MONTREAL – Sensing the opposition to its proposed benefits package was pretty strong, the first thing Bell Canada did Monday morning when it faced the CRTC was to boost that package – making it bigger and, in the opinion of its executives, better.
As many companies which have faced the CRTC over the years are wont to do, Bell looked at the opposition to its benefits package filed with written comments to the CRTC prior to the hearing and boosted what it originally proposed by $41 million dollars, increasing the overall value of the package to $241.3 million, to be spent over seven years, rather than the 10 years Bell had originally asked for.
All media acquisitions are required to pay a tangible benefits package (6% for radio, 10% for TV), millions of dollars which generally goes towards the creation of Canadian content.
The difference between the old package and the new one is that Bell decided to include the minority stakes it owns in Teletoon, Historia, and Series+ and other minority stakes in its valuation of the Astral deal and therefore boost the benefits package accordingly. Most of that additional money will be spent on French television, with $20 million earmarked for a new French language all-news channel to compete with Quebecor-owned LCN and CBC’s RDI.
Bell executives noted that without approval of its benefits package, this new channel will not be launched as without the $20 million in start up capital from the benefits fund, there is no business case for launching the channel, which would be a category C digital specialty.
Bell Canada CEO George Cope also used his opening address Monday at Montreal’s Palais des Congrès to say the company, assuming the deal to buy Astral is approved, will soon launch a new multiplatform video product to allow the company to better compete with the likes of Google, Amazon, Apple and Netflix. It will be a “made-in-Canada service available in French and English, everywhere we have rights, to all Canadians through the cable, satellite or IPTV provider of their choice. Available on-demand and on any device, the service will showcase the very best in Canadian and international movies from Astral’s pay TV services, such as HBO Canada and The Movie Network, and great news, entertainment and sports content from Bell Media,” said Cope.
The service was fleshed out a little more in the question and answer portion of the hearing on Monday. Suffice to say it is not Netflix-like, in that it will not be available to just anyone on the web. It will be a TV everywhere service where consumers can only access the content if they are a BDU subscriber – and also subscribe to the TV channel from which they would to see content. Customers of Rogers Cable, for example, would be able to see TMN content on the go or on their laptops only if they already subscribe to the linear channel.
It’s the same model as HBO GO uses in the States, and it’s been a bit of an open secret in the industry that Astral had been in advanced negotiations with HBO owner Time Warner to launch that service in Canada with its BDU clients this fall. However, HBO GO in Canada is not yet being launched pending the outcome of this deal.
When we asked Bell Media president Kevin Crull if the service they talked about with the commissioners was in fact, going to be branded HBO GO at launch (Aller-HBO in Quebec?) he wouldn’t tip his hand. “The packaging and the presentation will be largely up to the BDUs, so many will build their own user interface to take to their customers,” he said after the hearing wrapped early Monday evening. “I would expect there would also be an entry through the branded broadcaster web sites. So I would suspect, speaking of CTV or Discovery or Space, that you would be able to access this content through CTV.ca, you would authenticate to your distributor and then see the content – or you would go through your distributor’s portal and authenticate.”
CRTC chair Jean-Pierre Blais admonished Bell for altering its benefits package right away, saying it runs contrary to the spirit of the CRTC process where intervenors are prepared to talk about the package Bell had submitted with its original application and not this new version. He asked the panel of executives whether doing this is “favourable to a stable process?”
Cope responded by saying they had no intention, or desire, to announce its new multiplatform service in a CRTC hearing “because Netflix is now listening and now knows what we’re doing, and all of our competitors in the broadcast industry now know what we plan to do… but given the public profile of two competitors using complete misinformation and using our branding illegally, not disclosing they are the companies behind that campaign in newspaper ads, we felt compelled to announce a product launch here so that the Commission and Canadians clearly understood the real benefits from this transaction.”
Astral executive vice-president Jacques Parisien, who will join Bell post-acquisition, noted that only Bell has the wherewithal to fully launch a TMN Everywhere or HBO GO – in English and French. “We would not have been able to do this without the depth of resources brought to us by Bell,” Parisien said in French.
It’s likely the folks from Quebecor, due to face the Commission Tuesday, will have a different outlook on the benefits of the transaction Bell posited today.
Greg O’Brien is in Montreal this week covering the CRTC hearing into the purchase of Astral Media by Bell Canada.
