CANADA’S PRIVATE BROADCASTERS think of themselves as long term, trusted partners with their American counterparts, important clients who have paid billions of dollars over the years to U.S. networks and studios for hit shows, which they, in turn, monetize here.
I don’t need to explain that part of the traditional TV business here as we all know it’s been a lengthy, lucrative partnership for everyone involved.
And it’s over now.
After talking to several sources this week, we learned that CBS executives did not give their long-term, trusted Canadian broadcaster customers/partners a heads-up about the Monday announcement that CBS All Access is coming to Canada in 2018. Not a whisper. Not a nudge. Not a wink. No tip-off whatsoever.
That’s correct. Cross-border buddies were not told of this blockbuster announcement in advance. That’s not the action of a partner – but of a competitor. A competitor for viewers – and for content. (Correction: Through official spokespeople, Corus Entertainment and Bell Media say they were informed by CBS about the impending launch of CBS All Access, prior to Monday's official release.)
This seems the first significant crack in the foundation of our TV system. The house isn’t falling down yet and everyone is saying all the right things to themselves and in public. None of the Canadian TV executives were willing to talk to us on the record about this announcement yet, but there has been a lot of calming talk this week in and about those companies noting how Canadian broadcasters are still trusted partners, about how existing long-term, multiplatform content deals will still apply for a while and how this isn’t much different than Netflix coming here.
Sure, CBS All Access will launch in Canada in 2018 probably with a bunch of its back catalogue and whatever newer stuff for which CBS holds the Canadian rights. By launch, we think it’s likely the company will have an original title or two in order to entice Canadian subscribers (it won’t be the new Star Trek series or The Good Fight. Both of those are All Access exclusives Stateside, but the company has already sold the Canadian rights for those shows to Bell Media and Corus Entertainment, respectively). The company has announced it’s ordered new All Access-exclusive series from Will Ferrell and Ridley Scott, for example.
However, we went back through the transcript of CBS CEO Les Moonves quarterly chat with Wall Street on Monday and it’s clear this is a long-term, global play for him – and that Canadian broadcasters will have a fight on their hands (possibly one they can’t win) for rights to CBS shows when existing content contracts expire.
“When you see a Netflix getting 50 million international subs, you say, ‘geez, that marketplace is so huge, we think there's a way to have our take’." – Les Moonves, CBS Corp.
During the call, Moonves was asked about the international licensing business (selling shows to international broadcasters), which brings CBS about US$1 billion a year, and is growing, and said the global trail blazed by Netflix shows that line item is small by comparison.
“When you see a Netflix getting 50 million international subs, you say, ‘geez, that marketplace is so huge, we think there's a way to have our take’,” he told the call.
Later, when asked about the content available to an international CBS All Access, Moonves said something that should send shivers down some spines here. He noted that the Star Trek franchise has been sold to Netflix (Bell in Canada), but going forward, those international licensing deals will change. “We will sell with the exclusion of a CBS owned streaming service,” he explained. “So once again, as time progresses, there will be more and more available content that we'll be able to put on CBS All Access internationally. Same with Showtime content, same with CW content… We think we're going to have a pretty nice suite of shows available and that will grow as each year goes by.”
What that says to us is when content deals come due, if CBS wants to sell only the linear TV window for certain titles to local broadcasters, they’ll do that – meaning the on demand rights will stay with CBS for All Access; and if the U.S. broadcaster wants all the rights exclusively for All Access, that’s the only place Canadians will be able to see those shows.
As Moonves said in the announcement – and on the call with analysts: “We are very aware of the international success that other streaming companies have had. We now see huge opportunity for CBS to go direct to consumer on a much bigger scale, worldwide.”
(Ed note: We hope our politicians are paying attention to this. This and other moves which are sure to follow will divert more money away from the system. It will cause less Canadian content to be made and more jobs to be lost. What’s the national strategy here? Will CBS All Access – and others that are sure to follow – at least have to collect HST? Netflix doesn’t. The new DAZN doesn’t. They should have to at least do that, shouldn't they?)
What do you think? Is this as big of a deal as we think? How should Canadian broadcasters react? Please let us know in the comments below, or confidentially, if you prefer at editorial@cartt.ca.
