Steve Faguy
MONTREAL and GATINEAU – Less than a week after it launched, Vidéotron's answer to Netflix is under attack from a competitor.
Astral Media filed a complaint this week with the CRTC alleging that the Quebecor-owned cable company's subscription video on demand service called Illico Club Unlimited competes directly with Astral's French-language pay TV movie channel Super Écran, and that the Commission should order Videotron to stop.
Quebecor responded to Astral's complaint before it was even published by the CRTC, issuing a press release on Friday morning and publishing an opinion piece written by Quebecor CEO Pierre Karl Péladeau in his newspapers Journal de Montréal and Journal de Québec.
Illico Club Unlimited, available throughout Quebec and Ontario to Vidéotron subscribers and non-subscribers alike, bills itself as a competitor to unregulated over-the-top services like Netflix. For $9.99 a month, subscribers can view an unlimited amount of a large catalog of French-language series and films, through their computer, an Android tablet app or via its TV video-on-demand channel (which avoids using any Internet bandwidth). The service launched with hundreds of movies and about 20 television series, all of which are available in French and about 10% also available in English.
Astral argues in its submission that because Vidéotron offers the service through its VOD channel, it is a VOD service regulated by the CRTC – and because its content is mainly movies, it makes it the type of programming found on a general-interest pay TV channel such as Astral's Super Écran. Because Super Écran is a Category A pay TV channel, it benefits from genre protection, so other services including video-on-demand services (other than its own) can't compete with it directly.
The commission opened the door to competition in French-language general-interest pay TV in 2010, but after getting no applications for other services, closed the door again and maintained Super Écran's genre protection in 2011. Astral is requesting that the commission order Videotron to cease distributing the service through its VOD system.
http://crtc.gc.ca/eng/archive/2011/2011-683.htm
"It is imperative to act rapidly because the Illico Club Unlimited service offered through the regulated Videotron video on demand platform will cause irreparable harm to the pay TV service Super Écran, which directly competes with it," Astral's regulatory affairs vice-president Nathalie Dorval writes in her submission. Astral also worries that other television distributors could launch similar services if the CRTC doesn't step in.
Péladeau, in his opinion piece, said Quebecor was "taken aback" by Astral's complaint. "Astral's attempt to deprive consumers of a new homegrown service tailored to their needs is all the more incomprehensible at a time when American services like Netflix and organizations like Apple TV are knocking at our media doors and attracting growing interest from viewers."
Péladeau and Vidéotron CEO Robert Dépatie accused Astral of wanting to "unduly extend its 30-year pay TV monopoly." Péladeau also suggested Astral was being hypocritical, pointing out that Bell Canada proposed to create a similar service when it asked the CRTC to approve its purchase of Astral last year.
Beyond the grandstanding, Vidéotron argues that Illico Club Unlimited does not compete directly with Super Écran simply because it doesn't air the same programming. Because films become available to Illico only after the pay TV window, Videotron argues that its service is instead competitive with services like Cinépop and Prise 2, which are Category B services and don't have genre protection.
The Commission has agreed to deal with this complaint on an expedited basis. A response from Videotron and comments from interveners are due March 18, and a reply from Astral by March 25.
Astral officials declined to comment on Quebecor’s public statements.
