Roku-Dish deal, criticized by developers, would pass regulatory scrutiny in Canada

An exclusive distribution deal between online TV provider Roku Inc. and U.S. broadcast distributor Dish Network Corp. for all international content on Roku's system would escape regulatory scrutiny in Canada, industry experts say. In May, Roku announced a partnership with Dish, based in Meridian, Colo., to offer the DishWorld service to users of the Roku over-the-top TV system. The new DishWorld service offers more than 50 streaming South Asian channels, exclusive Arabic channels such as Al Jazeera, MBC, Al Arabiya, and the Brazilian TV Globo Internacional, among others. International channels are available in Arabic, Bangla, Portuguese, Hindi, Tamil, Telugu and Urdu, Dish said on its website. The deal positions Dish as Roku's exclusive provider of international content, so that international content companies seeking to independently develop TV apps for the Roku system would be blocked from negotiating directly with Roku, a Saratoga, Calif., company. DishWorld is Roku’s “exclusive” provider of international content, Ha Thai, a spokeswoman for Roku, said in a phone interview. “Any content owner or distributor who wants to publish content on the Roku platform will have to go through DISH to do so,” she said. Technology site GigaOm reported in July that Roku removed 25 third-party international channels from its system as part of the exclusive deal with Dish. Krishna Jonnakadla, vice-president of marketing with over-the-top TV developer Mango Mobile TV LLC, told GigaOm at the time that “customers are going to face limited choices and limited options.” He said they could also pay more to access Dish's “aggregated content” on the platform. When Roku announced the new DishWorld package, it said channel packages start at $20 US per month. “At Roku we believe that the majority of TV programming will be delivered on-demand, over the Internet within the next four years,” Roku, which reported in August that it has shipped three million devices worldwide, said in a DishWorld announcement on its blog May 22. “Today we’re a step closer to making that a reality.” Thai said the deal allows Roku to offer a better quality package of international content to its customers. “DISH is the leader in providing international and foreign-language content, so we decided to work with them because they have a long history of providing that content in very high-quality,” she said. Ann Mainville-Neeson, director of broadcast regulation at Telus Corp., said in a phone interview that the deal does not raise concerns about exclusivity regulations because DishWorld is an aggregation service. “It’s not really an exclusive,” Mainville-Neeson said. “The content providers that DishWorld has contracted with are not exclusive to DishWorld.” She said if another company, such as Comcast Corp., sought to offer the same international channels aggregated by Dish, it could do so by dealing directly with those channels. Mainville-Neeson said DishWorld's exclusive aggregation deal with Roku is “unimportant” because other providers and distributors can still access the content. “If DishWorld only wants to be distributed on Roku, then that’s irrelevant, because consumers can still access the content through any other distributor. The content is not itself exclusive, only DishWorld is, and that’s an aggregator,” Mainville-Neeson said. The CRTC exempts new media services from regulation but its rules state that companies cannot give themselves an “undue preference,” or competitive advantage, in the new media marketplace. The rule can be used to stop companies from the preferential distribution of content that they have the rights to for online and mobile platforms. In September, Telus filed a complaint under those rules alleging that Corus Entertainment Inc. delayed the company's access to Corus' Movie Central and HBO programming. The CRTC is considering the complaint on an expedited basis and has not accused any company of wrongdoing. The CRTC's vertical integration rules, released September 2011, said the exclusive rights to online content “designed primarily” for traditional TV must be made available to competitors under a licensing agreement, ensuring the availability of the programming to consumers of competing online distributors on fair and reasonable terms. The decision added that, “to encourage innovation in programming, the Commission finds that exclusivity may be offered for programs that are created specifically for new media platforms.” Mainville-Neeson said DishWorld is a “companion” to Dish's satellite service, allowing the company to offer a niche market service without capacity constraints. “There’s not enough satellite capacity to be able to offer each and every international service out there,” Mainville-Neeson said. “They can offer much more on some type of other basis, which is not so constrained with the amount of services you can offer.” In Canada, Roku's service competes with other over-the-top TV devices from Apple Inc., Google Inc., and Boxee Inc. Another provider, Netgear Inc., plans to roll out new TV devices in Canada in November. Independent technology analyst Carmi Levy said in a phone interview that the Dish-Roku deal could set a precedent for other over-the-top providers, including Netflix Inc.'s service in Canada, which is available through an app on online TV systems like Roku. “I would largely expect to see more partnerships like this in the future,” he said of the deal. “If you happen to be the customer of a provider or an app that ends up being locked out of the content you want, this is a negative trend … The potential for more restrictive choice for consumers is certainly there.” The industry is early into the online regulatory environment and the over-the-top service era, Levy said, leaving online TV providers like Netflix opportunities to tweak their offerings and raise the marketability of their services. Levy expects to see further deals happen on both sides of the border “in the coming months,” he said, adding that, at this point, “it isn’t clear whether the CRTC would even want to weigh in on a potential case involving, for example, Netflix.” Jason Roks, an independent technology researcher based in Toronto who in the 1990s founded the former startup Hotline Communications Inc., said in a phone interview that the deal raises questions about the kind of media available to online TV customers depending on where they live. He said it's not an area the CRTC wants to wade into, adding: “If the CRTC can't cover it, who is going to represent Canadian people and Canadian opinions on how we want media to be represented in our country? Then, the question should be, can we at all, and if we can't, what's the next-best scenario?” Roks said the Dish-Roku deal, if it happened in the cable or satellite TV broadcasting world, would be a bigger issue. The CRTC last year opened a “watching brief” on online, over-the-top TV services, monitoring them for any potential impacts on the regulated Canadian broadcasting system. Last year, for a CRTC consultation on online content services, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Canadian Media Production Association (CMPA), the Directors Guild of Canada, and the Writers Guild of Canada, filed a joint submission that said most online services would comply with enforcement if the commission's new media order was lifted. ACTRA and the Canadian Conference of the Arts called on the CRTC to conduct an early review of its new media exemption order, which is not scheduled for a hearing until 2014. ACTRA, the Directors Guild, and the Writers Guild declined to comment for this story. dgrenier@thewirereport.ca

Roku-Dish deal, criticized by developers, would pass regulatory scrutiny in Canada

Broadcast | October 17, 2012

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Roku-Dish deal, criticized by developers, would pass regulatory scrutiny in Canada

Broadcast | October 17, 2012

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Heritage and Justice ministers to appear before CHPC to address charter concerns

Local news funding needed in C-10: Bell

Cogeco accuses Wildbrain of “glaring abuse” of CRTC process over Part 1

Helped by Fizz, Quebecor reports strong Q4 earnings

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us