New regulations allowing consumers to unbundle cable and satellite TV packages will damage the economy and trigger massive losses in Canada’s programming industry, says a report that calls for a federal review of the changes.
Prepared for media unions and public advocacy groups, the report says the rules will cost nearly 7,000 jobs and $400 million in annual spending on Canadian broadcast content by 2020.
Released Tuesday, the report prepared by consulting firm Nordicity Group and broadcast consultant Peter Miller said spinoff effects on related services will sacrifice another 8,300 positions and subtract $1.4 billion from Canada’s annual GDP.
The new rules being implemented by broadcast regulator the Canadian Radio-television and Telecommunications Commission will let consumers pick individual channels by the end of 2016 while distributors must offer slimmed down cable packages capped at $25 per month beginning in March.
The so-called skinny basic cable will be an alternative to existing multi-channel bundles, which compel consumers to pay for specialty channels in order to access sought after sports and movie content.
Independent Canadian producers have said they could be orphaned in a pure “pick-and-pay” world but the CRTC said consumers will still have the option of buying the more expansive packages.
Randy Kitt, media council chair for Unifor, one of the unions that commissioned the report, said the CRTC has failed to release any economic impact data accompanying its policies.
“This study fills a void, and should send a powerful message to the new government.”
Stephen Waddell, national executive director of English language actors union ACTRA, said implementing the CRTC proposals could mean thousands of hours of Canadian stories will never be produced.
“The tremors will be felt throughout the Canadian system from television to film to digital platforms,” accelerating the impact of technological change while weakening Canadian broadcasters.
The report says large distributors are already feeling the pinch as Canadians cut cable subscriptions in favour of digital services such as Netflix, in the midst of an economic downturn linked to declining oil prices.
The study says rules that allow consumers to opt out of big cable packages along with an easing of Canadian content requirements during daytime hours exacerbate trends already hitting TV broadcasters.
“Four-hundred million dollars a year would be a huge hit to Canadian TV production,” said Tim Southam, Directors Guild of Canada national president.
“Consumers do not benefit from being asked to pay more for fewer Canadian choices. The DGC urges the government to review these dangerous policies.”
A spokeswoman for the CRTC said she is not aware of commission research forecasting economic impacts and job losses from the new rules, but said the regulator is confident the changes will generate opportunities.
In announcing the new regulations after public hearings in 2014, CRTC chair Jean-Pierre Blais said they provide an incentive for creators to produce high-quality and compelling original content.
“Some channels may not survive in an environment marked by greater choice,” he said. “Others will adapt and thrive, and new ones will emerge.”
An industry insider, meanwhile, who spoke on condition of anonymity, said there is little doubt the CRTC rules will impact specialty channels, but said some of the report’s dire predictions may not pan out.
He said estimates may be based on subjective assumptions, adding that many Canadians will likely opt to remain with their existing cable bundles once providers unveil the higher pricing on a la carte channels.
Ian Morrison, a spokesperson for the Friends of Canadian Broadcasting, one of the groups that commissioned the report, said the new Liberal government could ask the CRTC to review its rules and Ottawa could rescind changes if they run counter to the Broadcasting Act’s requirement for a preponderance of Canadian channels.
“For good reason the new government has abandoned Stephen Harper’s policy of denigrating the CBC. It should take the same approach to the ... TV decisions,” Morrison said.
The report says the broadcast changes are part of the former Conservative government’s consumer choice agenda that includes a reluctance to regulate and tax offshore online media providers including Netflix and Hulu that offer streaming video services in Canada.
In its 2013 throne speech the former government signalled its support for cable unbundling after then-industry minister James Moore in a 2012 letter to Blais said “consumers should have more access to programming choices and affordable choices across all distribution platforms.”