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Front Page, Industry News
Streaming service taken to CRTC for fee ruling
Monday April 18th 2011TORONTO - Canada’s leading television companies are taking aim at Netflix Inc. and other online streaming services, attempting to drag the fast-growing competitive threat to the TV business into the same regulations they are beholden to.
Senior executives at Astral Media Inc. said documents have been filed with regulators seeking a review of the California streaming service’s ability to legally operate in Canada without paying a cent on broadcast licences and subsidy funds that finance the production of domestic content.
Netflix’s impressive growth here threatens to be slowed if the Canadian Radio-television and Telecommunications Commission levels new fees on it, adding to the company’s costs that would perhaps spill over onto its customers.
Bogged down with new regulatory requirements, the firm’s zeal to go after new content rights for its Canadian library may also wither.
Moreover, the outcome of a formal review is sure to establish precedents for the treatment of all future online, or so-called over-the-top, distributors looking to introduce streaming services in Canada.
“The objective from an industry point of view is to maintain a level playing field,” Astral chairman André Bureau said on a conference call.
He said the current network of CRTC-mandated fees and regulations for television broadcasters and distributors -a system such online firms as Netflix now bypass -was “very positive” for the development of national culture, identity and the economy.
“And we’re trying to have the regulator look at this from the same point of view,” Mr. Bureau said.
Montreal-based Astral, which operates 18 specialty and pay TV channels including HBO Canada and Family channel, has jointly filed a request to the regulatory commissioners with other sector players, including Corus Entertainment Inc., the owner of 17 pay and specialty channels.
John Cassaday, Torontobased Corus’s chief executive, said Thursday that Netflix and other over-the-top providers do not pose a significant threat to its business, and will not for some time. “Are we responding to this? Yes,” he said. “Do we think it’s life-threatening? No.”
But the request, made April 1, suggests industry stakeholders are indeed concerned.
Netflix, which launched services in Canada last fall offering a library of older TV shows and movies for $7.99 a month, hopes to top one million subscribers by the summer, chief executive Reed Hastings said in a recent interview with the Financial Post.
A base of that size would generate $96-million in yearly revenues, on par with what pay channels such as The Movie Network owned by Astral and Movie Central owned by Corus generate, a factor suggesting the Los Gatos, Calif.-based Netflix can handily compete for content rights with domestic premium channels.
It has already. In March, the online distributor upped the threat level to traditional players by winning the rights to new Paramount Pictures releases in the pay-television window. Both Canadian television operators were in the bidding.
The April 1 request was made via a letter from the Canadian Media Production Association, which has established a special committee with other industry members chaired by Alain Gourd to investigate the financial and cultural impact of “OTT” players on the market.
When reached for comment, a spokesman for the CRTC said the unorthodox request was under review with no decision made on whether the commission, which has been hesitant to wade into regulation of the Internet but is sensitive to culture-related issues, will oblige.
Source: Montreal Gazette
Front Page, Industry News
Streaming service taken to CRTC for fee ruling
Monday April 18th 2011TORONTO - Canada’s leading television companies are taking aim at Netflix Inc. and other online streaming services, attempting to drag the fast-growing competitive threat to the TV business into the same regulations they are beholden to.
Senior executives at Astral Media Inc. said documents have been filed with regulators seeking a review of the California streaming service’s ability to legally operate in Canada without paying a cent on broadcast licences and subsidy funds that finance the production of domestic content.
Netflix’s impressive growth here threatens to be slowed if the Canadian Radio-television and Telecommunications Commission levels new fees on it, adding to the company’s costs that would perhaps spill over onto its customers.
Bogged down with new regulatory requirements, the firm’s zeal to go after new content rights for its Canadian library may also wither.
Moreover, the outcome of a formal review is sure to establish precedents for the treatment of all future online, or so-called over-the-top, distributors looking to introduce streaming services in Canada.
“The objective from an industry point of view is to maintain a level playing field,” Astral chairman André Bureau said on a conference call.
He said the current network of CRTC-mandated fees and regulations for television broadcasters and distributors -a system such online firms as Netflix now bypass -was “very positive” for the development of national culture, identity and the economy.
“And we’re trying to have the regulator look at this from the same point of view,” Mr. Bureau said.
Montreal-based Astral, which operates 18 specialty and pay TV channels including HBO Canada and Family channel, has jointly filed a request to the regulatory commissioners with other sector players, including Corus Entertainment Inc., the owner of 17 pay and specialty channels.
