Category Archives: CRTC

My 15 Minutes of Fame

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So apparently there aren’t a lot of independent policy types out there willing to talk to media about their opinions.  I’ve never done TV before (well, one little CHCH lunch time news interview back when I was producing a youth research website – barely counts) but I had two appearances this past week to talk about the CRTC and Talk TV.  I was on TVO’s The Agenda with John Doyle (yes, our difference of opinion about the Golden Age of TV in Canada came up but we also agreed on a few other things such as how much a shame it was that CBC had cancelled “Strange Empire”) and then interviewed for a piece on The National on the evolution of the CRTC.   I got to explain the DMEO in the National piece – without using acronyms!

My fingers are crossed that somehow these appearances lead to paying work but either way it was more fun than I thought it would be.

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Talk TV – Pick and Pay

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I know, you’re saying ‘what, another post on pick and pay’?  I just want to direct you to my post on the topic over at TV, Eh? where I outline the many variables that I believe will have to play out before we really know the impact of the CRTC’s pick and pay decision.

I also have one other point that didn’t fit into the post but has been bothering me ever since.   In the CRTC’s decision on pick and pay it confirms that the current process for authorizing non-Canadian services will be maintained.  In other words, non-Canadian services will only be authorized if they do not compete with a Canadian pay or specialty service.  Remember – the previous week the Talk TV decision on content got rid of genre protection and nature of service descriptions.  So how exactly will it be determined if a service is competing when the Canadian service has no set definition?  What happens if the Canadian service decides to morph into something else? And then back again?

So, if the History Channel decides to completely abandon history programming and focus on pawn shops and outlaw bikers does that mean the U.S. History channel will be able to be authorized in Canada?  But what if History changes its mind and decides to go back to history programming?  This is my confusion.  It would be great if at some point the CRTC could explain how exactly this is going to work.

Talk TV – Content Decision

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In case you missed it, I wrote three blog posts about last week’s Talk TV decision over on TV, Eh?.  The first is an overview of issues while the second drilled down into the new Hybrid VOD licence and the third focused on the potential impact on the independent production sector.  There have been quite a few other good overviews of the decision.  I recommend the Globe and Mail’s Kate Taylor, Cartt (subscription) and Carleton Professor Dwayne Winseck.

With the pick and pay part of Talk TV expected Thursday March 19th, you can expect more blogging and a lot more chatter on the twitterverse.

Talk TV – Building and Repairing Bridges

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There were three Talk TV decisions released today on OTA television, simsub and mobile broadcasting.  I blogged about it for TV, Eh? over here.  They are mostly consumer-facing decisions but I am a little concerned about the impact that the no simsub for the Superbowl decision will have on future Bell Media revenues, and therefore its expenditures on Canadian programming.  However, as the infographic shows, we have a lot more decisions to come so it’s hard to say what the impact will really be till we’ve seen them all.

Update:  For a very thorough review of the issues and potential negative impact of the Superbowl Simsub decision, please read Michael Hennessy here.

You Can’t Always Get What You Want . . .

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I’m talking OTT and SVOD in Canada here so I’m not going to finish the quote. As mentioned earlier, I played around with Shomi during the free 30 day trial that I was entitled to as a Rogers subscriber. Then Bell Media was nice enough to give me a 30 day guest pass to the mobile version of CraveTV (since I’m not a Bell subscriber that’s all I could get). So I’ve played around a little, to the extent possible.

Here’s my problem. What I would really like to have is impossible either because of outdated business models, Canadian broadcast regulation or a lack of Canadian OTT regulation. I’m stuck.

I would like to have a service that flows seamlessly between my television and my iPad (my kid would also like it to work on her shiny new Nexus phone) so that I could switch platforms in mid-episode or at least keep track of which episode I’m on in mid-binge. This is possible with Netflix but not possible with Shomi and CraveTV because they are licensed separately (OTT being exempt from regulation and SVOD being fully regulated).

I would like a Canadian service that supports Canadian programming on all of its platforms. Shomi and CraveTV have to make a contribution to Canadian programming and provide a quota on their SVOD platforms according to VOD regulation, but have no such obligation for their OTT platforms. Netflix has no requirement at all.

