The CRTC’s long-anticipated “Let’s Talk TV” hearings commenced Monday morning with appearances from Google, representatives from Quebecor Media’s streaming video service Elephant and the Competition Bureau of Canada.
The CRTC’s Jean-Pierre Blais leads “Let’s Talk TV,” which kicked off Monday.
The hearings, which run through Sept. 19, are taking a comprehensive look at the Canadian broadcast system, and encompass everything from the so-called “pick-and-pay” model to genre protection and the changing ways in which Canadians are consuming content.
Online consumption (through video services such as Netflix and YouTube) is at the forefront of these changes, slowly siphoning away traditional TV viewers with unregulated content ranging from clunky amateur video to professionally produced made-for-web series.
Google off to a rough start
Google Canada’s public policy and government relations counsel Jason Kee told the Commission that YouTube is already enabling Canadians to share compelling content with the world without any oversight from the federal regulator.
He warned that any regulation of online content in Canada would pave the way for other jurisdictions to follow suit, fundamentally altering the nature of internet content.
However, CRTC commissioner Jean-Pierre Blais appeared to take umbrage at Kee’s inability to provide more specific information on factors like the percentage breakdown between YouTube videos in Canada’s two official languages or whether they met the federal regulator’s definition of Canadian content. “You’re very much the antithesis of your open platform this morning,” he said.
In its appearance, the Competition Bureau advocated for greater consumer flexibility in selecting the programming services they want to receive through the introduction of a “pick-and-pay” model.
The Bureau “fully supports” any move towards increased consumer choice, said Renée Duplantis, chair of the Competition Bureau’s T.D. MacDonald Chair in Industrial Economics.
More exposure to market forces, with greater flexibility to adapt their programming based on consumer demand, is likely to result in higher-quality programming and a more valuable service
Renée Duplantis, Competition Bureau
Duplantis said the concept of “unbundling” has been successfully introduced in other industries, most notably through Apple’s introduction of the iTunes service, which enables consumers to purchase individual songs rather than an entire album.
Duplantis acknowledged the existence of contrasting studies showing the impact of unbundling, but said that increased choice will benefit consumers through a likely reduction in their monthly cable bill.
Questioned by CRTC commissioners, Duplantis said that research suggests that a minority of consumers would adopt a pick-and-pay model, with the majority retaining the bundled approach currently in place.
While acknowledging that the adoption of a pick-and-pay approach could result in the demise of some less-popular programming services, Duplantis said that individual programming services should be forced to compete on their merit rather than being subsidized by more desirable services.
“More exposure to market forces, with greater flexibility to adapt their programming based on consumer demand, is likely to result in higher-quality programming and a more valuable service,” she said.
The Competition Bureau also weighed in on vertical integration, noting that the ability of vertically integrated firms such as BCE, Rogers and Shaw to use their market power to engage in “anti-competitive” acts or lessen or prevent competition is a significant “concern.”
Duplantis said that these firms could engage in practices including raising rivals’ costs, limiting rivals’ consumer offerings or stifling their innovations in order to gain a competitive advantage.
“Actions such as these can manifest themselves downstream to consumers of both the vertically integrated and non-vertically integrated firms through higher subscription fees, less choice and fewer innovative offerings” said Duplantis.
The Competition Bureau also pledged its support for a proposal in the CRTC’s working document that would eliminate genre protection for Category A, pay and specialty services, which it said insulates these services from competition and limits their adaptability.
“More competition among services with greater flexibility to adopt their programming based on consumer demand is likely to result in higher-quality programming and a more valuable service to Canadian consumers,” said Duplantis.
Representatives from Quebecor Media’s streaming movie service Elephant also appeared before the Commission to share insights from the company’s first six years.
First introduced in 2008, Elephant is a not-for-profit service committed to preserving and promoting Quebec-made films, many of them dating back decades.
Sylvie Cordeau, Quebecor’s vice-president of communications, told the CRTC that more than 64,000 films were ordered on Elephant in 2013, a 300% increase over 2009. All revenue generated by rental of these films is redistributed to creators and rights-holders, said Cordeau.
While 80% of the rentals come from Canada, the service also generates 10% of its hits from France and an additional 2% from the U.S.
The company told the federal regulator that it can cost between $30,000 and $40,000 to restore films, with restoration of older or badly damaged films reaching as much as $200,00. These amounts do not include the cost of creating a trailer or other marketing materials for the film, said Elephant representatives.
Let’s Talk TV is being live-streamed by CPAC
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