GATINEAU – Since video-on-demand is one of the key components in the cable company arsenal when battling the new, over-the-top video providers for viewers, the CRTC needs to scrap most of its regulations governing VOD, according to Shaw Communications.
In its final reply to the vertical integration hearing (as well as in its OTT fact-finding submission), Canada’s largest TV distributor suggest preserving Canadian content exhibition requirements for VOD, but not much else.
In its final submission on the vertical integration proceeding, the company identifies seven rules that need to go and first on its priority list is the double-dip of Canadian content contributions. Right now, VOD is licensed separately from the BDU and so VOD licenseholders must contribute 5% of revenues to the production of Canadian content. Shaw’s submission, rightly, it seems, notes: “BDUs that are affiliated with a VOD undertaking already make a 5% contribution on revenue earned from VOD sales. Requiring the VOD undertaking to also make a contribution, even using the CRTC formula based on 50% of the revenue received from an affiliated BDU, is double counting.”
Second, all limits on SVOD content should be removed. OTT services have no limits on exhibiting SVOD content and have an extensive library of television programming and series. Besides, SVOD rights for television programming are, for the most part, controlled by Canadian linear services.
Third, all limits on advertising on the VOD platform should be removed. VOD also needs to take full advantage of new forms of targeted advertising. Right now, only ads previously aired on a linear channel are allowed to be in the VOD or SVOD streams.
(Ed Note: Big broadcasters have objected strenuously to the second and third requests here. But since they’re all owned now by distributors…)
Fourth, the prohibition on exclusive rights should be eliminated. “Like OTT services, VOD undertakings should not be prevented from acquiring exclusive rights,” reads the submission.
Fifth, VOD should be exempt from all licensing. The CRTC has developed standard conditions of licence that apply to all VOD undertakings anyway and VOD competes directly with unlicensed OTT.
Sixth, the rule that says 25% of titles on carrier barker channels promoting VOD must be Canadian. There just aren’t enough Cancon titles that Canadians would recognize to make this work. Shaw says 5% would be tenable, and is “consistent with the supply of Canadian feature film theatrical release inventory.”
Seventh, the remittance of 100% of revenues of Canadian rights holders for feature films should be eliminated because it actually becomes a disincentive for VOD license holders to add additional Canadian titles.
Lastly, Shaw also wants to exempt VOD from the 3:1 rule coming into effect September 1st with the new BDU regulations. “VOD services are not linear services,” says the Shaw submission. “Therefore, there is no basis for requiring the carriage of additional non-affiliated linear services.”
We’re somewhat doubtful the Commission will address this in the vertical integration policy release but we expect it to be an important part of any OTT proceeding.
– Greg O’Brien