I would like to watch the Golden Globes and know that I have access to the cool new shows like “Transparent” (Shomi announced during the awards that they will be carrying it, it is on OTT Amazon Studios in the U.S.) and “House of Cards” (on Netflix) without having to pay separate OTT subscriptions for each one. Exclusivity is a model that only frustrates the consumer in the Internet world.

I would like to be able to be a Rogers cable, internet and wireless subscriber (well, maybe not but I am anyway) and subscribe to CraveTV. CraveTV is only available to Bell, Telus and a few smaller BDUs and is unlikely to be available to subscribers of their competition. While Shomi and CraveTV are very similar in how they work, and both have lovely interfaces on the mobile platforms (though both were buggy on their web platforms), I would like to have the option to subscribe to CraveTV if I want to and not be locked in to Shomi because of my cable provider.

So, as a Canadian and a lover of television, CRTC regulation and the BDU business models are not working for me right now.

Shomi – I Get It Now

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If you follow my twitter feed then you know that I’ve been very puzzled by the regulation around the new Shomi service. Shomi is a partnership of Shaw and Rogers, which provides film and television programming through laptop, tablet and set top cable box.   I think I’ve figured it out.

The Rogers FAQ states that most Rogers customers will access Shomi through the set top box and then online through authenticated access. For those customers, it says, Shomi is subscription video-on-demand. For Internet-only customers, Shomi operates under the Digital Media Exemption Order (“DMEO”) as an OTT service.

Setting aside the fact that regulation isn’t based on customer billing, I couldn’t figure out how one service could be both OTT and exempt and SVOD and regulated at the same time. Was it not one service that is either regulated or exempt (though I admit exemption is regulation, I do mean by that subject to the significantly lesser regulation under the DMEO)?

It was suggested to me that I was looking at this wrong. It’s not one service but two. There is the SVOD service that is subject to VOD regulation and the OTT service that is exempt under the DMEO. They have different catalogues because of rights issues and regulatory obligations. And they are definitely different experiences. I had difficulty authenticating on my laptop (problems with it recognizing that I wasn’t blocking cookies, which I understand others have experienced) but was able to download the app and log on, on my tablet.   The tablet experience is quite similar to Netflix. However, unlike Netflix the two services are not linked so I cannot flip back and forth while watching a program or even keep track on VOD of where I am in a series I’m watching on the tablet. Two services.

Now I wonder how the contribution to Canadian programming will be calculated for revenues generated by customers who access both the SVOD and the OTT services.  Rogers and Shaw know just how many hours are spent on each platform so that should be easily and fairly allocated if they release that data to the CRTC.

So there’s work still to do but I at least have a grasp of the regulation now and that makes me happy. Will I keep subscribing to Shomi after my free trial? Honestly, if I could get the interface experience of OTT on VOD, I would be willing to pay the additional fee. But then I’d be back to being confused.

Netflix and Google – What are the Stakes at the CRTC?

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There’s been a lot said in the past few days about the fireworks between the CRTC and Netflix last Friday on the last day of the TalkTV public hearing. I’m going to add my two wonky cents from a content creator’s perspective. What’s at stake here for you?

First the backstory (you can find the relevant notices here). In 1999 the CRTC had a consultation on new media and as a result issued the New Media Exemption Order. In that order they stated that they had jurisdiction over new media broadcasting, they defined it, and they exempted it from regulation on the basis that exemption would foster growth and that would contribute to the objectives of the Broadcasting Act. This was 15 years ago so I think we can give them that one.

The Internet world moved quickly and there were repeated calls for the CRTC to revisit that order over the years but they did not until 2009. At that time the definition of new media broadcasting was expanded to include mobile, an undue preference provision was included and the CRTC included a provision that new media broadcasting undertakings would provide information on its activities as requested by the CRTC to allow it to monitor the development of new media broadcasting. In 2010 the CRTC decided that it would start by requiring regular reporting of new media broadcasting undertakings affiliated with licensed broadcasters. Don’t get me started on the Working Group that was struck but was completely ineffectual because of the broadcasters’ reluctance to provide meaningful reporting – yeah, I was on that one.

