Skip to main content

A provision in the proposed USMCA would clear the path for U.S. home-shopping channel QVC to launch across the border. The company has been attempting to gain Canadian market access since 2015.Brendan McDermid/Reuters

Near the bottom of the proposed U.S.-Mexico-Canada trade agreement is a reference to what might seem a somewhat dusty and outdated corner of the TV landscape: home shopping channels.

The proposed USMCA’s annex 15-D states that “Canada shall ensure that U.S. programming services specializing in home shopping … are authorized for distribution in Canada" through deals with cable, satellite and internet protocol television providers.

If the agreement is ratified, the provision would seem to apply to a dispute over the proposed launch of a U.S. channel, QVC, on Canadian television. QVC, which mostly sells products through its TV shopping programs, as well as online and mobile applications, has been expanding internationally. The channel said in 2015 that it already receives “a significant volume” of orders from Canadian customers shipping to U.S. addresses and Canadian traffic to its website.

QVC has been trying to launch here since that year, when an application was filed with the Canadian Radio-television and Telecommunications Commission (CRTC) to add it to a list of non-Canadian channels authorized for distribution. Foreign stations on that list, such as CNN or the Golf Channel, can strike deals with TV companies to include them.

Such an application requires a Canadian “sponsor,” so QVC enlisted Toronto-based internet and television startup VMedia Inc., which hopes to carry the channel on its TV service. The CRTC denied QVC’s application, saying it would be the kind of “broadcasting undertaking” that is not eligible to be on the list. VMedia took the case to the Federal Court of Appeal, which referred the matter back to the CRTC. The regulator launched a new public consultation, which was completed in March, but has not yet issued a new decision. The CRTC declined to comment.

In the meantime, QVC engaged in lobbying last year on issues related to the North American free-trade agreement and trade policy, according to disclosures filed in the United States.

“QVC did advocate for it,” VMedia co-founder George Burger said. “I guess it got some traction and became part of the deal.”

QVC is part of the sprawling communications and media empire of John Malone, a U.S. billionaire and supporter of U.S. President Donald Trump. Among many other assets, Mr. Malone has stakes – and significant voting power – in Liberty Media (which owns the Atlanta Braves and the Formula One racing league, a majority stake in SiriusXM Satellite Radio and a 34-per-cent stake in Live Nation Entertainment Inc., among other investments); Liberty Global (which provides TV, internet and telephone services in Europe); Liberty Broadband Corp. (which owns more than 20 per cent of U.S. cable provider Charter Communications Inc.); and Qurate Retail Group (which owns shopping channels QVC and HSN, as well as online retailer Zulily and other assets).

QVC declined to answer questions on its plans in Canada.

Home shopping – defined as purchases in response to mail-order catalogues, TV shopping programs and direct mail – has been declining as e-commerce grows. Last year, the sector’s value in Canada dropped by 1 per cent to $372-million, according to research firm Euromonitor International. TV shopping services such as QVC and Canada’s TSC (Today’s Shopping Choice) have increasingly diversified into online shopping. QVC drew US$2.8-billion in revenue in the United States in the first half of this year and another US$1.3-billion internationally, according to Qurate’s second-quarter earnings report.

Rogers Media Inc., which owns TSC, opposed the 2015 application and the new one this year after the Court of Appeal decision. It argued that QVC would compete with TSC, offering the same type of programming and even selling some of the same brands, such as NutriBullet, L’Occitane en Provence, Isaac Mizrahi and others. Rogers Media declined to answer questions for this story.

What may be troubling for Rogers Media is the fact the USMCA also specifies that “modified versions" of U.S. home-shopping services should be allowed on TV in Canada, which would break with precedent. Non-Canadian channels authorized for distribution here generally are not permitted to modify their signals – for example, to sell advertising in this market and, therefore, compete for ad dollars.

“This is a meaningful distinction … and it would make the service more valuable in Canada,” Mr. Burger said.

The CRTC’s initial denial of the QVC application focused on the notion that it would operate a “broadcasting undertaking,” by which the regulator meant the service would have a “real and substantial connection” with Canada through an intention to do business here. It determined that the channel would need a broadcast licence or an exemption order. But broadcast licences are not issued to non-Canadian entities. The CRTC has exempted “teleshopping” services from having to hold a broadcast licence, but that exemption is also restricted to Canadian services.

Unlike cable channels that charge a per-subscriber fee to cable and satellite distributors, QVC pays the distributors for carriage in the United States. Its 2015 letter to the CRTC stated: “QVC understands that its sponsor and prospective other carriers of its channel in Canada welcome this additional potential source of revenue.”

The trade agreement delves into two specific disputes over Canadian broadcast regulation: The same section that mentioned home-shopping services also addressed the decision to air U.S. Super Bowl ads on TV here.

Report an error

Editorial code of conduct

Tickers mentioned in this story