By Ken Murphy, John Panikkar and David Patterson
HIGH FIDELITY HDTV IS AN independent Canadian broadcaster. In the context of the current broadcast landscape, we carry the descriptor, some might say scarlet letter, “Category 2”.
High Fidelity HDTV has a unique perspective which combines our past experience building some of Canada’s most successful specialty services with our more recent experience as independent Canadian broadcast entrepreneurs and HDTV innovators.
We think the Dunbar Leblanc report is refreshing and brave. We understand why some may find it uncomfortable, but the report surfaces many questions which should be explored honestly and transparently in the coming months. Canadian audiences deserve no less.
We think that a supportive regulatory and business environment has achieved great success over the years by encouraging Canadian BDUs to invest billions to build and concentrate their digital media networks. Canadians consumers today benefit from some of the most sophisticated and powerful digital media infrastructure anywhere.
However, these large, now dominant, BDUs exert enormous – and growing – power over the media landscape by controlling access to, and profile on, their digital infrastructure. Most large BDUs also own a stable of television services, and control new programming innovations like VOD and SVOD: pseudo-channels which might enhance the consumer experience but will also further strengthen their powers and control.
Some of these dominant Canadian BDUs are also quick to add foreign services to prime channel real estate, often at the expense of a Canadian programmer’s access to, or profile on, the BDU’s system. For example, over the past two years one dominant BDU has added over 20 new foreign channels. In the same period, we have been denied access to their system because of “capacity constraints”. Left unchecked, the implications of this behavior are clear.
Clearly, a supportive regulatory environment also encouraged private Canadian broadcasters to invest billions to build (or lately buy) Canadian specialty services.
A big part of this success was, and remains, the joint venture model which encourages a Canadian led specialty programming service to join with an international media partner for the benefit of all. While it is clearly time to streamline the Byzantine channel by channel rules that lent support in the early years but are now anti-competitive and discriminatory, it is vital that we avoid ending up in a situation where Canadian broadcasters all play by the same (streamlined and fair) rules, but foreign broadcasters get a free ride or enjoy a competitive advantage.
The trend toward launching direct foreign feeds via the “eligible list” or VOD backdoor threatens to undermine this important joint venture formula which has worked so well and which has led to the creation of thousands of hours of Canadian programming for exhibition on channels which might otherwise have been dumped into the country with no contribution to the Canadian broadcasting system.
In summary, we think Canadian BDUs should be allowed greater freedom to serve Canadian media consumers through greater choice and innovation. We think Canadian specialty broadcasters should compete with one another on a level playing field that nurtures new entrants and encourages innovation and risk taking.
At the same time, let us also recognize the objectives of the Broadcasting Act will not be achieved by complete de-regulation or market forces alone.
The key questions for the upcoming regulatory review are:
1. How will Canadian BDUs be encouraged to promote and support Canadian television services, especially new independent entrants? How do we ensure BDUs do not self deal or abuse their dominant power to control access and channel profile? Canadian BDUs cannot be allowed to abandon their responsibilities to the Canadian broadcasting system while they enjoy their own kind of regulatory protection against foreign and domestic competition.
2. What contributions will non-Canadian television services make to the Canadian broadcasting system? (The provocative Dunbar / Leblanc question on OTA simultaneous substitution shines a light on one facet of this question.)
3. How should new incentives be introduced to encourage Canadian broadcasters to produce more and better Canadian programming?
We applaud the CRTC’s desire for a more market-driven, streamlined regulatory environment. On the face of it, such a market-driven approach implies Canadian audiences will be able to vote with their remote controls and their wallets for the channels they value. Who can argue against such a notion which respects the freedom and sophistication of Canadian consumers? However, let us also recognize that the choices Canadian media consumers make will be massively influenced by those who control the digital infrastructure for their own commercial account. The CRTC will have an important role to play to achieve the objectives of the Broadcasting Act especially in a streamlined, less regulated environment.
Ken Murphy, John Panikkar and David Patterson are the principal executives of High Fidelity HDTV, Toronto, www.hifihdtv.ca
