The major U.S. networks should be included in a proposed “skinny basic” cable TV package to keep them from going “over the top” to video streaming services such as YouTube and Netflix, cable giant Rogers Communications said Thursday.
Big networks ABC, CBS, NBC, FOX and PBS might sell their content to online providers or even launch their own Web streaming service in Canada if they were left out of “skinny basic”, Rogers executives told a Canadian Radio-television and Telecommunications Commission hearing in Gatineau, Que.
And if consumers were allowed to select individual channels à la carte on top of the basic package, U.S. players could abandon the Canadian cable system entirely, Rogers said.
The company told the ongoing hearings into the future of Canadian TV that households would still get the U.S. networks, online or free over the air with a backyard antenna.
“I don’t want to lose these folks from the ecosystem,” senior vice-president for content David Purdy told the commission.
Rogers chair Phil Lind added that it would be “crazy” to market a cable package that doesn’t offer all available channels.
And while Rogers said it can support a basic package that includes U.S. content while allowing consumers to buy small bundles or pick packs of channels, it said a pure à la carte approach would be problematic.
Purdy said such a system would trigger complex negotiating issues with American providers, adding that some services such as Discovery Channel do not have cost structures that support the approach.
Rogers also objected to a CRTC proposal that would cap the basic service price at $20 to $30 per month, saying the move would stifle innovation and discourage network upgrades.
In its appearance before the commission Wednesday, rival Bell Media said it would be prepared to offer skinny basic and à la carte.
But Bell said it would be difficult to offer the basic service for less than $27 a month, the rate charged by Quebec’s Videotron for its basic package. Montreal-based Bell also said the U.S. television networks should not be included in a basic package.
Another service provider, Shaw, added its voice to the mix Thursday, rejecting options floated by the CRTC for requiring carriers to offer slimmed-down basic service.
What the three companies agree on is a need to reform regulations to encourage the production of more high-quality Canadian content.
And they warned against any rules that would leave them at a competitive disadvantage with new online video services such as Netflix.
Rogers slammed a proposal to include the online revenues of broadcasters in the definition of broadcasting revenue.
That would put Canadian online services, such as Rogers’ just-launched Shomi, at a competitive disadvantage with non-traditional online broadcasters, said Rogers executive Keith Pelley.
“Taxing new Canadian online services like Shomi, while giving Netflix a free pass, would not address concerns about declining contributions to Canadian programming,” Pelley said.
The Ontario and Quebec governments, along with the CBC and cultural organizations, have suggested that the CRTC regulate Netflix and other online video services to force them to contribute to the television content production system.
But the Harper government has warned the CRTC that it will reject any attempt to create what it has dubbed a “Netflix tax.”
Rogers also sided with Bell in denouncing a proposal to ban the simultaneous substitution of Canadian advertising for American ads.
Either option being proposed for banning the practice “would devastate the conventional TV sector in Canada,” Rogers said in its submission.
Rogers executives at the hearings predicted that Canadians will eventually get all of their TV programming over the Internet.
In the meantime, they urged the CRTC to give them the regulatory tools they need to deal with the transition from traditional broadcasting.
The CRTC is conducting public hearings to discuss broadcast regulatory reforms that are to be implemented before the end of 2015.
It has proposed changes that would compel cable and satellite providers to offer customers slimmed-down basic cable packages made up of Canadian channels, along with the ability to choose individual channels on a discretionary basis.
With files from The Canadian Press