Then in 2012, after the 2011 fact-finding exercise on OTT services, the CRTC finally acknowledged that new media was in fact no longer new and changed the name of the order to the Exemption Order for Digital Media Broadcasting Undertakings (more commonly known as the Digital Media Exemption Order) and amended the order with four new sections: exclusivity, anti-competitive head start, obligation during dispute and dispute resolution. This was a recognition that digital media broadcasting had become real businesses with real business issues that needed to be regulated. For example, the exclusivity clause means that CTV GO cannot be offered only to Bell customers and Rogers Anyplace TV has to offer CTV as well as City channels.

So while the general public was ranting about how the CRTC had to be prevented from ‘regulating the Internet’, it very publicly was already regulating broadcasting services being offered over the Internet and mobile. The affiliated OTT services pushed back on reporting and dragged their feet on negotiations (e.g. Shaw customers had access to Global Go long before other BDU customers) but the regulation had no impact on foreign OTT such as Netflix and YouTube. [Note – they do benefit from CRTC net neutrality regulation but that’s a post for another day.]

Until this hearing. The CRTC invited Google and Netflix to appear and asked both of them for evidence to back up their statements that there was plenty of Canadian programming on YouTube and Netflix so therefore there was no need to regulate (or rather extend regulation). As newcomers to the CRTC they can be forgiven for not knowing that Blais is a stickler for backing up your big statements with facts but Netflix had the two week advantage and still came to the hearing with unsubstantiated statements. The Commission, and Blais in particular, got very angry due to the repeated refusal of Netflix to agree to deliver requested data without a ‘guarantee’ of confidentiality.

The Twitterverse went wild with accusations that Netflix was being disrespected but primarily by those who are not regular CRTC observers and do not understand the process. Netflix in fact was disrespecting the administrative tribunal that is the CRTC and its confidentiality process. I can’t do a better job than Dwayne Winseck did in his blog post so I refer you there for an explanation of the process and why Netflix was wrong.

It appears to me that as the past 15 years of CRTC regulation of OTT had no impact on Google and Netflix they ignored it. So now the CRTC is exercising its jurisdiction by requesting data and Google and Netflix have to decide whether to acknowledge the jurisdiction or fight it. Yes, the CRTC will likely grant confidentiality (they certainly have in less sensitive situations) so that really is not the issue. Google and Netflix do not want the next step of regulation. Netflix may already be dealing with this in Europe where they have to pay a Culture Ministry tax in France (an actual tax) if their annual earnings are more than 10 million Euros and the French government has either recommended or required (Commissioner Pentefountas requested clarification from Netflix) that the Netflix recommendation engine favoured French and European content. Netherlands has similar laws about favouring domestic content.

Canada is a huge market and an easy market for Google and Netflix. They have to weigh the potential aggravation and cost of complying with CRTC regulation to the revenue that they make from the Canadian market. As of publishing this post nothing has been posted publicly but CRTC staff may be reviewing it – I will update. I doubt that they will just walk away. If they do not, we could see Canadian television shows and features showing up in the recommendation engine and not relegated to the “Canadian” category that consumers have to go hunt for. And maybe, one day, we could see foreign OTT making a financial contribution to the Canadian broadcasting system that they are participating in.

[Kudos by the way to Denis McGrath for trying to explain all this to ‘free Internet’ folks one tweet at a time. Check out his feed at @heywriterboy for an impressive attempt.]

Update 6:10pm – Financial Post reporter Claire Brownell has tweeted:

 
The ball is now in the CRTC’s court.

More Talk TV – Drawing a Box Around It

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So as I’ve said before, this TalkTV consultation is HUGE. My big concern has been that there would be very little air time for programming issues as the Commission and the media focused on pick and pay and simulcast. Mainstream media has certainly gone in that direction already (with the notable exception of Cartt.ca, which has had a series of articles on almost every topic raised in the hearing.).

The Commission is now trying to draw a box around what will be discussed at the hearing by throwing out some proposals and asking for a focused discussion on those proposals. Stakeholders are free to talk about anything they want and in particular to float alternative proposals but this is a starting point.

