Industry offers cautious support for cable unbundling bid

Industry orgs and media execs argue that while the move may increase consumer choice, niche channels may struggle for audience.
TV with Remote

The Canadian industry is giving cautious support to the federal government’s bid to unbundle cable TV packages.

The ruling Conservatives on Wednesday carried through on a proposal to introduce pick-and-pay TV channel selection by Canadians.

“Our Government believes Canadian families should be able to choose the combination of television channels they want. It will require channels to be unbundled, while protecting Canadian jobs,” Governor-General David Johnston said as he read the Speech from the Throne in Ottawa.

Giving no details on how it will mandate the unbundling of cable TV packages, the federal government instead talked of consumer-friendly measures in its throne speech.

“When Canadians make decisions about how to spend their money, they must be assured of a voice, a choice, and fair treatment,” the throne speech stated.

The Canadian Cable Systems Alliance, which represents 115 cable, telco and IPTV operators, welcomed Ottawa’s support for “choice and competition for rural Canadian telecom, internet and broadcasting consumers.”

The CCSA added the organization and its members had “consistently supported increased flexibility and choice for TV viewers and welcome the Government’s commitment to these principles.”

ACTRA, Canada’s actors union, said it was disappointed the throne speech, read out Wednesday, did not pledge to support the Canadian cultural sector.

But Stephen Waddell, ACTRA’s national executive director, added in a statement that he was “pleased to see that the government took this opportunity to specifically state they will protect Canadian jobs while implementing their plans for unbundling.”

“We look forward to hearing more details of the Government’s plans to protect Canadians from unreasonable fees and we will be reaching out to offer advice and assistance on behalf of the creative community of performers in Canada,” he added.

There was a warning from the Friends of Canadian Broadcasting, which said cable unbundling will push up channel pricing.

“In a pick and pay environment, popular U.S. services are likely to increase their carriage fees once they are no longer part of a package, while the smaller Canadian services will falter,” Friends spokesman Ian Morrison said in a statement Wednesday.

Media execs reacted with similar cautious support, noting that while the move makes sense for consumers, there could be a net negative impact on smaller, niche channels.

ZenithOptimedia CEO Sunni Boot said the move is long overdue, adding that broadcasters should have rolled it out on their own without a push from the government.

“In an age of consumerism, where choice is an entitlement and an expectation, the industry itself should be offering consumers what they want. Broadcasters should have an economic model that can support that choice,” she said.

While she conceded that the move may result in some some types of niche content losing its support or some specialty channels folding outright, Boot says it’s up to the broadcasters to find ways to make these channels and content more relevant to the Canadian consumer, particularly in the face of increased competition from digital content hubs and services like Netflix, which aren’t reliant on CRTC approval.

For media buyers, she said the shift to a pick-and-pay model will be positive, pointing out that advertisers will be able to place their dollars with more confidence because they’ll be investing in channels and content that consumers have paid to engage with.

Starcom MediaVest CEO Bruce Neve, however, sees the potential disappearance of smaller channels as problematic for advertisers.

“For media buyers, if some of the channels start to lose subscribers and audience, the value proposition and rates go down. If channels start to disappear, what we don’t want to see is a decrease in inventory and options, because that will impact prices on our side,” says Neve.

He adds that while eventually the shift to pick-and-pay will allow advertisers to spend their ad dollars more confidently against an engaged, paying audience, there will be a period of flux in which audience and subscriber numbers around channels and content will be difficult to track as consumers decide what they do and don’t want.

With files from Etan Vlessing and Jordan Twiss