GATINEAU – When Bell Canada and Telus each spoke to the issue of exclusive content on Tuesday morning during their turns at the CRTC’s hearing into vertical integration of media and distribution companies, we thought to ourselves: “this, we’ve heard before.”
Telus, the biggest carrier in the country without media assets, is worried the likes of Rogers, Bell, Shaw and Quebecor will make acquiring ancillary content for wireless, online, and any other devices that pop up, too difficult or expensive – or give themselves unfair head starts, much to the disadvantage of Telus and other companies like it.
Allowing the Canadian media and distribution titans the freedom to keep content away from competitors who have no content leverage of their own, like Telus (but also including Cogeco, EastLink, MTS Allstream, SaskTel, Canadian Cable Systems Alliance members and others who will present later this week) is unfair to Canadians who might then have to purchase multiple subscriptions from various companies just to see the content they love on their mobiles, PCs or tablets and is unfair to those distributors whose businesses will suffer because of it, says the Burnaby, B.C.-based company.
According to Telus’ senior advisor on media and entertainment, former CBC English Services EVP Richard Stursberg, research Telus has done shows that Canadians are willing to drop one distributor for another in pursuit of desired shows.
“The numbers are a little bit alarming,” he said. “It’s an enormously powerful incentive to switch providers.” According to a survey done for Telus by Harris Decima, 54% of those surveyed would switch providers to follow where their favourite programs might be, should content exclusives be allowed to happen.
“For people who are strong fans of particular content, they will switch providers,” added David Fuller, Telus’ SVP and chief marketing officer.
Bell is on the other side of the exclusivity spectrum. It, like Quebecor, wants a freer hand when it comes to being able to take some of the content it owns and making pieces of it available on new platforms, only to Bell subscribers (no one is figuring Bell wants to make CTV or TSN or Comedy available only to Bell TV subs). Plus, say its executives, it is offering nearly all of what it has to competitors and all of their platforms anyway.
“It would be our preference to see linear TV, OTA and specialty broadly available to the market,” said Bell Media president Kevin Crull. “And today I’ve made all of my mobile content available on commercial terms to other wireless providers.”
Besides, consumers are used to the competitive market and the fact that they can only get certain content with certain devices. “The issue of choice is not something that should be shied away from,” said Wade Oosterman, president of Bell Mobility, Bell Residential Services and chief brand officer. He pointed out that consumers who want BlackBerry Messenger know they can’t buy an iPhone, just like iTunes fans likely won’t carry a BlackBerry.
It’s “a preposterous thought” that Canadians should have the regulated right to access all content from anyone at all times from any handset on any company’s network, added Oosterman.
However, so far in this hearing, the phrase, “commercial terms” or variations of it, has been at the crux of much of the debate here in Gatineau.
CRTC chair Konrad von Finckenstein has asked each presenting company, sometimes repeatedly, how they feel about some sort of code of good conduct when it comes to the rights to ancillary content – or the content owned by vertically integrated companies that would not normally air on a TV channel (think backstage clips of awards shows, sports or comedy highlights and so on, available to smartphones, on a tablet app or just online).
Rogers proposed some principles on Monday, calling it a “Rights Holder Code of Good Practices” that would apply to all distributors and would constitute “minimally intrusive safeguards,” without which, “competition in ancillary markets will be impaired and consumers will be frustrated,” said Ken Engelhart, SVP regulatory at Rogers.
Telus, along with MTS Allstream, SaskTel and Cogeco put far more meat on the bones of such a code, submitting a joint proposal that would guarantee all content be made available to all competitors – and that no carrier could give itself a head start. So, if Bell has a new mobile deal with the NHL, for example, it couldn’t offer that content to Bell Mobility subscribers unless competitors were given a two-month head start that the new service was coming.
The proponents also want to see ex ante, or before-the-fact rules set out regarding content exclusives.
Bell, at the beginning of its presentation, wanted no part of any ex ante code, noting the market for ancillary content on new platforms is still in its infancy.
“We don’t know what business models will emerge,” said Crull. “You have the power to see a code emerge over time,” he told von Finckenstein.
Noted the chair: “We have to put some predictability and some order in the system.”
Writing an ex ante code, though, assumes we can predict which way the market is going to go, which apps and content will drive growth and innovation – predictions that aren’t really possible. “I can’t predict if holographic exclusives will be the next one,” added Crull.
However, by the end of its appearance, Bell executives agreed to try to come up with some content-dealing principles in its final written reply, which is due July 8. Von Finckenstein also advised Telus to take another look at the rather muscular code it submitted for ways it can be pared back a bit.
Leading off on Wednesday morning will be Shaw Communications, followed by MTS Allstream and Astral Media.
