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Bell Pours Cold Water On Canada's Quest for A La Carte TV
by Karl Bode 02:23PM Friday Nov 29 2013 Tipped by elwoodblues See Profile
Canadian Heritage Minister Shelley Glover recently made waves by promising that government would be urging Canadian regulators the CRTC to push Canadian Pay TV providers toward offering a la carte TV programming. Like in the States, Canadian consumers desire greater flexibility in the prices and programming lineups they're offered. What they get instead is an endless stream of excuses why none of this can happen, followed by another rate hike.

Not too surprisingly, Bell isn't a particular fan of the government's latest pet project. Bell Media President Kevin Crull last week threatened that there would be "unintended consequences" if the Canadian government carries through on the effort:
quote:
"As we move forward in responding to consumers, we need to be clear that there is an inherent risk. When buying less, the unit cost is going to be higher and overall savings, if any, may be small. As well, variety and quality could decline – maybe dramatically...we are all working hard to find balanced ways to provide flexible options for consumers. So consumers can make the choice – pay a higher unit costs for fewer channels or pay a little bit more and get way more channels."
Except users aren't paying a "little bit more," they're paying an arm and a leg already, and rates continue to soar with no end in sight. The argument has always been that unbundling will kill off niche channels, though it should be noted that most cable operators in the U.S. and Canada fight greater consumer selection of any kind -- quite simply because the end result if done correctly would be users personally crafting a lower monthly bill.

Meanwhile, as cable companies and broadcasters become more vertically integrated (Comcast/NBC, Shaw/Shaw Media), the incentive to unbundle channels become less and less. The end result is more than a decade of talking about more flexible TV channel pricing options with nothing much to show for it.

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Probitas

@teksavvy.com

1 recommendation

They may not like it

but they may end up having no choice. Cord cutting is just as real in Canada as it is in the US. For instance, I took a low end signup for 2 years at $53 a month after tax for some basic channels, though the price increases at the end of the first year. Early termination is $200. I've decided that if the programming doesn't get better (and I'm taking low brow shows that appeal to the masses, like Survivor, and other nitwit programming that seem to dominate) I'll pay the $200 and avoid paying for the year. I saved money then.

And Bell will not be enticing me back. I already get DSL through a third party, so have no need of them beyond the fact that they are already paid for the line rental and still make money regardless of where the customer gets service from. That's the thing that really bothers me. They lose a mass of customers and their response is to jack rates, not try to provide better service. Let's face it, lower prices will draw in more customers, but apparently the old guard running Bell has a 1950's outlook on pricing: make them pay, and if it's not enough, make whoever is left pay even more. And even they won't upgrade some areas because the cost benefit to them isn't there, but they have no problem making everyone pay for expansion into rich areas and new builds, subsidizing those costs on the backs of people they have no intention of providing better services to, similar to US providers.

If they drive people away, the people who stand to lose the most are broadcasters and internet retailers, as people decide that the great internet experiment has been co-opted by corporate interests and goverment stooges, and quietly cancel their services completely.

When did providing services turn into 'gouge them for all they are worth'?
dra6o0n

join:2011-08-15
Mississauga, ON

Re: They may not like it

If you are smart and has a good internet rather than TV, you can 'access' any channels or episodes that you would have to exclusively pay.

That or you go to your favorite pub to see your sports channels, etc. Sort of thing.
modemport

join:2013-08-26
Montreal, QC
Reviews:
·TekSavvy DSL

Re: They may not like it

lol

I had tv cable via Videotron. Paid for the basic package. One day I'm noticing I have more channels. A tech accidentally switched me to the second tier. Had the two tiers for 8 yrs or so. Was never billed, they never caught on.

There wasn't much I was watching so I decided to run an hdmi cable from the pc to the tv and cancelled Videotron.

A high price in tv cable is the cost of sports.
I never watch sports.

Now I download everything. Most of what I watch isn't even available here. A few shows, like True Blood, had a one year time delay. Now I watch it one hour after it's aired.

There was only one show I couldn't find, and I found it last week. Caught up on all the episodes I hadn't seen.

Providers are adamant about not providing viewers what they would prefer because they would lose money. Take away sports, and that's a significant chop in their revenue streams. Let people pay only for channels they want, and that's another chop.

In the unlikely event one day we can pay for only channels we want, there won't be any difference in the monthly bill. Providers will say whatever they have to, to make sure they don't lose a penny.

