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Tuesday April 23, 2013 |
Last month, Jean-Pierre Blais, the chair of the Canadian
Radio-television and Telecommunications Commission, delivered a
much-discussed speech at the Canadian Media Production Association's
annual conference. The CMPA is Canada's leading organization for the
production of Canadian film and television programming and Blais'
message was intended to both congratulate and challenge the industry.
On the congratulatory side, Blais noted the Canadian film and television
production had a record year in 2012, growing by over $500 million over
the prior year, by far the highest total and fastest growth in over a
decade. Canadian television production led the way, increasing 21.3 per
cent in 2011/12, for a ten-year high of just under $2.6 billion. Most of
the increase was due to English-language programming, with fiction
production growing by over 41 per cent.
Blais' challenge came in several forms, but my weekly technology law column (Toronto Star version, homepage version) notes the comment that attracted
the most attention was his remark that "under my watch, you will not see
a protectionist. I'm a promotionist." Most observers took the comment
to mean that the CRTC will not focus on mechanisms such as Canadian
content requirements and foreign restrictions as a means to advance
Canadian culture. Rather, with billions being spent on the creation of
Canadian programming, it is better to concentrate on marketing and
promotion of those works.
Yet there was a second comment that garnered less attention, but that
may ultimately prove more important. After encouraging the industry to
become more innovative and entrepreneurial, Blais warned "you will need
to compete, just like any other sector." Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareTuesday April 23, 2013 |
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Monday April 22, 2013 |
Appeared in the Toronto Star on April 20, 2013 as CRTC Should Force Broadcasters to Compete
Last month, Jean-Pierre Blais, the chair of the Canadian
Radio-television and Telecommunications Commission, delivered a
much-discussed speech at the Canadian Media Production Association's
annual conference. The CMPA is Canada's leading organization for the
production of Canadian film and television programming and Blais'
message was intended to both congratulate and challenge the industry.
On the congratulatory side, Blais noted the Canadian film and television
production had a record year in 2012, growing by over $500 million over
the prior year, by far the highest total and fastest growth in over a
decade. Canadian television production led the way, increasing 21.3 per
cent in 2011/12, for a ten-year high of just under $2.6 billion. Most of
the increase was due to English-language programming, with fiction
production growing by over 41 per cent.
Blais' challenge came in several forms, but the comment that attracted
the most attention was his remark that "under my watch, you will not see
a protectionist. I'm a promotionist." Most observers took the comment
to mean that the CRTC will not focus on mechanisms such as Canadian
content requirements and foreign restrictions as a means to advance
Canadian culture. Rather, with billions being spent on the creation of
Canadian programming, it is better to concentrate on marketing and
promotion of those works.
Yet there was a second comment that garnered less attention, but that
may ultimately prove more important. After encouraging the industry to
become more innovative and entrepreneurial, Blais warned "you will need
to compete, just like any other sector."
That may sound unremarkable, but to an industry that has often focused
on creating rather than competing, it represents a potential sea change.
For example, most of the funding for the record amount of Canadian
English-language television programming came from taxpayers and
broadcasters, not the original producers of the content. According to
Profile 2012, an annual report on the state of the industry, only ten
per cent came from private funding such as production companies and
private investors. Canadian distributors covered 18 per cent of the
total costs, with foreign distributors kicking in an additional nine per
cent.
That still represents less than half of the total financing costs for
Canadian English-language television programming. Federal and provincial
tax credits provided the largest chunk of funding, covering 29 per cent
of the cost, while broadcaster licence fees constituted another 25 per
cent. The Canada Media Fund, which is jointly funded by the taxpayers
and cable and satellite providers, covered the remaining ten per cent.
The notion of competing in the market should take centre stage this week
as the CRTC conducts its hearing on whether Canadians who subscribe to
cable and satellite television packages should be required to pay for
channels such as Sun News Network and Starlight, a proposed all-Canadian
movie channel. The regulatory process has been likened to winning the
lottery, since channels selected for mandatory carriage are guaranteed
millions in revenue regardless of whether Canadians watch or even want
the channel.
The best approach would be to scrap the mandatory carriage rules
altogether. Instead, the Commission could require cable and satellite
companies to offer all licensed channels to their customers. That would
enable consumers to decide what they want to pay for and assuage
broadcaster concerns that some distributors may withhold access to their
programming altogether.
That shift in approach would represent a significant change in Canadian
broadcast policy, effectively establishing a framework that requires the
industry to compete for subscribers. As CRTC Chair Blais would say,
just like any other sector.
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.
Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareMonday April 22, 2013 |
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Tuesday January 29, 2013 |
Canadians frustrated with ever-increasing cable and satellite bills
received bad news last week with the announcement that the Canadian
Radio-television and Telecommunications Commission will consider whether
to require cable and satellite companies to include nearly two-dozen
niche channels as part of their basic service packages. If approved,
the new broadcast distribution rules would significantly increase
monthly cable bills with consumers forced to pay for channels they may
not want.
My weekly technology law column (Toronto Star version, homepage version) notes that two issues sit at the heart of the broadcast distribution rules. First,
whether the CRTC should grant any broadcaster mandatory distribution
across all cable and satellite providers such that all subscribers are
required to pay for them as part of their basic packages. Second, in the
absence of mandatory distribution, whether broadcast distributors
should be required to at least offer the services so that consumers have
the option of subscribing.
Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareTuesday January 29, 2013 |
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Tuesday January 29, 2013 |
Appeared in the Toronto Star on January 27, 2013 as CRTC Should Put Consumers First and Drop 'Must Carry' Requirements
Canadians frustrated with ever-increasing cable and satellite bills
received bad news last week with the announcement that the Canadian
Radio-television and Telecommunications Commission will consider whether
to require cable and satellite companies to include nearly two-dozen
niche channels as part of their basic service packages. If approved,
the new broadcast distribution rules would significantly increase
monthly cable bills with consumers forced to pay for channels they may
not want.
Two issues sit at the heart of the broadcast distribution rules. First,
whether the CRTC should grant any broadcaster mandatory distribution
across all cable and satellite providers such that all subscribers are
required to pay for them as part of their basic packages. Second, in the
absence of mandatory distribution, whether broadcast distributors
should be required to at least offer the services so that consumers have
the option of subscribing.
Twenty-two channels are vying for mandatory distribution status as part
of the current review, which includes a comment period and a hearing
scheduled for late April. Some have likened the process to winning the
lottery, since mandatory distribution guarantees broadcasters millions
in revenues. For example, 25 cents per subscriber - the amount the
Aboriginal Peoples Television Network currently receives - generates $30
million in revenue in each year for the broadcaster (it wants the fee
to increase to 40 cents per subscriber).
These proposed cash grabs could add hundreds of dollars to cable and
satellite bills if approved. Sun TV News, which previously disavowed
mandatory distribution by likening it to a tax on all cable and
satellite subscribers, now wants the CRTC to require those subscribers
to pay it 18 cents per month until 2017. Starlight, a proposed new
Canadian film channel, hopes to generate hundreds of millions in
revenues from mandatory distribution, much of which would be used fund
the creation of new Canadian films.
While the financial benefits for broadcasters are enormous, the policy
represents a near-complete elimination of consumer choice for the
channels at issue. Rather than convincing millions of Canadian consumers
that their services are worth buying, the broadcasters need only
convince a handful of CRTC commissioners that their service meets
criteria such as making "an exceptional contribution to Canadian
expression." That is supposedly a high bar, yet it is surely far easier
than convincing millions of people to pay for your service each month.
Last year, CRTC chair Jean Pierre Blais emphasized that the Commission's
top priority was to "put Canadians at the centre of their
communications system." The mandatory distribution rules do the
opposite. Rather than focusing on consumer interests and choice, the
rules place broadcasters at the centre of the communications system by
offering up the prospect of millions in revenue without regard for what
consumers actually want.
There are few, if any, broadcasters that can be considered so essential
as to merit mandatory distribution. Niche cultural broadcasters have a
myriad of distribution possibilities and should be forced to compete
like any other content creator or distributor. In fact, even
broadcasters that position themselves as "public services" can often be
replicated by Internet-based alternatives.
While the anti-consumer mandatory distribution rules should be scrapped,
the Commission can enhance consumer choice by making "must offer" the
default for broadcast services.
Cable and satellite companies should theoretically welcome the chance to
offer more options to subscribers, but the vertical integration between
broadcasters and broadcast distributors may create anti-competitive
incentives. With Bell, Rogers, Shaw, and Videotron each controlling a
major broadcaster, it may make economic sense for those distributors to
prioritize their own channels while offering their customers less
choice.
The role for a CRTC that places Canadians at the centre of their
communications system is obvious - stop treating Canadians as ATMs for
the broadcasters by dropping mandatory distribution altogether, while
requiring broadcast distributors to offer all licensed channels to their
subscribers in a pick-and-pay format so that at long last consumers get
to decide what they want to watch and pay for.
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.
Slashdot, Digg, Del.icio.us, Newsfeeder, Reddit, StumbleUpon, TwitterTagsShareTuesday January 29, 2013 |
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