TORONTO – Bell, Rogers and Videotron have some explaining to do over the way that they charge customers for live and on-demand television programming on mobile applications.
According to a Globe and Mail report, the CRTC has asked the three big providers a series of questions about their respective apps, such as how many subscribers the services have, how much data they tend to use, and how exactly the content is delivered.
The report raises the issue of net neutrality, noting that the apps allow viewers to use their smartphone or tablet to watch up to 10 hours per month of content from a selection of dozens of Canadian TV stations for just $5 per month, with no impact on their wireless data caps. On the other hand, if the customers use a service like Netflix or YouTube to stream 10 hours of many of the same shows, they run the risk of incurring significant charges for exceeding monthly data caps.
The carriers have already argued in the proceeding that use of Netflix and YouTube is growing exponentially despite mobile TV options, the report continues. This is evidence, they say, that the television apps are not harming competitor services.
Dvai Ghose, Managing Director/Head of Research for Canaccord Genuity said that a move by the CRTC to quash such mobile TV offers could “further challenge the rationale for vertical integration”.
“Consequently, we assume that if the CRTC kills such offers, it could become even more difficult to justify content ownership and vertical integration”, he wrote in a research note. “It could also make it even harder for Rogers, Bell and Videotron to differentiate their wireless offerings through TV content (although we would argue that this has not been successful anyway as evidenced by the fact that Telus is leading the sector in terms of postpaid wireless net additions, ARPU and churn). We also wonder how Rogers can differentiate with its NHL deal on a wireless platform under such a scenario. In our view, such a move could further support Telus’ strategy of not owning content, but instead leaving content decisions to the consumer and enabling access to third party content.”
Ghose added that eliminating these offers could also serve to reduce mobile TV viewership and/or increase wireless data ARPU, potentially negative for broadcasters like Bell’s CTV and Astral, Shaw Media, Rogers Media and Videotron’s TVA, as well as their parent companies.
