CRTC’s hybrid-VOD category takes effect

The CRTC on Thursday released final rules for a new category of video-on-demand (VOD) services in which operators can avoid regular broadcast regulations, even if the service is offered through a broadcast-distribution subscription, on the condition that it is also available online to all Canadians. The new rules clarify the proposal released by the CRTC in March, adding some specific provisions such as that operators of these hybrid services must not provide any exclusive programing on the set-top box version of the service that is not available online. “As a result of today’s changes, Canadians will have more opportunities to discover Canadian programming, including original Canadian programming, on multiple Canadian-operated platforms,” the CRTC said in its decision published online. “Further, Canadian companies will be able to compete on an equal footing in an on-demand environment.” The commission said the new category of VOD services is effective immediately. The CRTC said it would not require the online and set-top box versions of such services to be identical under this new category, noting arguments from Rogers Communications Inc. and Shaw Communications Inc., operators of the Shomi streaming service, that there are technical reasons why programming cannot always be the same. However, the commission said that in order to qualify for the hybrid video-on-demand (HVOD) exemption, all exclusive programming offered by a service would have to be available on the online version. It also said it put an “undue preference” provision in the HVOD exemption “to deal with any other instance of offering programming on a preferential basis.” The commission said it rejected calls from independent TV-service providers to ensure that all programming offered on the set-top box version of an HVOD service is also available to other TV service providers. “The Commission’s objectives in authorizing these new services were to provide access for all Canadians to HVOD content without requiring authentication through a specific BDU, mobile or ISP subscription and to put Canadian VOD services on a more equitable regulatory footing with online video services that operate under the DMEO ,” it said. “In the Commission’s view, the proposals put forward by some parties would appear to be inconsistent with these policy objectives in that they attempt to treat the BDU version of an HVOD service in the same manner as a traditional licensed VOD service by making it subject to the same prohibitions against programming exclusives.” The CRTC noted that this exemption order will allow operators to provide services over a closed broadcast-distribution system without being subject to regulations concerning the inclusion and funding of Canadian content. It noted that the Canadian Media Production Association (CMPA) opposed the lack of Canadian content requirements for this new category. While not relenting on this aspect of the new VOD category, the CRTC did accept a proposal from the Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ) and the Association québécoise de la production médiatique (AQPM) that operators of such services be required to provide annual reports detailing things such as subscriber numbers, as well as how much is spent on Canadian content and how much domestically sourced programming is available through their services. The CRTC said it would maintain its proposal that HVOD services be prohibited from showing “anything that contravenes any law, abusive comment or abusive pictorial representation, obscene or profane language or pictorial representation, and false or misleading news.” It said some interveners felt such requirements were “out of place” with respect to online content. But the commission said “it is unlikely that HVOD services would not be able to meet the criteria, given that the codes in question have been co-created with the industry and would generally already apply to that programming when offered by other licensed or exempt programming services.” Scott Henderson, spokesman for BCE Inc.’s Bell Media division, said in an email that the company intends to start offering CraveTV service to anyone in Canada with an Internet connection at the beginning of next year, as announced last month, thus meeting the CRTC’s conditions for an exempt HVOD service. Henderson noted remarks from Bell CEO George Cope during a conference call Thursday to discuss quarterly results in which he said CraveTV currently has 730,000 customers, and that “going over–the-top” would allow the service “to pursue approximately 11 million households.” CraveTV is currently only accessible to those with a TV subscription with Bell or one of its partner service providers, including Telus Corp. and Eastlink. Shomi announced in May that it would become available to all Canadians online at some point this summer. Shomi is currently available only to those subscribing to TV or Internet services from Rogers or Shaw. Shomi spokeswoman Julie MacFarlane said in an email Thursday the operation would be seeking an exemption under the CRTC's new category, and that "we have plans to launch direct-to-consumer soon." Officials from Quebecor Inc., which operates the Club Illico streaming service, did not respond to a request for comment. It’s unclear if it will attempt to have Club Illico exempted from regulations under the new HVOD rules. The online version of Club Illico is only available in Quebec and Ontario, not meeting the new category’s criteria of being available to all Canadians. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

CRTC’s hybrid-VOD category takes effect

Broadcast | August 6, 2015

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CRTC’s hybrid-VOD category takes effect

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