Vertically integrated companies not keen on ‘skinny basic’ plans

GATINEAU, QUE.—Shaw Communications Inc.’s plan personalizer provides a so-called “chubby basic” television service, but the company isn’t keen on adopting a mandatory “skinny basic” service containing fewer channels. Nor are other vertically integrated players. As part of its vertical integration hearings, the CRTC is asking whether a mandatory basic television service should be required. “If there was an appetite … we’d certainly cater to that, but the market isn’t going that way,” Shaw CEO Brad Shaw told reporters Wednesday. “People are looking for more services. How they access it is in a totally different way and across multiple platforms. If there’s a market there, we’ll be there to service it.” Shaw’s “chubby basic” carries some of its own channels, forcing consumers to purchase them as part of a basic package. CRTC chair Konrad von Finckenstein said Wednesday that demand could change in the coming years as consumers start to view more content on other platforms and so-called “cord cutting” gains momentum. He said a “skinny basic” service--a smaller, cheaper package than existing basic plans--might be more desirable down the road. A skinny basic plan would include all local channels and very limited other programming. On Tuesday, von Finckenstein challenged BCE Inc.’s assertions that the basic service doesn’t work, saying there are over-the-top and other offerings now available to viewers. “Why don’t you put the customer in charge? Let him decided whether he wants the skinny basic or not. You’ve done it before, so obviously it is feasible, it is economically feasible,” he said. “Why would it be contrary to your philosophy to let the customer decide rather than making him buy a larger package which includes stuff he doesn’t want?” But Mirko Bibic, Bell’s senior vice-president of regulatory affairs, rejected that reasoning. “Mr. Chairman, it is not correct for you to say that by virtue of the fact we offered it, that proves it was economically feasible. In fact it is not economically feasible,” he said. “We tried it, there was no customer take-up, and the financials just don’t work.” On Wednesday, Cal Millar, president and chief operating officer of independent broadcaster Channel Zero—which owns CHCH TV—asked if the service was a means to encourage viewers to stay within the Canadian broadcast system. “Is skinny basic a strategy where the objective is actually to encourage people to stay in the Canadian broadcasting system, in the paid system, in the existing system? And if it is, the strategy of lower price would encourage that,” he said. “ totally onside with the objective. I’m not sure the strategy will work and that’s not something we’re really privy to the information for.” Similarly, in his opening remarks to commissioners Wednesday, John Pollard—president of independent company CHECK Media Group, which presented with Channel Zero—said he would expect all local, over-the-air services to be included in any skinny basic service in high-definition. news@thewirereport.ca

Vertically integrated companies not keen on ‘skinny basic’ plans

Broadcast | June 22, 2011

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