Von Finckenstein to ExpressVu: you’d have no subscribers without the OTA’s

CRTC chair Konrad von Finckenstein revealed his thoughts on the value of the conventional broadcasters to BDUs Wednesday when he told the Bell Video Group its television distribution business was dependent on offering the private OTAs. "Let's take CTV and Global: if you didn't offer those services I don't think anyone would subscribe to your service," said von Finckenstein. "My point is they are essential to the system." The Bell Video Group, which is a BDU through ExpressVu and Bell Aliant's digital television service, did not debate that conventional broadcasters have been the cornerstone of the system thus far. But they argue that carriage fees should not be the answer to broadcasters' economic woes. Referring specifically to CBC, Bell's regulatory affairs chief Mirko Bibic noted, "Every time there is a shock to the system they ask for fee for carriage. Labour problems, lousy programming leading to reduced advertising revenue, an economic recession, they say ‘we need fee for carriage.'" Bell Video Group president Gary Smith acknowledged in his opening remarks that the broadcasting system is evolving rapidly, and called on the CRTC to establish a forward-looking framework that is flexible enough to accommodate change. Like Rogers Communications Inc., Bell called for a reduction in the minimum requirements for the basic package, a simple preponderance of Canadian services received (Rogers advocates a preponderance of services offered), and the elimination of must-carry status and genre protection. Bell even proposed adopting Rogers' five-category genre rule, with consistent Cancon and Canadian programming expenditure requirements across each category and a three-year adjustment period for existing broadcasters to come to terms with the new requirements. However, Bell also asked the commission to recognize the differences between ExpressVu and the cable-based BDUs. Specifically, while Rogers proposed eliminating distant signals in favour of offering companion video-on-demand channels, ExpressVu doesn't have that option because DTH operators can't provide VOD. Distant signals therefore need to be maintained by DTH providers so they can meet customer choice expectations. The BDUs' customer choice tune, however, seems to hit a flat note when the topic is the basic cable tier. While Rogers and ExpressVu want minimum requirements for what services have to be carried on basic, they both acknowledged their basic tiers would be much larger than the minimum requirement. CBC, on the other hand, said the basic tier should be as low 12 channels and $15 before consumers can pick and choose exactly what they want. Commissioner Len Katz obviously sees some value the CBC proposal. "Is there not a need to provide a more basic package for those who need access to some channels, such as sports, news and local programming?" he asked Bell. Smith responded that since the large majority of ExpressVu customers receive more than the basic package they clearly want more than only a few channels. Mandatory carriage also spurred a back-and-forth between the Bell panel and the commissioners. With Bell calling for the elimination of mandatory carriage requirements, von Finckenstein rehashed his previous day's proposition of giving new services mandatory carriage for their initial licence period, but Bell did not get on board. "My experience is those who receive regulatory protection don't like to grow up," said Bibic. "And when they are asked to be adults they throw tantrums." And Bell's VP of programming Chris Frank added there isn't one service valued by customers that ExpressVu doesn't have. "If it's not on the BDUs how do customers even know about it?" the chairman responded. "How do new programmers prove to BDUs that customers want their service?" Smith said one way new programming services can prove they are in demand is by building an audience on the Internet first before approaching BDUs. Original online-first successes like Tetes a claques prove there is some logic behind Smith's statement, but it may not be the best way to keep Canadians in the regulated broadcast system.

Von Finckenstein to ExpressVu: you’d have no subscribers without the OTA’s

Broadcast | April 9, 2008

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