot of choice – while most of the prime programming (Breaking Bad, Game of Thrones, Mad Men) is (legally) available elsewhere it can be prohibitively expensive to buy shows one-at-a-time if you watch a lot of television.