Disruptive Internet Streaming May Lead to New Canadian Broadcast Bargain

The month of March may be associated with spring, the return of baseball, or a weeklong school holiday in some households. For me it is all about “March Madness”, the annual U.S. college basketball tournament that wrapped up last night following nearly a month of shocking finishes and Cinderella stories.  

The tournament provides hours of overlapping games with television networks zipping between the closest ones. This year’s tournament has been as exciting as ever, yet the coverage has changed. In Canada, TSN purchased the rights to broadcast the tournament and owing to an already packed schedule, proceeded to shift the games between channels.

Initially out of frustration and later out of convenience, I shifted my tournament viewing to the Internet. The National Collegiate Athletic Association, which runs the tournament, offered a live streaming Internet feed of all the games as well as an iPhone app that provided good quality video. All the games – including the U.S. commercials – were readily available to Canadians without the need for a cable television subscription or a Canadian broadcaster.

My weekly technology law column (Toronto Star version, homepage version) notes that while the use of the Internet to by-pass Canadian broadcasters is still relatively rare – most U.S. programs bundle the broadcast and Internet rights together – the decision to stream the games directly into the Canadian market could soon become the norm.  

The key determinant will obviously be money. Once U.S. rights holders conclude that it is more profitable to retain the Internet rights so that they can stream their programs online to a global audience and capture the advertising or subscription revenues that come with it, Canadian broadcasters may find that they can only license broadcast rights with the U.S. rights holders competing directly with them via the Internet.

The emergence of streaming television over the Internet has generally been viewed through the prism of Internet providers (do data caps unfairly limit the viability of Internet-based streaming?) or broadcast distributors (will streaming services allow consumers to drop their cable subscriptions?). The forgotten story involves the impact on Canadian broadcasters and the future of Canadian content regulation.

The Canadian broadcasting bargain has long recognized that it is more profitable to license the rights to popular U.S. programs – aided by simultaneous substitution of commercials for Canadian viewers – than to create and promote original Canadian programming.  Indeed, even the best Canadian programs face an uphill battle since commercial success requires licensing the program for broadcast in dozens of other countries around the world.

Canadian broadcasting has therefore involved a trade-off that allows private broadcasters to benefit from cheap, profitable U.S. programming in return for meeting their Canadian content obligations. The Internet is on the verge of disrupting this model by rendering the U.S. programs far less profitable for Canadian broadcasters, since acquiring broadcast-only rights means missing out on the fastest growing piece of advertising pie.

While this sounds like bad news for the creation of Canadian content, it might actually be its savior. Creator groups will likely focus on pressuring the foreign based video streamers to contribute to the creation of Canadian content, but Canadian broadcasters may become the bigger champions as they gradually recognize that owning the full suite of broadcast and Internet rights are essential to commercial success.

If those rights cannot be obtained through conventional licensing models from U.S. rights holders, the broadcasters may begin to create their own Canadian content in earnest. The approach may not be a slam dunk, but producing Canadian content for commercial reasons – rather than due to licensing requirements – may lead to a new made-in-Canada Cinderella story.


  1. Personally, I hope more and more producers start doing global Internet broadcasts and skip the local media. I know I’ve found it annoying and frustrating to miss some of my favorite shows (or want to check the webisode extras), and look for them online only to meet the stupid Geographical limits and/or to find CTV/Global/etc… didn’t buy the net rights for that.

    If we can watch the US channel directly, then we should be able to watch the US Channel’s website directly without the geographic restrictions.

  2. I would honestly say that this is Bell and Roger’s biggest fear with the Internet.

    Though I think that the Internet is going to change the way people watch things anyway. I think that the standard form of broadcast TV is going to end up being replaced by on demand watching online via things like Netflix. This is not going to be a comfortable time for broadcasting as the model changes.

  3. GEOLOCKINGHAS TO GO! I’m sorry but what use is it to block a big potential market just because it’s in the states or Canada? Trailer, promos etc have increasingly been put behind geolocks and it’s frustrating. There is no need for this, the internet is the future, live with it, don’t fight it.

  4. Anarchist Philanthropist says:

    The internet is a necessary tool right now in everyone’s every-day life. There should be no bargaining, or wheeling and dealing over who has the rights to what. Once it’s on the internet it should be considered public domain and left at that. Streaming should be considered common, and bandwidth a necessity of life. I’m really tired of all this BS.

    This is why we need a governing body for the internet. Not to make laws for it but to protect it from greedy wart hog gov’t officials making laws on behalf of giant corporations!

  5. UBB is illegal says:

    New Canadian Broadcast Bargain? Really?
    New bargains are wishes from the Canadian point of view. The CRTC has effectively kill Canadian contents with UBB and its decisions/lack of enforcement of things like net neutrality and throttling. YES, CRTC has sealed our fate. Why?

