Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Roger’s executives told the CRTC on Wednesday that in order to keep its cable subscribers over the next five years, it needs to offer content on mobile phones, tablets and computers in addition to televisions. (Ryan Remiorz/The Canadian Press)
Roger’s executives told the CRTC on Wednesday that in order to keep its cable subscribers over the next five years, it needs to offer content on mobile phones, tablets and computers in addition to televisions. (Ryan Remiorz/The Canadian Press)

Rogers adds to chorus against BCE-Astral deal Add to ...

Rogers Communications Inc.’s future as a cable provider is threatened by BCE Inc.’s planned takeover of Astral Media Inc. because the combined entity would make it difficult for Rogers to offer its customers access to programming on anything other than televisions, the company told Canada’s broadcast regulator Wednesday.

More Related to this Story

Rogers’ concerns mirrored those of several of BCE’s rivals at a Canadian Radio-television and Telecommunications Commission hearing into the deal, even though BCE’s CEO George Cope went to great lengths to dispel the notion when he testified earlier in the week.

The back-and-forth between the media giants helped to frame the issue for the broadcast regulator, which must decide whether to allow the takeover to proceed. Companies such as BCE that own both content and networks aren’t allowed to hoard their signals and shows to the detriment of their rivals, but those rivals say they do it anyway.

And if they can’t offer their cable and satellite subscribers popular services owned by a combined Bell and Astral, such as TSN and the Movie Network, they fear their customers will drop them and move to Bell.

“It seems Bell wants us to guarantee the old model based on subscribers and advertising revenue while they start new businesses online and in mobile,” said David Purdy, senior vice-president of content at Rogers. “The temptation to behave badly is just too great.”

Rogers said that in order to keep its cable subscribers over the next five years, it needs to offer content on mobile phones, tablets and computers in addition to TVs. But it’s concerned Bell will withhold key content by demanding unreasonable prices and subscription guarantees.

Earlier in the week, Bell said regulations prevent this from happening, and that it wouldn’t make any sense for the company to hoard content it spent billions to acquire for the sole purpose of redistributing to the country’s other cable and satellite firms.

“There’s no economic model in the world that makes that work,” Mr. Cope said. “We have to distribute this content now over one screen. To make $6-billion [worth of] acquisitions work, we have to distribute it over four screens to 30 million Canadians.”

The CRTC is holding a week-long hearing into the deal, which BCE outlined in detail Monday. The transaction would leave the company’s Bell Media division with control of more than 100 radio stations and almost 90 television channels. The commission could approve the deal, amend it or kill it outright.

Competitors are concerned that because Bell both owns content and a network, it could use its heft to negotiate higher prices from its competitors and make it difficult for them to take Bell content and offer them to their customers on other devices. Rogers used the example of mobile video, saying Bell asked Rogers to pay a number in the “double-digit millions” for access to CTV programming at a time when Rogers hadn’t yet secured a single customer for its service.

“That was for some specialty channel content and the main CTV network,” Mr. Purdy said, adding that the price has been lowered to $3-million recently in a verbal offer. “The upfront guarantee and fee was prohibitive to us a year ago.”

Mr. Cope said competitors simply don’t want to pay for mobile content and that his company “couldn’t be more excited to sell to Rogers and Telus. If access to that content isn’t worth $3-million then we don’t have a mobile business.”

Mr. Purdy said Bell, which also launched a mobile service that allows its customers to watch television on their phones, “used the oldest trick in the book” by starting with a high price and gradually whittling down its demand once its own business was established.

“By this point they have 18 months of exclusivity to exploit their access to content and suck up all of the customers who care about this and their competitors are left to pick up the crumbs on the table,” Mr. Purdy said.

Follow us on Twitter: @GlobeBusiness

 
  • BCE-T
  • RCI.B-T
Live Discussion of BCE on StockTwits
More Discussion on BCE-T
Live Discussion of RCI.B on StockTwits
More Discussion on RCI.B-T

Topics:

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories