CRTC study: virtual BDU services could slow decline of Canadian TV

A new CRTC study suggests that the decline of broadcast television could be slowed — but not stopped — if TV providers invest in virtual or online broadcast distribution undertakings (vBDUs). The study, commissioned in 2019 and conducted by independent firm Omdia, was a follow up to the CRTC’s Harnessing Change report in 2018. It investigated the operations of vBDUs in countries where they are more prevalent such as the UK, with services such as Sky’s Now TV service, and the United States, with providers like DirecTV Now and Sling TV. vBDUs are effectively video services that replicate a traditional BDU but are distributed online as a live feed, rather than as an on-demand streaming service. They are less common in Canada — VMedia’s RiverTV service is one of the few available (BCE Inc.’s Crave is not a vBDU but an over-the-top service, more similar to Netflix). The report aimed to investigate whether further establishment and promotion of vBDUs in Canada would slow an audience flow away from traditional BDUs and towards OTT services in Canada. Omdia’s study modelled three hypothetical scenarios for vBDUs in Canada. The first, where multiple Canadian BDUs engage in “broad and aggressive promotion,” would turn these TV-on-the-web services into a mass market product. However, it would also result in operators’ TV services being somewhat “cannibalized” by the vBDUs. This was found to be the “best-case scenario,” in spite of the report’s indication that “vBDU growth will still not fully compensate for the projected decline in traditional BDU subscriptions over time” in such a situation. The study’s second model was a “medium-impact scenario”, where broadcasters are fearful of cannibalization and less enthusiastic about vBDU, meaning they launch lower-quality vBDU services. Ombia predicts that these would be taken up primarily by cord cutters, while traditional BDU services would continue to lose other subscribers to OTT. Finally, there is a “low-impact scenario”, where TV operators are “hostile” towards vBDU services and the market is not substantially developed. The report suggests that BDUs should avoid that latter scenario, concluding that TV providers developing vBDUs “would have the beneficial effect of future-proofing the BDU sector,” even as OTT services continue to grow.

CRTC study: virtual BDU services could slow decline of Canadian TV

Brief | December 17, 2020

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CRTC study: virtual BDU services could slow decline of Canadian TV

Brief | December 17, 2020

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