    1) Telecom access is 90%+ CONTROLLED by big telecoms. The use of unconventional(few countries use this AT ALL) billing practice of UBB is just a way for them to squeeze ANY type of competition, online or not(given that they own the networks). There is no escape. UBB in and of itself kills ALL streaming/content distribution. Even if I use torrent technology to stream live videos, I am subject to throttling by some ISPs. You can call this the “Great Wall of Canada”. It’s no wonder why most Internet innovations like facebook/twitter happens SOUTH OF THE BORDER. The pervasiveness of UBB and its variant is killing Canadian content/innovation from emerging (on the Internet or elsewhere) in any form. (“You think the telecoms, with their monopoly power, is just going to sit idly by while their profits drops with your streaming?”)

    2) With the Internet, we are competing globally. With the government’s lackluster view of the digital economy, we are seriously behind MANY countries in terms of content distribution and content quality.

    The Japanese tsunami incident provides a perfect way to view this. Right after the tsunami, almost all news network in the world broadcast their content on the Internet. Google even offer an immediate platform for survivors. What does Canadian networks do? Yes, there are reports on TV, but there is minimal presence on the Internet. Even RT(russian news network) and aljazzera is on it on the internet reports. I can stream LIVE HD content from MANY sources. Canadians sites? text and non-HD clips are common. How can we compete on that basis? We can’t and the only thing that we do is have our protectionist policies in screening out competition on our own markets while other countries get stronger. This is ALL because of how UBB and its variants limits Canadian adaptation to Internet content.

    3) There is no end in sight of ANY major policy shift on internet matters. Sure, there are voices like openmedia on how “unfair” the internet is priced, but these are minor efforts. Even the parties campaigns are based on attack and tax-cut rather than meaningful solutions to real problems.

    We will get even MORE behind when countries with cheap cell phone internet access find new ways of using that technology. We would then have to adapt THAT technology instead of inventing our own and creating jobs.

    –> We need serious shift in policies and restructuring of the CRTC to protect the consumer rather than clinging onto protectionist measures that will kill our innovation spirit which is the key drivers for jobs and quality of life. Otherwise, new canadian broadcast bargains are really a myth imo.

  6. Richard Pitt says:

    Turn about is fair play
    So Canadian companies start creating top-rank entertainment and stream it world wide too. Sound like a plan to me.

  7. The Internet is a play field leveler in the broadcast industry. With the ability to inexpensively stream to the world it is now a case of quality of programming that will determine eyes on the screen, not more forced ‘filler’ programming. Competition breeds excellence in many parts of life and it will here too, if it’s allowed.

  8. Anarchist Philanthropist says:

    Better idea. Canadian people get together and pool enough resources to start a real public ISP and then we get all the people of the country to join us by giving fair accounts at fair prices and when we have all the clients, we shut down or buy out whats left of these companies.

    Sounds fair to me.

  9. Trevor Heisler says:

    Great post Michael. I would like to comment on two questions you included above: (1) Do data caps unfairly limit the viability of Internet-based streaming?; and (2) Will streaming services allow consumers to drop their cable subscriptions? The answer to question 1 is YES, but fortunately the answer to question 2 is also YES. So if we end up paying more for internet, while we may not be entirely thrilled, we can save money in the end by ditching cable TV. In the end, UBB (or any other excessive pricing scheme) will result in many consumers having to allocate their total TELECOM (phone, internet and cable) spend differently. Informed consumers will see that there is no need to keep cable television as there are far superior choices available online. So in the end, UBB might very well result in less total telecom spend for consumers and less revenue for BIG TELECOM.

  10. What we missed
    Remember the noise here about Pandora and how we missed “increased competition”?

    Here’s what we are really missing:


  11. I’m not so sure that it will matter what happens in Canada so long as it becomes increasingly easier to access US licensed content through affordable pay services.

    Already I am going to the US for streaming video and other services, for only a few dollars a month here.

    Until content creators get their heads screwed on straight and realize that you can’t license content any longer by country, and that content needs to be licensed more globally (cultural grouping, perhaps), it

  12. Devil's Advocate says:

    Another Pandora’s Box…
    Sure, more content will become more widely available, but in the excitement of watching this happen, people seem to overlook something else – an eventual explosion of commercial content!

    You’re already seeing some of the effects on things like YouTube, etc., but I’m sure very few are projecting what they really already know – once advertising becomes an accepted part of the process, it immediately takes over as if it were the raison d’etre for the medium.

  13. Fnord Prefect says:

    Ah…this is the reason for UBB!
    This is the *real* reason why Bell, Rogers and other companies want UBB…to preserve their business models of selling video content through their cable and Sat TV divisions. If they make it too expensive to stream video on the net, and when it takes a Gig of data to stream one hour at 720p, it adds up fast under UBB and becomes a disincentive to dropping Cable TV or Sat TV.

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