The Commission has also re-opened the online public discussion forum and asked the public for their thoughts on the proposals now and over the course of the hearing. So instead of yelling at your computer screen at some of the things said at the hearing, you could post to the discussion forum.

Back to the proposals. They are extensive but they do limit the discussion from the 80 different questions in the original Public Notice. There are now 29 issues, though some of them have an Option A and an Option B. I find some more interesting than others, particularly those focused on Canadian programming. Here are a few to listen for in the oral public hearing (and note – @CRTCeng confirmed that the hearing will be available by audio and video feed so we’ll be able to see faces).

Simultaneous substitution: There are two options, either no more simsub or remove simsub from live events such as the Superbowl or Oscars. This is interesting because while a few stakeholders expressed concern over the impact of simsub on programming schedules, few came right out and asked for simsub to be rescinded. There was a general recognition that while it might not be perfect, simsub revenues are hugely important to the health of conventional broadcasters and by extension to their level of expenditure on Canadian programming. Apparently there aren’t even that many complaints about not being able to watch US commercials during the Superbowl. Seriously – if you really want to watch them, they’re almost immediately available online.

Redefining Broadcasting Revenues: The proposal is to include revenue from programs offered online in the base for calculating CPE. Broadcasters would then also be able to count expenditures from programming created for online platforms as part of their CPE. The CRTC sees this as a way to encourage made for digital content but it is also a huge potential first step towards looking at the broadcasting system as a whole and not its regulated and unregulated parts. Given that no proposal included a reference to extending regulation to OTT, this could be the CRTC’s first step towards platform agnostic regulation. Or it could be an attempt to close a loophole as its been widely speculated that since broadcasters have the ability to allocate revenues and expenses between regulated and unregulated platforms they are doing so to their advantage. I expect a lot of ‘oh no, you can’t make us do that’ and ‘oh no, we just can’t identify our revenues/expenses that way’ and of course ‘but we don’t make any money from online platforms and we are incapable of proving that’ and other such arguments heard before.

Programs of National Interest: First there is the positive statement that PNI will be maintained (sad that this had to be said). Then, that children’s programming will be included. There has been a decline in commissioning original children’s programming and this is the CRTC’s response. Expect to see discussion about whether this will be effective or whether there also needs to be CPE sub-quotas for children’s programming (as well as feature films and long form documentaries).   Just because you CAN include children’s programming in your CPE does not mean that you will, particularly if you are a corporate group without any children’s services and have been allowed to walk away from children’s programming on your conventional services (*cough* Shaw *cough* Rogers *cough*).

Programming requirements: An interesting proposal is to eliminate exhibition requirements during the day but maintain them for prime time. This will mean no incentive for Canadian daytime talk shows, particularly on conventional stations that can also simulcast US daytime talk shows or soaps. Do people care? This is one where I’d be interested to see if there are any responses on the online discussion forum. How much do people want their “The Social” and “The Marilyn Dennis Show” or can they live with “The View”. From a policy perspective, it’s saying that the Broadcasting Act can fulfill its goal of providing a diverse range of programming to Canadians through prime time programming alone. I’m not sure that’s what was intended. I’m also not crazy about getting rid of any exhibition requirements while scheduled programming is still important to Canadian audiences. We are not yet in an on demand world.

Another programming requirement proposal is to extend CPE requirements to all licensed services. Currently they are limited to conventional services, Cat As and Cat Bs with subscribers of 1 million or more. CPEs would be set at licence renewal and it is assumed that those Cat Bs with low subscriber bases or niche audiences would have lower obligations than the other services. They would also be part of the corporate group, if they are owned by one of the large companies, and could help to amortize costs. This could mean more money for CPE generated by services that air little Canadian programming because of their conditions of licence. If this extends to independent Cat Bs (and it’s not clear from the wording), I can see them having more of a problem than the Cat Bs in corporate groups.

Genre protection: The proposal is to eliminate genre protection and nature of service definitions. If this goes through then the Commission will overturn its recent decision on OLN and you’ll get your Whisker Wars back because services will be able to morph into anything that they want, whenever they want. I find this an odd proposal given that they just came down hard on OLN and before that issued warnings to G4TechTV and OWN and others. There are a number of reasons to advocate for at least enforced nature of service definitions both for diversity of programming (i.e. to avoid all services chasing the same audiences) and clear branding in a pick and pay environment.

