Canada’s largest television providers don’t want to see any new channels added to basic cable and won’t support more funding for channels that are already there, arguing that consumers have enough choice as it is and anything that raises prices will drive its customers into the arms of services such as Netflix.
Rogers Communications Inc. and Bell Media filed interventions with the Canadian Radio-television and Telecommunications Commission strongly voicing opposition to adding any new channels to basic cable, ahead of an April hearing that will consider whether a handful of new stations should be granted so-called “mandatory carriage.”
The period for public interventions ended yesterday with some 12,000 Canadian individuals and businesses speaking out on a series of proposals from existing and hopeful television channels for mandatory carriage. The commission must decide whether to add channels to basic cable, and consider requests for increased funding from channels that already have one of the coveted slots.
For television channels, placement on the basic tier means increased revenues because they receive a fee for every household that receives their signals. The cable, satellite and IPTV companies that broadcast their signals pass the cost – as well as a markup that is usually 100 per cent – to consumers.
But with traditional television providers concerned over cord cutting as Canadians turn to less expensive services, they are leery of adding new costs that they can’t control to customer bills. Any channel forced onto basic cable must provide a unique service for Canadians that doesn’t exist anywhere else, and both Rogers and Bell argue none applications meet that criteria.
“If subscribers are required to pay for services that do not have broad appeal or that do not serve an exceptional public interest function, the Canadian broadcasting system will become increasingly ghettoized,” its intervention reads. “It will be the platform for unwanted and unwatched programming services that a dwindling number of Canadians will continue to pay to receive in their homes.”
Bell echoed the comments, writing that if any changes are approved the “cost of the basic service will increase, potentially significantly.”
Other channels, such as Aboriginal Peoples Television Network, already have mandatory carriage but would like to see the amount they receive in subscription fees increased. Rogers says it has no problem allowing the channel to stay on basic cable, but would not support the network’s decision to ask for 40 cents per subscriber (from 25 cents).
“APTN’s frequent requests for the Commission to impose substantial increases to its wholesale rate are symptomatic of a programming service that has failed to properly manage its financial affairs and has been unable to make its service attractive enough to grow its revenue base through advertising,” the intervention states.
APTN chief executive officer Jean Larose said he expected the companies to oppose all of the proposals, but added that their opposition raises interesting questions about the way they force consumers to buy bundles of channels rather than pick and choose what they want to watch.
“We know they won’t support us because they see it as a hit to the bottom line that they must recover from subscribers,” he said in an interview earlier this month. “But it’s an interesting conundrum they face – it’s a can of worms for them. How can they say you shouldn’t have mandatory carriage and then not let anyone pick what they want to watch?”
Rogers also spoke out against the inclusion of Sun News Network on basic cable, saying the channel is only interested in mandatory carriage to “eliminate the competitive challenges it faces and ensure its profitability.”
While submissions closed Wednesday, not all interventions have been filed publicly yet. In another filing, IPTV-provider vMedia expressed similar concerns as Rogers – something that will likely be echoed in filings by other companies.
“In an age when one of the greatest concerns of the broadcasting framework is the rise of cord-cutting, of the growing alienation of most demographics from packaged, linear, by-appointment, and in many cases imposed content that is provided by conventional specialty television platforms, the obligation to take new services, and to pay for them, can only speed the growing movement toward the exit,” the company wrote.
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