A new decision from Canada's broadcast regulator clears the way for television providers to keep online content and features exclusive, handing them a powerful tool to boost loyalty as viewing habits grow more fragmented.
In a ruling Monday intended to favour "innovation," the Canadian Radio-television and Telecommunications Commission, CRTC, affirmed that Rogers Communications Inc. has the right to limit use of its GamePlus mobile application to Rogers' customers.
The federal broadcast regulator dismissed a challenge from BCE Inc., which had argued Rogers was violating the rules governing large media companies. And in doing so, the regulator drew a clearer line dividing the requirements for traditional television from "new media" viewed online. As audiences move online, the country's largest media players have been racing to boost interest in their own Web-based platforms, in part to entice TV viewers not to ditch their subscriptions.
Rogers owns the National Hockey League broadcast rights in Canada and it lets competitors such as BCE carry GameCentre Live, an application that allows hockey fans to stream all NHL games live for an annual fee. But only Rogers' subscribers can use GamePlus, an app that includes advanced statstics, exclusive interviews and control of special camera angles, including feeds that track star players and each team's goaltender.
BCE argued that Rogers should make GamePlus available to competitors as well. The CRTC disagreed.
Exploiting digital rights is key to Rogers's plans to recoup the $5.2-billion it spent in 2013 to acquire national NHL broadcast rights for 12 years, and Rogers Media president Keith Pelley praised the CRTC for "a smart decision."
"We won't stop giving fans new ways to watch hockey and we won't stop looking for other innovative ways to deliver programming," he said.
Large media companies are still testing how extensively they can tie new digital offerings to existing TV and Internet subscriptions that still drive their business. And BCE's media arm appears eager to turn Monday's ruling to its own advantage.
"We appreciate the clarity the decision provides and will look for opportunities to apply it across our properties," Bell Media spokesman Scott Henderson said. (BCE owns 15 per cent of The Globe and Mail).
Some experts suspect BCE may build exclusive online content from its NFL rights, while Rogers could leverage a partnership with Vice Media.
As such options grow more common, the CRTC's ruling may prove "a double-edged sword" for consumers, said Gord Hendren, president of Charlton Strategic Research Inc. It provides a real incentive to distributors to keep creating better online options – because "job number one would be to maintain loyalty" – but customers with competing services are left out of luck.
BCE launched its challenge in October, arguing that barring only some GameCentre Live customers from using GamePlus breached the CRTC's rules. The regulator requires companies that create and distribute media for television to offer it to their rival distributors as well, though content created specifically for mobile or Internet platforms is exempted, to encourage experimentation.
In technical terms, the issue was whether the GamePlus features were created mostly for use online or on TV. But it set off a debate about innovation and the power large companies have to favour their own customers.
Within days, Rogers CEO Guy Laurence shot back during a quarterly earnings call, calling BCE a "crybaby" and suggesting Rogers had edged out its rival for the NHL rights with a more innovative proposal.
But later last fall, Telus Corp. and Eastlink filed interventions siding with BCE. Telus said the app signalled a "foreclosure of competition," arguing consumers could have to subscribe to multiple networks to watch what they want.
Rogers said the app was created with raw video controlled by the viewer, not for an edited TV program. Ken Engelhart, vice-president of regulatory affairs for Rogers, said the company wouldn't be able to recover the costs of launching GamePlus unless it can use the service to attract and retain subscribers.
Ultimately, the CRTC decided GamePlus "provides access to bonus content" not seen on TV, opening the door to similar ventures.
"I encourage other companies holding broadcasting rights to be innovative online in order to provide Canadian and international audiences with content that they want to see," CRTC chairman Jean-Pierre Blais said in a statement.