Local programming: There were a lot of submissions which identified the need to re-examine the funding mechanisms for local programming and in particular to bring back some form of LPIF. The Commission apparently doesn’t want to go down that road (it is always very reluctant to reverse decisions) so instead they are suggesting that the expense burden on local services should be lightened by removing their obligation to maintain transmitters. Given how many stakeholders advocated a more direct funding regime, it could still be a topic at the hearing.

Finally, the Commission proposes that all of these rules would come into place December 15, 2015.

It’ll be interesting to see if the Commission’s attempt to draw a box around what it wants to talk about will actually limit topics or just add new ones to all the things that stakeholders want to talk about. This could be the last big hearing for some time so everyone wants to get their kick at the can (using a very old analogy, which seems quite wrong in this context). There’s also the fact that some of the decisions about programming and in particular tweaks to the Group Licence Policy have to be made now in order to implement them in the 2016 licence renewal process.

This is going to be a long hearing.

 

 

 

 

 

 

 

 

 

 

Rogers Licence Renewal

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When the Rogers Licence Renewal decision came out last week (July 31, 2014) it didn’t create much fuss. That’s partly because it is the middle of summer and partly because it is a short term licence renewal – many of the issues will be addressed again and perhaps in more depth at the Group Licence Renewal in 2016.

As a reminder, Rogers had an earlier licence renewal because at the time of the Group Licence Policy and the group licence renewals, Rogers was still a group of not yet national conventional stations and a few specialties but had already started buying up what they needed to become a third diversified group (Corus is part of the group licensing framework but with almost no conventionals so is a different beast altogether). Rogers wasn’t a group in 2010 but they are now.

Being an official group (they were sort of a group before in the way that they were licensed but not fully) puts Rogers on the same footing as Bell, Rogers and Corus going into the Group Licence Renewals. That’s important.

There are a lot of picky little details in the licence renewal but I would like to highlight a few things that caught my attention.

There were a lot of concerns about Sportsnet 360 being included in the group. It is not a Category C (news and mainstream sports) service but a Category B so there is no regulatory reason to exclude it. There were concerns expressed at the hearing that Sportsnet 360 combined with CITY broadcasts of NHL games would allow Rogers to spend all of their non-PNI CPE on sports and specifically NHL hockey. The Commission in the decision advised that they shared stakeholders concerns but they didn’t think much could be done to change programming plans during the coming two years so rather than impose regulatory safeguards they would instead require detailed reporting and monitor the situation. So the message is ‘don’t do what we’re all afraid you’re going to do or we will regulate’.

The level of reporting required is also interesting in a wonky way. Rogers has a multiplatform deal for the NHL rights and that means an ability to deliver programming across multiple platforms but also an ability to allocate revenues and expenses across those platforms. There is huge opportunity to game the system here and the Commission knows it. They have asked not only for detailed reporting of NHL revenue and expenses across regulated and unregulated platforms but also details on how the allocation formulas were arrived at.   The reporting requirement is an enforceable condition of licence and not one of those ‘expectations’ that can be ignored.

Rogers had asked for a lot of concessions on their ethnic programming on OMNI which basically would allow them to air a lot less Canadian and ethnic programming on the basis that the business model was broken. You may remember in the public hearing when Commissioner Shoan repeatedly asked intervenors if they watched third language news online because that was Rogers’ argument for asking for a reduction in prime time commitments. The answer was universally no. So Rogers didn’t get most of the concessions requested. Their Canadian exhibition requirements were slightly reduced but only to bring them in line with the exhibition requirements under the Group Licensing Policy. There are a few other reductions but in the interest of harmonizing the requirements across the OMNI stations. They were once individual services and as a result each had different conditions of licence.

