THURSDAY WAS DARN BUSY (in fact, as we write this, it’s Friday morning). The CRTC launched its national conversation with Canadians on our TV system and each of Rogers Communications, Corus Entertainment and Shaw Communications released their latest quarterly results.
A common theme among the public appearances by CRTC chairman Jean-Pierre Blais in Laval and Toronto, as well as the conference calls led by Rogers CEO Nadir Mohamed, Corus CEO John Cassaday and Shaw CEO Brad Shaw was how providing more choice for consumers when it comes to their television packages is going to happen. However, the details must be worked out. Of course, the CRTC’s new proceeding, coupled with the federal government’s Speech from the Throne last week led to the statements on choice.
Blais told reporters Thursday before his speech the federal government in that Throne Speech is just reacting to many similar complaints the Commission logs on its own through the year. “I suspect they’re hearing some of the same frustrations we hear through our complaints lines,” he said. “This is a frustration, the lack of choice.”
Clearly, the company executives see the cliché, the writing on the proverbial wall, that Canadians won’t stop demanding the ability to be more selective when it comes to what video content they would like to pay for, and so they’re preparing their organizations for it.
Cassaday told analysts during his company’s fourth quarter conference call that in an a-la-carte/pick-and-pay world, he is “anticipating the possibility of some erosion… From a subscriber point of view, we think that there may be some damage to some of our smaller brands, but on our core brands, we should largely be protected,” he said.
However, “as it relates to advertising, the basic approach we’re taking is that if you consider a brand like YTV which currently has a subscriber base of 9 million, let’s assume that we lose, 10, 15, 20% of that subscriber base. The likelihood is that (those lost) are not watching that service now and as a result, we’re not going to lose any audience, which is what we sell to our advertisers.”
Cassaday also suggested another, positive, scenario where with fewer channels and more concentrated subscribers, the result will be less viewership fragmentation and overall viewing hours of strong channels would stay the same. “One of the consequences of (pick-and-pay) could be more time spent viewing fewer channels which could, in fact, result in incremental advertising on those fewer channels.”
We went a different way with Rogers’ Mohamed during his conference call with reporters, asking if Rogers, like some U.S. cablecos, is interested in offering up Netflix via the cable set top box. Of course, the legacy set top boxes couldn’t handle that, but the new IP-based ones sure could. Mohamed didn’t say directly that Rogers has talked to Netflix about this, but the outgoing CEO sure sounded interested in the idea.
“It starts with what the customer wants and the customer absolutely wants choice. We’ve been advocating this for some time, going back to the London trials. Everything about our company has been multi-platform, giving our customers what they want on the platform of their choice and by the way, that includes buying it in the form that they want,” he said.
“We have to get to a place where the customers get the choice that they want. We’ve committed to doing that and that means a whole range of options, whether it’s a combination of a la carte, pick-pays, tiers, packages and it should be a broad set of choices and it should be the customer that defines how best to move forward… Clearly there’s challenges that we’ll have to address to make that happen in the fullness of time but directionally, that’s absolutely where we need to go and as a company we are committed to that.
“Today, Netflix is delivered on the fastest and best network in terms of the Rogers high speed Internet network and if you take it forward over time, we’ve got to work through the set top box issues, but the direction is clear, to give the customers choice,” Mohamed explained.
But given, as Shaw noted during his analysts call, that long term affiliate deals with broadcasters are in place, some which prohibit pick and pay, some which make it very expensive to place channels in such a marketing package, far more direction from the government and/or the CRTC on what the road map to a-la-carte will be, is required.
But even with forks in the road, Cassaday believes the industry and his company will work it out. “We will find a way to cope with it effectively, as we have found a way with every other challenge that has faced us since our inception.”
