OTTAWA – The Canadian Association of Broadcasters (CAB) is opposing a bid by Shaw Communications to get regulatory approval to both offer and charge customers for content and advertising from non-Canadian sources on its Shaw on Demand VOD service.
The CAB says Shaw’s proposal could result in U.S. studios, especially those vertically integrated with a non-Canadian TV channel, withholding VOD rights from Canadian programmers even though the same program airs on both a Canadian and non-Canadian TV station.
The organization of private broadcasters also charges the non-Canadian TV channels would expect to receive something of value, such as increased subscriber fees, in return for granting VOD rights to their programming.
“Thus, approval of Shaw’s application would represent a new opportunity for non-Canadian services to benefit financially from their presence in the Canadian broadcasting system, without regard for any corresponding obligations,” states the CAB’s March 16 submission to the CRTC.
The CAB also states that “the value of VOD rights for prime time episodic programming would be greatly diminished if Shaw were able to negotiate directly with non-Canadian services to acquire the same programming for its VOD platform.”
The Shaw proposal could also have a negative impact on the advertising revenues of Canadian broadcasters because multi-national advertisers would have the option of reaching Canadian viewers through VOD product imbedded with commercials obtained by non-Canadian TV services, argues the CAB.
The negative impact would intensify as more Canadians gain access to and use VOD, and when other distributors seek the same rights if the Shaw proposal is approved.
The CAB also opposes subscriber fees for VOD programming containing commercial messages because it “would open the door to BDUs packaging such content on a subscription basis” and could create new defacto foreign specialty services that compete with licensed Canadian ones.
The CAB concludes that Shaw’s VOD proposal goes well beyond the current VOD licensing framework because it includes a provision to offer VOD programming including commercial messages that originates with non-Canadian TV channels eligible for carriage in Canada as well as Canadian TV services, and because it looks to charge a subscriber fee.
The CAB tells the CRTC that it is premature to consider Shaw’s application prior to a review of the overall VOD licensing framework. The commission is expected to review the regulatory framework for discretionary services, including VOD, later this year.