John Cassaday, Torontobased Corus’s chief executive, said Thursday that Netflix and other over-the-top providers do not pose a significant threat to its business, and will not for some time. “Are we responding to this? Yes,” he said. “Do we think it’s life-threatening? No.”
But the request, made April 1, suggests industry stakeholders are indeed concerned.
Netflix, which launched services in Canada last fall offering a library of older TV shows and movies for $7.99 a month, hopes to top one million subscribers by the summer, chief executive Reed Hastings said in a recent interview with the Financial Post.
A base of that size would generate $96-million in yearly revenues, on par with what pay channels such as The Movie Network owned by Astral and Movie Central owned by Corus generate, a factor suggesting the Los Gatos, Calif.-based Netflix can handily compete for content rights with domestic premium channels.
It has already. In March, the online distributor upped the threat level to traditional players by winning the rights to new Paramount Pictures releases in the pay-television window. Both Canadian television operators were in the bidding.
The April 1 request was made via a letter from the Canadian Media Production Association, which has established a special committee with other industry members chaired by Alain Gourd to investigate the financial and cultural impact of “OTT” players on the market.
When reached for comment, a spokesman for the CRTC said the unorthodox request was under review with no decision made on whether the commission, which has been hesitant to wade into regulation of the Internet but is sensitive to culture-related issues, will oblige.
Source: Montreal Gazette
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Front Page, Industry News
Streaming service taken to CRTC for fee ruling
Monday April 18th 2011TORONTO - Canada’s leading television companies are taking aim at Netflix Inc. and other online streaming services, attempting to drag the fast-growing competitive threat to the TV business into the same regulations they are beholden to.
Senior executives at Astral Media Inc. said documents have been filed with regulators seeking a review of the California streaming service’s ability to legally operate in Canada without paying a cent on broadcast licences and subsidy funds that finance the production of domestic content.
Netflix’s impressive growth here threatens to be slowed if the Canadian Radio-television and Telecommunications Commission levels new fees on it, adding to the company’s costs that would perhaps spill over onto its customers.
Bogged down with new regulatory requirements, the firm’s zeal to go after new content rights for its Canadian library may also wither.
Moreover, the outcome of a formal review is sure to establish precedents for the treatment of all future online, or so-called over-the-top, distributors looking to introduce streaming services in Canada.
“The objective from an industry point of view is to maintain a level playing field,” Astral chairman André Bureau said on a conference call.
He said the current network of CRTC-mandated fees and regulations for television broadcasters and distributors -a system such online firms as Netflix now bypass -was “very positive” for the development of national culture, identity and the economy.
“And we’re trying to have the regulator look at this from the same point of view,” Mr. Bureau said.
Montreal-based Astral, which operates 18 specialty and pay TV channels including HBO Canada and Family channel, has jointly filed a request to the regulatory commissioners with other sector players, including Corus Entertainment Inc., the owner of 17 pay and specialty channels.
John Cassaday, Torontobased Corus’s chief executive, said Thursday that Netflix and other over-the-top providers do not pose a significant threat to its business, and will not for some time. “Are we responding to this? Yes,” he said. “Do we think it’s life-threatening? No.”
But the request, made April 1, suggests industry stakeholders are indeed concerned.
Netflix, which launched services in Canada last fall offering a library of older TV shows and movies for $7.99 a month, hopes to top one million subscribers by the summer, chief executive Reed Hastings said in a recent interview with the Financial Post.
A base of that size would generate $96-million in yearly revenues, on par with what pay channels such as The Movie Network owned by Astral and Movie Central owned by Corus generate, a factor suggesting the Los Gatos, Calif.-based Netflix can handily compete for content rights with domestic premium channels.
It has already. In March, the online distributor upped the threat level to traditional players by winning the rights to new Paramount Pictures releases in the pay-television window. Both Canadian television operators were in the bidding.
The April 1 request was made via a letter from the Canadian Media Production Association, which has established a special committee with other industry members chaired by Alain Gourd to investigate the financial and cultural impact of “OTT” players on the market.
When reached for comment, a spokesman for the CRTC said the unorthodox request was under review with no decision made on whether the commission, which has been hesitant to wade into regulation of the Internet but is sensitive to culture-related issues, will oblige.
Source: Montreal Gazette
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