Most of the channels I had, I never watched. I'm forced to take French channels - never watched any of them. The 24hr news channels - wtf? I read the news.

With 300gb via my isp in consumption, I rarely use more than half.
zod5000

join:2003-10-21
Victoria, BC
Reviews:
·Shaw

I'm not sure how its going to pan out.....

I'm curious as to how a la carte would really pan out. I don't disagree with Bell. As packages are bundled people are subsidizing each others tastes. It seems to me in a bundle of 6 channels you might watch 1 or 2. If you have a larger package you may not watching something sports.

If they go a la carte their subscriber count goes down so they need to charge more (even for popular channels) to keep their profits at the same level.

I guess the question is, how much can they charge for individual channel before people don't want it. My guess is that it's less than what bell thinks it is.

If that's the case then revenues go down for the TV channel operators because they can't recoup the losses from lower subscribers.

Alternately people might pay whatever the cost, so they end up getting less for more.

Both arguments are valid and i'm not sure how it'll pan out.
Joe12345678

join:2003-07-22
Des Plaines, IL

1 recommendation

Re: I'm not sure how its going to pan out.....

they need to put the sports channels into there own pack.

They are the real drivers of high costs.
zod5000

join:2003-10-21
Victoria, BC
Reviews:
·Shaw

Re: I'm not sure how its going to pan out.....

They sort of do. My cableco offers a pack that includes most HD channels or you can buy small packs (6ish channels). By the time you get up to a few packs it the same as buying them all....

I guess it depends on your cableco. Won't really need TSN anymore either since Sportsnet is getting all the hockey.
Joe12345678

join:2003-07-22
Des Plaines, IL

Re: I'm not sure how its going to pan out.....

TSN still has some regional rights
dra6o0n

join:2011-08-15
Mississauga, ON
The thing is that they 'have to keep their profits'.
But the solution is to have them 'cut the fat' out of the expenses too!

It's not about making the same amount of money on a more efficient method, it's about BALANCE BALANCE BALANCE!
zoid

join:2012-09-05

But Bell in QC

Bell just want more money, in the little more competitive market of Quebec, Bell has no problem to offer a la carte channels. They do it or their own because the cable competitor offer it. Bell: how to lie to everyone.
zod5000

join:2003-10-21
Victoria, BC
Reviews:
·Shaw

Re: But Bell in QC

I think the economics of it are more complicated than that. Because of bundles they can charge say $2/head to a million people even if only 200,000 people watch the channel. If the channel goes a la carte and only the 200,000 people want it.. then the channel would need to charge $8/head to keep the same amount of money to come in.

I don't think its all that black and white how a la carte would have an impact.

I would hope no one would pay $8/channel. That they would have no choice but to charge less, which would give them power to negotiate better deals with the tv channel owners, which would drive down carriage fees, which would make things cheaper.

I don't see it happening though. I see the popular channels getting more expensive (so they can earn the same revenues) and the unpopular channels failing and going away.
Joe12345678

join:2003-07-22
Des Plaines, IL

Re: But Bell in QC

HBO and others like are $8+. More like $15-$18

The ESPN channels are pushing $8.

Local sports channels $3-$5

other channels are under $0.25

Make Disney go back to being premium.

Make it so you can buy your local RSN channels on there own or at least not be forced to buy ESPN (some starred as PAY UHF channels and where pay add on channels where cable stated)

ESPN needs to be like HBO where you can pay say $10 MO to get it.
zod5000

join:2003-10-21
Victoria, BC
Reviews:
·Shaw

Re: But Bell in QC

I would agree with that. Channels like HBO don't play commercials and have premium content (ie high quality shows) so they can demand a premium.

Live Sports is still best done on TV (I could complain about my attempt to use gamdcenter live all day).

Channels like AMC could probably charge a few bux too because they make high quality shows.

After that I can't see people paying that much for CDN/US networks (which is moot because I think there will still be a basic package).

perrrob

join:2011-11-29
Gatineau, QC
Exactly, I've been with Videotron for years and they have provided à la carte for quite a while now. Bell was forced to offer the same so that they could compete in Quebec.

If it wasn't for à la carte, I would have flushed all channels except Basic (no choice here either) a long time ago.

