OKAY, WE’LL ADMIT IT. Sometimes it does get a little difficult in maintaining one’s attention on the fifth day into a CRTC hearing.
The questions, and quite often the answers, grow more similar as minutes turn into hours, turn into days. Those repeated questions and answers, though, do tend to allow followers of the hearing to divine just what the commissioners and the industry are aiming for. If you read between enough lines, maybe you can even predict, a little, what’s coming.
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WE’VE ALREADY EXPLAINED what the primary topics are during our extensive coverage of the CRTC’s vertical integration hearing, which wraps up on Tuesday. The top one has been the potential for a code of conduct, list of principles, or hard and fast rules for large, vertically integrated companies to abide by when negotiating for content and/or carriage. The emergence of some kind code in the decision, when it comes, is a slam-dunk to these eyes.
What that code, or list of principles will look like is, of course, undecided. Will it speak to most-favoured-nation (MFN) clauses, a demand programmers tend to dislike, but which has gotten a lot of discussion over these five days? Will it be a hard list of rules or a general list of best practices? Will such a code contemplate a “standstill” provision, where VI companies can’t launch new specialty services of their own until they have been offered for launch at the same time to other distributors?
The potential contents of such a code have been examined, flipped over, turned inside out and aired fully. We’ll see what the industry files in its final comments and how the Commission writes such a thing.
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LESS CLEAR ARE WHAT rules may emerge concerning exclusive content (main topic #2) when it comes to ancillary rights for mobile and online. I’m not sure the commissioners are swayed by the arguments against such exclusives. There may be something added to the new code to make sure linear TV content aired on a traditional, regulated channel can not be made exclusive to one distributor’s broadband or smartphone offerings. However, will the CRTC really get into deciding, for example, a special NFL stats and highlights package made available only to Bell Mobility customers on their smartphones must also be made available to Wind, Rogers, Telus, SaskTel, MTS, Mobilicity, Videotron and Public Mobile?
At this point, we doubt that. (And sorry about yet ANOTHER sports programming reference, but the hearing has been rife with them. I guess we could have said an after-hours and behind the scenes mobile package from the MuchMusic Video Awards for Bell subscribers or exclusive Food Network recipes for Shaw broadband customers.)
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TOPIC #3 IS SOMETHING we’ve also delved into already and came up again Monday: Skinny basic. Commissioners, chairman Konrad von Finckenstein especially, really want one of the big companies, any one of them, to embrace the idea. So far, there have been no takers. Corus Entertainment was the latest yesterday to throw cold water on the forcing TV distributors to offer a tiny basic package of the local Canadian conventional stations plus the 9(1)(h) channels as a low-cost consumer-friendly entry point into the regulated TV system.
“Skinny basic would be very detrimental to the business,” said company president and CEO John Cassaday. He pointed to commercial-free kids service TreehouseTV, which is carried on basic by many Canadian distributors – and is a channel which has aired countless hours of Canadian content.
A skinny basic which doesn’t include Treehouse would be damaging to the channel and the producers whose content airs on the specialty channel. “It would cause a significant diminution of our ability to contribute to the production of Canadian television,” added Cassaday.
But then von Finckenstein (who we’re fairly certain has no 2-7 year olds living in his home), in one swift comment, got to the meat of the skinny basic issue for consumers (actually, the comment is at the crux of the entire TV packaging/tiering concept where subscribers pay for a list of channels to get the one or two they want) when he asked Cassaday: “Why should childless couples or people without children in their house have to pay for what do you call it, Treetop?”
Ouch.
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LATER IN CORUS’ presentation, when Cassaday explained how the company bought the digital and ancillary rights for many programs from Nickelodeon just to make sure the Viacom brand didn’t exploit them on their own in Canada, commissioner Stephen Simpson asked how the company views the future viability of linear TV.
“Linear TV is the end aisle in the supermarket, the window in a department store,” said the CEO. Sounds great, because it is that type of thing that draws people in to shop and consume. But having worked in retail before those store aisle end caps are often also called “loss-leaders” where a cheap bottle of Tide is sold at or below cost, for no profit, just to get people into the stores to buy other, um, ancillary, items…
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Another source of concern for the independent broadcasters (and one that may well be written into this new code or just be a part of the vertical integration policy) are the linkage requirements to at least maintain the guidelines where for every three Category B services carried by a VI distributor (Shaw, Rogers, Bell and Quebecor) at least one has to be an independent.
While many others are asking it to be a 1:1 ratio, independent broadcaster Stingray Digital (Galaxie, Karaoke Channel, et al) backed off on that in its appearance yesterday. “While Stingray suggested in its original submission that it wanted to see a 1:1 linkage rule, after listening to the comments by various interveners we have decided to change our ask to a 3:1 linkage rule amongst category B channels whereby one of the three would be independent and two would be unaffiliated. We feel this is more reasonable solution that responds to the concerns of the vertically integrated companies in terms of content acquisition while protecting the independent broadcasters,” said the company’s vice-president of content and regulatory affairs, Rob Braide.
Third-language independent broadcaster ATN asked for something a bit different on linkage when it comes to Canadian-made channels like theirs: “As Section 27 of the draft BDU regulations stands (2008-100, coming into effect August 31, 2011), the 3 to 1 ratio of foreign third-Ianguage services to Canadian third language services is required for services offered, but not services received… This change means BDUs could offer packages of foreign third-Ianguage services, with no Canadian services in the package, so long as they offer enough Canadian third-Ianguage services in other packages to maintain the 3:1 ratio,” says Shan Chandrasekar, president and CEO.
“It is surely contrary to the objectives of the Broadcasting Act regarding the provision of Canadian programming to multicultural Canadians. Packages of foreign services should not displace Canadian programming.”
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The hearing wraps up tomorrow with the company executives who feel they have the most to lose, those of the independent broadcasters such as ZoomerMedia, Pelmorex, Stornoway, the Independent Broadcasters Group, Out TV, Glassbox Television, Fight Network and consumer advocacy group PIAC.
Surf to cpac.ca too see it live.