Then there is my favourite part. For the third time Rogers tried to expand the interpretation of OLN’s nature of service to allow it to broadcast programs that have nothing to do with outdoor adventure. You may remember the first time when they tried to argue that “Lost” was outdoor adventure and they should be allowed to use OLN to air more US prime time dramas like “Lost” in second run. In the second attempt some of us cut and paste our arguments from the first intervention for the second intervention because so little had changed. This time the argument was that “Baggage Battles”, “Operation Repo” and yes, “Whisker Wars” (really – it’s a show about competitive beard growing – I kid you not), should all be part of a more vaguely interpreted outdoor adventure nature of service.  Not only did the Commission disagree strongly but they gave Rogers till January 31, 2015 to fix their schedule. This short time frame came in the same decision where the Commission said they understand how long it takes to change programming schedules so they didn’t think Rogers would fill its schedule in 2015 with hockey.   Finally, the requirement to report by January 31, 2015 to demonstrate how they have fixed their schedule is an enforceable condition of licence.

This nature of service decision is also interesting because it suggests that at the Talk TV hearing in September, the Commission is not likely to drop nature of service definitions as requested by some broadcaster intervenors.  Arguments have been made that enforced nature of service definitions are essential to diversity of programming and it could be that the Commission is open to this argument.  We will see.

Why am I excited about the enforceable conditions of licence in this decision? In the past these sorts of provisions would be ‘shoulds’ and were often ignored or half-fulfilled.  As a broadly written ‘must’ if the broadcaster fails to perform the required activity they can be called to a show cause hearing to give it the chance to explain why they didn’t do it and why the CRTC should not issue a mandatory order (enforceable by Federal Court) or any number of other harsher penalties such as refusing to reissue a licence. As Rogers is up for renewal in only two years they are not going to want a show cause hearing with licence renewal in question. I am hopeful that we won’t have a ‘History replaces CSI: New York with NCIS’ situation based on how the decision has been worded. We may not have a NMBU reporting situation with the NHL reporting – though I have to admit that I’m less hopeful with that one. Broadcasters do have a long history of fighting detailed reporting requirements.

DHX Approved for Family Channel Purchase

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This one is no surprise.  The kids industry was very positive about DHX buying the Family Channel services and becoming an independent (i.e. non-vertically integrated) broadcaster.  DHX clearly knows the kids market.  So this is just a quick blog post about the highlights of the decision.

As usual, there was a slight increase in the purchase price from $170 million to $173.1 million to cover the value of assumed leases.  That will increase the benefits package from $17 million to $17.3 million.  The package was allocated 85% on screen and 15% social benefits as is now expected.  Specifically it goes to:

$8 million for drama and comedy production

up to $5 million for partnerships with public broadcasters and APTN for co-licensing

$1 million for associated digital media

$1.5 million for a Children’s and Family Development Fund for new entrants to the kids sector, regional producers, OLMC’s and French language producers.

$1.6 million to regional opportunities and training in children’s script writing (social benefits)

The package hit all the right notes and was approved.

There were a couple of other issues in the decision that are relevant.  By pulling the Family Channel services out of the Astral group, the group CPE had to be recalculated.  DHX proposed 21% based on the average spend in 2010, 2011 and 2012.  This was not consistent with the formula used for all of the other groups and the CRTC adjusted it to 22% based on 2009, 2010 and 2011.  DHX’s proposal also included 2012, the year that Astral stopped spending money because they were in the process of being bought, which is why the CRTC’s CPE went up even though it includes the 2009 recession.

DHX asked that the requirement to spend 75% of PNI CPE on independent production be reduced to 60% with the ability to fill up to 40% of the program schedule on their own production.  DHX has a substantial catalogue of Canadian children’s programming and that side of the business will continue.  The CMPA was ok with the proposal as long as CPE spent on independent production is to be spent on original independent production and not repeats.  The CRTC agreed.  This is interesting because it is the first time that the CRTC has specified that CPE needs to be spent on original programming.  The Group Licence Policy was supposed to prevent a reliance on repeats because of the sheer volume of spending required.  The independent production community all along thought that the levels for PNI were set too low and now reporting, to the extent that it is usable, suggests that broadcasters are in fact relying on repeats for their PNI CPE and spending their original dollars on incremental benefits spending.  As a result, CMPA is proposing in their Talk TV submission that PNI CPE should be spent on original programming.   The CRTC may be open to this.