OTTAWA-GATINEAU – Shaw Cable has received partial approval from the CRTC to air some kinds of commercials on its video on demand service.
The commission has approved Shaw’s application to show programs containing commercial messages when the program has already aired in Canada on a Canadian channel. It’s also allowed to charge a fee to subscribers to watch those programs containing commercials.
But the regulator denied Shaw’s request to show programs with commercials that had already aired in Canada but on a non-Canadian channel that’s on the list of eligible foreign satellite services.
The decision applies to Shaw’s wholly owned subsidiary, Videon CableSystems Inc., which operates the VOD service as Shaw On Demand.
In its application, Shaw said allowing programs with commercials “would allow Videon to obtain maximum flexibility to develop its on-demand service, thereby increasing the variety of programming that it could offer to its customers,” the CRTC’s decision said.
The commission has recently approved a number of similar requests for some VOD and pay per view services, saying that allowing this limited use of commercials “would not represent a significant departure from the Commission’s framework for the licensing of VOD undertakings.”
Both the Canadian Association of Broadcasters and the Canadian Film and Television Production Association intervened and opposed the Shaw application, arguing that it would indeed be a significant departure from the original VOD licensing framework. They argued that airing programs with commercials previously shown on conventional and specialty channels could have significant effects on Canadian broadcasters. They felt it could open the door to more non-Canadian programs, possibly result in American studios withholding VOD rights from Canadian programmers where the same show airs on a Canadian and non-Canadian service, and could provide another platform by which multinational advertisers could reach Canadian viewers instead of buying airtime on Canadian services.
The CAB and CFTPA also felt that charging subscriber fees to watch VOD shows with commercials “could lead to the creation of new de facto foreign specialty services that would be in direct competition with licensed Canadian services,” the CRTC decision read.
The commission said it disagreed that by charging a fee to watch VOD services with commercials that it would create new foreign services to compete with Canadian ones. However, it did agree with the intervenors about potential harm to Canadian broadcasters if the VOD service were allowed to carry shows with messages that previously aired on foreign services.
The commission’s decision on Shaw On Demand is here.
A similar proposal by Rogers Cable to allow some commercials on its VOD service is still before the commission, with mixed reactions from industry players.
