Bell is currently going through “strategic review” on programming
By Ahmad Hathout
OTTAWA – Bell has revealed that WildBrain’s heavily redacted application last month accusing it of giving an undue preference to Corus on children’s programming distribution also accuses the large BDU of breaking the CRTC’s standstill rule.
Bell alleges in the reply dated September 8 that WildBrain is claiming the standstill rule – which stipulates that the BDU must continue to distribute channels on the same terms and conditions even while in a dispute – has been invoked because the parties began negotiating potential terms for a new carriage agreement. Bell argues this fact does not trigger the rule.
“In order for the standstill to be invoked, a party must write to the Commission stating that the parties are in dispute,” Bell said in the submission. “Negotiations do not automatically equate to a dispute,” suggesting nothing has changed because it is currently continuing to distribute the services at “pre-existing rates.”
Bell also acknowledged that the companies are now in dispute.
The bulk of Bell’s reply is on the undue preference claim, but the Bell decision that is central to the complaint is redacted. WildBrain states that it has comparable services to Corus – both of which are the two titans in this particular programming market – suggesting alarm at Bell wanting a new carry rate.
Bell said it is going through a “much larger strategic review” of its programming to keep up with a “quickly evolving marketplace.” That means it must change its negotiating position on channel distribution, it said.
Bell said the CRTC backed Videotron’s reasons for removing its VRAK and Z services on the basis that the popularity and viewership were in decline and that Videotron is engaged in a “larger commercial rationalization of the services it distributes.”
Bell last month shuttered VRAK due to Videotron’s decision.
As such, Bell said WildBrain’s distribution strategy of providing some of its programming to subscription video-on-demand services, specifically on Netflix, Amazon Prime Video, and free on YouTube have diluted the value of those services.
Bell said Rogers claimed that the audience for WildBrain’s Family and Family Jr. content has “diminished significantly” on linear because of its distribution strategy.
Late last year, the CRTC selected WildBrain’s cost proposal against Rogers during arbitration after the two could not come to a commercial agreement on a rate for distribution.
Bell also noted that Cogeco considered dropping the channels because of a claimed imbalance between how much it was paying to carry and performance.
“In addressing WildBrain’s undue preference complaint, we ask the Commission to consider carefully the market context in which the complaint is embedded,” Bell said. “The popularity of children’s programming in general and WildBrain’s programming in particular, is in dramatic decline.
“Moreover, given the decline in the programming category, the WildBrain Services have no reasonable chance of generating audience growth going forward,” it added.
Bell says Corus’s YTV and Treehouse are “segment leaders significantly more popular” than WildBrain services and Corus’ Disney services.
Bell alleges that WildBrain has “dramatically reduced its investment in programming for its services, which “reflects poorly on the quality of the WildBrain services as evidenced by the dramatic reductions in the services’ audiences.”
“As compared to Corus’ children’s services, the WildBrain Services invest significantly less in programming and its investment reductions are massively larger than Corus’ reductions,” Bell added.
Corus said in its own submission to the matter that its content is not receiving favourable treatment through Bell.
Corus “urges the Commission not to establish any unique carriage terms favouring the Applicant’s services,” Corus said earlier this month in a reply to the WildBrain Part 1 application. “Such terms risk fomenting, rather than rectifying, competitive imbalances in the industry.”
WildBrain alleged in the August application that Bell was disadvantaging its children’s programming to the benefit of Corus in the English-language markets. The problem with the application is that it is heavily redacted, which Corus noted as problematic when trying to address what the allegation.
Corus said that it deserved widespread distribution because – despite WildBrain saying it and Corus are the principal players in the children’s services market – it has a much a larger audience, which in turn contributes vast revenues for BDUs.
Corus also said WildBrain does not make greater contributions to Canadian content or the objectives of the Broadcasting Act than Corus does.