Bell is lying to you in order to pad their pocket. A lot of useless channels need to disappear anyway ... how many similar channels do we need in order to show Pawn Star, Pickers, Ice Road Truckers or other junk like that?

Wake up or they'll continue to take advantage of you.
MaynardKrebs
Heave Steve, for the good of the country
Premium
join:2009-06-17
kudos:4

No business/channel has a 'right' to survive

Just because Bell is in business and owns the wires & many of the content streams (channels), this alone does NOT mean that many of those channels, nor Bell, have an absolute right to survive. So what if Bell spent billions on acquiring content - tough shit for them if their Board of Directors made a bad call in buying that content in the face of pressure to offer a la carte and realize reduced revenues.

The same applies to other channels not owned by Bell - there's no inherent right to survive for them either. If a la carte kills them off, so be it.

However, there are some channels which ought to be mandatory carriage and I've written about this before »Re: CRTC sez: Broadcasting as we know it will never be the same

And while the CRTC is at it, they MUST ban 'tied selling' too
»No tied selling

ChuckcZar

@teksavvy.com

Bell Pours Cold Water On Canada's Quest for A La Carte TV

Yet this May Bell will be charging for TSN2 HD as a separate channel for Rogers subscribers. So Rogers subscribers will have to pay more for a channel in HD they were already paying for.
koreyb
Open the Canadian Market NOW

join:2005-01-08
East York, ON
Reviews:
·VMedia
·Rogers Hi-Speed

what a joke

Easy solution.. If no cable/iptv/dish provider agrees to the hiked rates, then they don't get on their system. Would Bell really risk having all channels pulled from say rogers just because they want more money? Some of these channels will die.. some need to anyhow as they are poor and low based viewership. If they try to hike say TSN over this which should not be part of basic cable anyhow.. nor should rogers sportsnet big deal.. if people don't pay the fee, the channel dies. It's simple as that.
dutenhnj

join:2002-01-29
Monroe, WI

1 recommendation

Go ahead and kill the niche channels.

When the executives argue "But it will kill niche channels!" I always immediately question why exactly that is a bad thing... I for one think the bundles could use a few less of [insert someone's, but not necessarily your favorite color here] paint drying channels. Some of which are so boring and stale they have started to crack, chip and flake off showing the cheap cardboard prop stand underneath.

If there is demand for the programming it can probably survive or even thrive by moving to on-demand internet streaming only. We might even see less terrible programming because it won't all be subsidized by the one good program on in the whole forced channel bundle (although I wouldn't get my hopes up).
biochemistry
Premium
join:2003-05-09
92361

A La Carte

A la carte would bring prices down if the consumer pays actual channel cost plus a set percentage to the cable company. If you have a choice between two channels with similar programming but notice that one channel is quite a bit cheaper, you probably go with that channel. If one channel is nothing but reality and the other has quality scripted programming, maybe you are willing to pay a bit more. ESPN charging $15 a month and showing nothing but commercials? Maybe you dump it and go with Fox Sports One. Next time ESPN thinks twice about paying 50 gazillion dollars for NFL games and prices come down.
--
Unicorns! Show ponies! Where's the beef?!
NefCanuck

join:2007-06-26
Mississauga, ON
Reviews:
·voip.ms

Bell is as Bell does

Bell is merely parroting the line that anyone who owns multiple sources of content and the distribution network for that content *has* to.

I mean why would they admit that there are too many channels when they themselves are the source of the problem? Look at how many channels Bell owns and then check out how many of those channels end up showing the exact same content at different times

It's why I cut the cable, why pay to watch the same thing on three different channels?

Nevermind the fact that I resent paying for channels I will never watch, nor do I want my money supporting them.

NefCanuck
DanteX

join:2010-09-09
kudos:1

How many channels of he same crap?

How many different channels do we need that shows the same exact content among every channel? What value to the customer is there if there is no variety?

If the channels provide content of value it will survive a la cart if it provides no value then they deserve to die.

How many channels of reality shows do we need or ththe same channels showing the smae shows?

How many marathons of a select few number of shows do we need on channels such as DejaView?

bthornhill

join:2004-05-10

Bring it

Cut the cord five years ago in Canada....was paying $125 month, so my savings are over $7000. Replaced it with an HD antenna ($700 installed professionally) and get everything else thru AppleTV. I watch everything I want and can even get programming thru Apple I couldn't get thru cable. And I save THOUSANDS.