The CRTC will release its latest decision in the TalkTV consultation later today as it announces much-anticipated plans to require cable and satellite companies to offer consumers the option of picking the television channels they want without requiring them to purchase expensive bundles. The decision, which builds on earlier rulings that focus on a more competitive marketplace, will fulfill the government’s promise to bring in consumer choice for television packages, which was a prominent part of its 2013 Speech from the Throne.
The specifics are yet to come, but the CRTC will likely require distributors to offer a basic service of Canadian and mandatory channels at a relatively low price (a 2014 working document suggested a cap of between $20 – $30/month), offer consumers a pick-and-pay option, and adjust the Canadian content requirement for bundles.
Consumers will emerge as the clear winners, benefiting from increased choice and the potential to lower their monthly bills. Yet the CRTC decision will undoubtedly be greeted by doomsayers who will argue that pick-and-pay will increase prices and decrease choice (because some channels will fold).
It seems likely that some channels with small audiences will shut down, but that merely means that consumers have been sustaining them through inflexible bundles for years. The notion that consumers are better off paying for channels which they don’t watch merely because distributors enjoyed market power to force them to do so is a strange notion of consumer welfare. If there is a public interest in maintaining a channel, there are better forms of support than forcing millions of Canadians to pay for something they don’t want.
As for consumer costs, there may well be sticker shock at the prices of some services sold on an individual basis. However, this Financial Post article notes that analysts expect monthly revenue per user to decline by $5 to $10 per month. In other words, the amount consumers spend on cable and satellite subscriptions will decline. Consumers may choose to spend that money on other programming – Netflix or other online video services – but their choices will now better reflect their interests, not those of the broadcast distributor. In fact, while some specialty services will be very pricey on a standalone basis, the increasing availability of streaming alternatives for sports, movies, and other programming suggests that there will be competitive pressures to keep prices in check, particularly given the threat of consumers leaving the system altogether in favour of unregulated alternatives.