Tag Archives: Shaw

Shomi – I Get It Now

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.

Advertisements

CRTC’s Corus Decisions – A Few Lumps of Coal In With The Presents

C’mon – I had to go with a holiday themed subject line on the last real working day before the holiday break.

Yes, the CRTC decided that it was in the public interest to allow Corus to buy the Teletoon services and Historia and Séries+.  The interesting stuff (for a CRTC watcher like myself) is in the detail.  A lot of detail.  Don’t worry, I do have holiday baking to do so I’m only going to touch on what are for me the most interesting points.

A lot of people were watching the Historia and Séries+ part of the hearing to see whether the CRTC would agree that benefits would only be payable on the half that Corus was buying from Bell and not on the half that they were buying from Shaw.  There has been a lot of confusion on whether Shaw and Corus are related or not (even at Shaw and Corus).  There have been long rumoured plans for Shaw to take over Corus fully but a requirement to pay benefits would make that a costly reorganization.  Well, it looks like they can go ahead.  In both the Historia and Séries+ decision and the Teletoon services decision, the CRTC made a clear statement on how they see Shaw and Corus.  Are they one or two?  Depends.

For the purposes of determining effective control, Shaw and Corus are considered part of the same ownership group as they are both controlled by JR Shaw.  But when applying the group-based licensing policy, Shaw and Corus are two designated licence renewal groups. [para 14 in Teletoon and 18 in Historia and Séries+].  So – no benefits are triggered by the acquisition of the Shaw ownership of Historia and Séries+ and none will be triggered when Shaw buys Corus.  I’m not sure that I agree but the clear statement is helpful.

The decision clears up what has been a very odd situation with Terms of Trade and Teletoon.  While Teletoon’s owners Bell and Astral had both signed a Terms of Trade agreement with the CMPA, Teletoon said that it was not a signatory so took the position that the Terms of Trade didn’t apply.  Well, it does now and it is a condition of licence for all Corus properties.  The CRTC took it further and requires Corus to enter into a Terms of Trade agreement with the AQPM (the French producers in Quebec) within one year and to start negotiations with APFC (the French producers outside Quebec).

The benefits payable under both decisions have been increased.  For Teletoon they were increased from $24.9 million to $26.02 million to reflect leases and cash on hand.  For Historia and Séries+ the increase was from $13.86 million to $14.48 million to reflect cash on hand.  The one thing we can always count on is that the valuation will go up because the CRTC found one or more ways that the purchaser tried to reduce the benefits payable.

Most of the benefits proposed have been accepted.  What interesting is the additional requirements.  The self-administered benefits cannot be spent on production just for Corus properties (generally the benefit of self-administering benefits).  ‘Benefits should be used to create and acquire the best possible Canadian programming to be made available on whatever services Canadians choose.  As such, the benefits resulting from this transaction should be made available to a wide range of producers for broadcast on a variety of services so that they do not exclusively benefit the Teletoon services’.  [para 73.  The same line is in the Historia and Séries+ decision at para 72.]  Corus might as well give the money to the CMF or other independent funds if it can’t be run out of their commissioning department.  Combine this with the proposed benefits policy that has 80% of benefits going to independent funds and we have a clear signal of the impending death of the self-administered benefits fund.

Corus had proposed that 75% of production benefits would go to independent production.  This was of concern for many as Corus owns Nelvana and that 25% would therefore go to its own productions.  The CRTC agreed and Nelvana was cut out of benefits.  They will go 100% to independent production.   Yup, that’s definitely a piece of coal.

In the Bell-Astral decision we had what I believe was the first allocation of a portion of benefits to OLMCs.  Keeping in mind that the Chair of the CRTC and the Vice-Chair of Broadcasting both grew up in OLMC communities, it is not that surprising that there is a renewed interest in supporting OLMC communities.  [and I will add OLMC to the Acronym Decoder].  Both decisions require 10% of the programming benefits to go to OLMCs, consistent with the Bell-Astral decision.

There are two funds that still need to be finalized in both decisions, the Script and Concept Development Fund and the Export Fund.  Stakeholders had objected to the Export Fund as not being an onscreen benefit (Corus had been very vague in its application and at times described it both as a fund to promote programs internationally and as a way to help producers find international financing) but to ensure that it will be an onscreen benefit the CRTC has required that any funds will result in the production of new programs and that those programs are broadcast on a Canadian service.  Effectively it is a ‘foreign presale’ fund rather than an after market distribution fund.  Corus has until January 30, 2014 to file an agreement with either Telefilm or CMF for these two funds.  If Corus can’t come to an agreement with either Telefilm or CMF then the funds will go to the self-administered (but not for Corus’ benefit) funds.

The filter that benefits must be of a benefit to the entire broadcasting system has also been applied to the offscreen or social benefits.  Frequently in the past there have been tenuous connections between the recipients of social benefits and the broadcasting system (I remember an allocation to the Girl Guides of Canada that didn’t make much sense).  The CRTC is being very clear that Corus will have to report on how the funds were used to the benefit of the broadcasting system and hinted that a proper use would be script development, pitching events, professional development and the opportunities to meet OLMCs.  One social benefit, the Corus Inner City Childhood Obesity Research Initiative, was denied for not being clearly of benefit to the broadcasting system (and being very vaguely described in general).

There were a few changes to the licence terms of the Teletoon services that will be of interest.  Corus requested a CPE for Teletoon of 31% but the CRTC set it at 34% with an allocation of 9% specifically to French language programming to allay concerns that collapsing Teletoon into the Corus group could swamp French programming.  Teletoon’s PNI is set at 26% and Teletoon Retro’s at 4%.  That effectively increases Corus’ group PNI from 9% to 12%.  This is all good news so hopefully when the benefits expire Corus will still be spending healthy money on Canadian programming.

The CMPA had requested a condition of licence that Teletoon air 90 hours of Canadian programming as well as the expenditure requirement.  The CRTC did not approve it on the basis that they are leaning towards regulation that focuses on creation rather than exhibition in order to keep pace with changing audience behaviour and provide broadcasters with greater flexibility.  This was also a theme in the Group Licensing Policy, though that policy did not completely get rid of exhibition requirements.  What I find interesting though is that the Commission also denied Corus’ request to remove the requirement to air one hour of Canadian programming during prime time on Teletoon Retro.  That was on the basis that the Commission didn’t want Teletoon Retro to have a completely foreign prime time broadcast.  So exhibition requirements are still sometimes necessary.

There is more nitty gritty in the decisions but my holiday baking calls.  Happy holidays to you all!  Hopefully you can take a proper break and I will see you in the new year.