WHISTLER, B.C. – While Rogers, Shaw and Telus say they are supportive of an a-la-carte channel environment, executives from each company offered up some cautionary advice during CIBC’s annual Whistler Institutional Investors conference last week.
Speaking at the event January 23, Steve Wilson, Shaw’s executive vice-president of corporate development and CFO, acknowledged the industry realizes that consumers want more choice, and from his company’s point of view, it’s about giving them the ability to access content in a variety of ways. There also needs to be consideration given to the impact that has on the Canadian broadcasting system and the businesses which provide the content, he added.
“The one thing that we have to be cognizant of is that we have to decide where we want the Canadian broadcasting system to end up in a world without borders,” he argued. “Shaw Media has $1.1 billion in revenue and we spend $300 million a year supporting Canadian production. So when we talk about true a-la-carte, we also need to be sensitive to where we want the Canadian broadcasting system to end up because if that falls there is going to be a significant change in how production and broadcasting is done in this country.”
Earlier in the day, Edward Rogers, deputy chair of the board of directors and executive vice-president of emerging business and corporate development for RCI also spoke about a new channel environment that would require greater packaging flexibility from the broadcast distribution undertakings (BDUs).
Adapting to a new model is required if the company is going to stem the losses on the TV side of its business, said Rogers. “Our current mousetrap isn’t winning all of them, and we’ve got to continue to innovate and build and make sure that the 24-year-old is as excited to buy content from us as maybe a 44-year-old or the 64-year-old.”
During his session, he also acknowledged that the old linear television model may not be best suited for a new generation of viewers who are interested in viewing programs rather than channels.
“You’ve got to move well beyond that [traditional] model if you’re going to compete for the customer who just wants to buy a season of Lost or buy a particular show. So I think it’s very much in the industry’s interest to figure out how we build into that model,” he said. “But at the same time I think Canada has been very proud of the production that we’ve done in this country, what we’ve created in this country and we don’t want to lose that.”
“We’ve got a lot of work that we need to do, but I do think we’ve got the ability to do anything that new, emerging competitors [can do]." – Edward Rogers
Rogers said his company is well positioned to compete for new customers whether in the traditional environment or against new competitors selling content to consumers in different ways. “We’ve got a lot of work that we need to do, but I do think we’ve got the ability to do anything that new, emerging competitors [can do],” he said, referring to a Netflix type service (something which Cartt.ca has reported on, but which Mr. Rogers did not address in Whistler) or selling direct to consumers as iTunes does. “We have a great hand of cards to be able to compete well while still driving live television … to your television or any other device that’s out there.”
However, he cautioned against any quick action. “You don’t want to move with haste and you don’t want to do something that hurts more than it helps. But I do think we’ve got to figure out this model for customers in the medium and long term,” said Rogers.
Telus Corp. executive VP and CFO John Gossling agreed customers definitely want more choice in choosing certain themes and packages and would like to even carve out some of the most popular channels. To illustrate this fact, he noted that less than 60% of the firm’s customers choose a sports tier (sport channels are not part of Optik TV’s basic package, like they are with most other carriers).
“The other thing about going completely a la carte, completely pick and pay, is it actually is very confusing and hard to manage for the customers (due to the sheer number of channels) so you’ve got to find a balance,” he said.
The push for an a la carte channel environment was thrust to the spotlight by the federal government’s Speech from the Throne last fall where the potential for a pick and pay model being foisted upon the industry was directly mentioned. Under the guise of that directive from the feds, the CRTC kick-started its Let’s Talk TV: A conversation with Canadians initiative in October (something CRTC chairman Jean-Pierre Blais had said back in June was on its way). The first phase of that process is now complete with the Commission releasing a report of its findings today, based on 1,300 interventions from Canadians. The next phase of Let’s Talk TV is scheduled to begin next month, with a public hearing in the fall.
