Las Vegas electronics fest highlights Canadian regulatory lag, say some

Many in the Canadian new media industry are excited by the volley of new product announcements made earlier this month at the Consumer Electronics Show, held in Las Vegas. While a new generation of convergent devices – most of them taking advantage of fast-plummeting processor prices, dirt cheap Chinese manufacturing and increasingly easy-to-use wireless networking – present an opportunity for new media content and applications developers to sell their wares and products, not everyone is convinced that the market will materialize in Canada as it is shaping up in the United States. Lagging government regulatory models that restrict content distribution over telecommunications and broadcasting pipes are being seen as an increasing threat to Canadian communications companies, and some are now calling on Ottawa to take a more holistic view of policy-making as technology revolutionizes existing models. Not all is doom and gloom, however. The opportunities presented by the introduction of new devices (see sidebar for some representative examples) confirms what some content and applications developers have been predicting for a generation of technology that lets users personalize their entertainment and information consumption, and to take it with them wherever they go. Canadian company QuickPlay, which recently struck deals with Rogers Wireless Inc. and Telus Mobility to deliver video clips to mobile devices (CNM, Nov. 16/04), says the CES event validates their predictions for a new business model built on wireless content. "I think the thing that we definitely saw was in the past years there have been sort of trickles of what you alluded to, which is the move towards specifically the mobile device as a fully convergent lifestyle device," says QuickPlay VP of marketing Mark Farmer. "It truly is so much more than a mobile phone. We’ve seen gradual improvements in things over the years to include things like colour screens and polyphonic and MP3 capabilities for ringtones, and in the past six to eight months we’ve also seen the initial kind of multimedia capabilities – things like MMS being deployed in North America…I think what we’re seeing is from just a few people putting their toe in the water six to eight months ago, a real sort of significant inertia around those types of devices and the proliferation of those kinds of devices out there in the marketplace. I think it represents moving from an experimental phase in testing things out with early adopters of technology and really sort of the first big push into the mainstream of these services." Farmer adds, "None of it, in terms of the technology that was announced, came as a surprise. We’ve been using and deploying this technology in the real world and making it work with the networks that Rogers and Telus have for quite some time…We know how it works and we know how to produce a high quality experience through that technology. "The thing that definitely was new, though, was just how pervasive (it was). It’s like suddenly everyone’s woken up and the fully converging interactive entertainment device is this thing that we previously knew as the cell phone. That was definitely a clear statement from many large carriers that were there and the hardware vendors and all of the players in the whole mobile ecosystem saying, yes, multimedia is part of what this device is all about," he says. "I think it was actually very invigorating in the sense that it’s a validation of what we’ve been doing, and I think because of the experience that we had of actually doing this and making it work, it really positions us well for the future, and certainly a lot of the other folks that we were talking to at CES were very excited by it all. They’re also aware of the real world stuff that we’d already been doing and were very excited to be working with us." But, say others, the opportunity may be missed by Canadians in the current regulatory climate. Mike Kasprow, creative director at Trapeze Media Inc., says he’s pessimistic that Canadian consumers will benefit from the new generation of consumer-friendly technology. "Truthfully, I listen to Howard Stern every single morning. And, I’m lucky because it skips across the lake from Buffalo. But, when we go to satellite – and satellites can be a whole bunch of stuff – delivering video, radio PVRs (personal video recorders), radio, PRRs (personal radio recorders) – those sorts of things into your car are going to be huge, especially considering, the number one consumer electronic device purchased this Christmas was the iPod, but number two was the in-car DVD player – or at least it was in the top five – and the delivery of real high quality video to your car to entertain your kids on long trips, to entertain other people in the car – it’s huge. But the problem is that I can’t get too excited about that in Canada because I just don’t think the CRTC can possibly allow that to happen." Despite his bleak assessment of the benefits to Canadians or Canadian new media producers, however, Kasprow says there’s still a lot to be excited about in this month’s spate of announcements. "There’s a lot of hubbub around things like Google and Microsoft and the kinds of things that they’re doing, and the market caps that these people have, and clearly there’s some energy in this space and the fact that new devices are coming out that are going to make these things available to consumers in a number of different ways than they’ve ever had before is huge… I really do feel that the sector is back and it’s getting back in a big way…Within the Canadian context, I’m still rather pessimistic because I just don’t think the Canadian government, the provincial governments, and regulating bodies get it. I really don’t think that they understand it, and I really don’t think that they want to give it the time of day…I really think that we used to be leaders in this space. We had a real opportunity to become leaders in this space as a cluster, as a sector, in Canada, and we have just fallen behind." The president of the Canadian Cable Telecommunications Association, which has been arguing for months in favour of a regulatory model that recognizes the role of IP-everything will play in consumer’s lives, agrees that regulatory models could prove a hurdle to the development of convergent technology in Canada. "If the consumers are sitting there acquiring content in a variety of fashions, and moving content around, paying for content, consuming content differently, then all of that ultimately impacts many of the more linear channel mechanisms," says Michael Hennessy. "If your basic service providers, let’s say broadcasters or distributors, are to remain relevant in that world, are they operating under an environment that permits enough competition?…And, I think that the answer to that would probably be no. "The answer to that is probably no because we do restrict competition. We do restrict choice. We restrict the way things are packaged. We determine what is good. We determine who gets licences for particular genres. All of these things, I think, limit – if you look at the broadcasting world, certainly – the content world which is the end point, really, for a lot of these devices. All of these kinds of things may start to antiquate the system faster than we think," he adds. Hennessy argues in favour of allowing greater competition by distributors of content and unshackling them to take advantage of the IP-everything shift. "I think the best thing we could do in terms of what are we going to do about all of this stuff from a public policy sense, is to recognize that we have a communications policy that really comes out of a joint initiative of Industry Canada and Canadian Heritage, over 10 years ago, in the Information Highway policy. Perhaps it’s time for both ministers to collaborate – certainly when it comes to the convergence of content and communications on the consumer market – to collaborate on a renewal of that. Rather than starting at ‘we need regulatory reform,’ I think what we have to do is step back a little further and say, what is this world we’re evolving into? What are the opportunities and then what are the institutional tools that we need to meet economic, social, and cultural objectives?"

Las Vegas electronics fest highlights Canadian regulatory lag, say some

Broadcast | January 20, 2005

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