IF THE CRTC DOESN’T step in and put a stop to a repackaging set to begin for Bell Satellite TV subscribers on September 1st, two independent broadcasters say this might be the end of the road for them.
OUTtv Network (an independent specialty aimed at the lesbian, gay, bisexual and transgender communities) filed a complaint with the CRTC last week saying the planned changes to its packaging on Bell TV violate section 9 of the BDU regulations, in that Bell is granting itself an undue preference for its own services by shifting OUTtv (along with some others) out of its current packaging.
In OUTtv’s case, the planned move from Bell’s legacy “Lifestyle 2” package to pick and pay, or its “Best” all-in package will cause the channel to lose approximately 148,000 subscribers (and $800,000 in annual revenue) immediately. That is 55% of OUTtv’s total subscribers to Bell TV and 16% of the company’s total annual revenue, says its application to the Commission.
Stornoway Communications is facing the same situation come September 1st where the company’s public policy-focused ichannel will be moved from Bell’s legacy news and learning tier to pick and pay, or Bell’s all-in “Best” package (which is $108.95/month). While its complaint to the CRTC has yet to be made public, Stornoway chairman Jim Macdonald told Cartt.ca in an interview that the move will cost his company $1 million in annual revenue and 67% of its Bell TV subscribers. According to its 2014 broadcasting year CRTC return, that revenue loss would be about 25% of ichannel’s total.
“If Bell is able to prevail in this situation, it basically means the end of Stornoway,” said Macdonald.
Both Macdonald and OUTtv COO Brad Danks say this smacks of a cash grab by Bell since they believe the affected customers will not be offered any rebate when these channels are removed from their lineups. “This takes $1.8 million from two independent services and puts it into Bell’s pocket,” said Macdonald.
“I think we’re big targets because we have higher wholesale rates and that makes us more economical to pull out because let’s remember, Bell is not passing savings onto consumers. This is an extraction from the system at the expense of the independents in favour of Bell,” said Danks in an interview.
The shuffles, according to the message sent to Bell TV customers in July, will also see Corus Entertainment’s OWN moved from the News and Learning package to Lifestyle 2, and Bell’s FashionTelevision channel moved to pick and pay. Also on that day, Bell will altogether drop French crime service Avis de Recherche, NHL Network (which the league is restarting anew, Stateside) and Gol TV Canada.
“This takes $1.8 million from two independent services and puts it into Bell’s pocket." – Jim Macdonald, Stornoway
Both Macdonald and Danks want the CRTC to issue a standstill edict that will prevent Bell from making the changes until the Commission hears their complaints.
The OUTtv application tells a story oft-heard from independent broadcasters: A struggle to be carried, then listened to by a large broadcasting distribution undertaking – and then the difficulties experienced when trying to negotiate new carriage agreements. In fact, OUTtv has not had a new carriage agreement since the last one expired in 2005, it reports in its application.
And now, according to Danks and Macdonald, Bell is changing the old rules on them before the new rules forthcoming from the CRTC’s Let’s Talk TV process come into force. Under the new policy, which of course has not yet been deployed, the Commission contemplated a transition period of about two years where broadcasters could get used to the new rules and prepare for a more direct-to-consumer, a-la-carte world. With this packaging change, Bell is shortening that transition period to weeks for these two brands – and it’s not enough time to adapt, they say.
“This is fighting the rearguard action, which is trying to deal with what you’ve already got,” said Danks of his company’s section 9 complaint. Satellite subscribers are dwindling quarter by quarter, he added, “but when you get yanked from your package and thrown to the wind, that’s not what I think you were anticipating, nor was it what the Commission was expecting the behaviour of the BDUs like Bell would be.”
Danks insists his company is preparing for the a-la-carte, consumer-driven TV world, but that it needs more time.
Bell, for its part, declined to make anyone available for an interview on this and says it will respond to the complaints in time for the September 11th deadline to respond. A spokesperson told Cartt.ca in an email “it’s not unusual for channel offerings to change over time. We’re compliant in these cases with all our carriage obligations and CRTC rules.”
Since Bell declined an interview, Danks and Macdonald were asked something we figured Bell might also say: If your channel is well-liked by subscribers, will they not seek you out and upgrade their package or purchase it a-la-carte?
Of course, it’s not quite that simple, say the two independent broadcasting execs, each of whom pointed out both services were licensed as Category A (digital must-carry) in order to serve what the Commission thought, more than 15 years ago, were necessary and underserved niches. “ichannel is not a populist channel. Never was and I doubt ever will be because we don’t run Highway Thru Hell and other programs which are good shows, but that’s not what we’re licensed for,” said Macdonald.
“We feel that to do this, even before the CRTC (Wholesale TV) code of conduct has been released, is predatory at best,” said Macdonald. “The Commission did say as part of the Let’s Talk TV process that there may be casualties, but I don’t think they expected that it would mean the entire independent sector of the Canadian broadcasting industry.”
Plus, said both men, it’s not like they can target their existing Bell TV satellite subscribers with incentives to stay on. “Let’s not forget, I don’t know any of my customers. I can’t reach out to them and say, ‘by the way, if you like us, you should subscribe to us directly.’ I don’t know their names. Bell won’t give me that,” says Danks.
“So, the question here is, ‘what’s the timing?’ It’s just before the (wholesale) code. Is that deliberate or not? I don’t know what Bell would say to that. It puts it on the Commission to ask ‘how serious are you about the new code? How does this relate to what you’re doing’?
“If Bell’s logic is that ‘I know you’re not in this package, but you’re in another one,’ is allowed to continue, the independent sector would be done in a year because right now all of the (carriers) are looking to repackage to conform to the requirements going forward.”
