GATINEAU – It took more than a few hours but some sparks did fly at the CRTC’s flexible channel packaging hearing on Wednesday when commissioner Christopher MacDonald (right) questioned Bell on the timing of a company press release a day earlier which promised the company would offer Fibe TV service separate from its internet offering.
Cynics might have highlighted the coincidence of a Bell announcement, the day before the hearing kicked off, he noted, asking Bell “why now” when only four months ago the company suggested it was a monumental task to make a basic Fibe TV offering available without an attached Internet service. Fibe is an IP-delivered service and requires a broadband connection at least.
“The delinking of the Internet subscription from the TV subscription is really part of an ongoing alignment of the features of our service across our footprint,” said Robert Malcolmson, senior VP of regulatory affairs at BCE. “It is internally a substantive operational change.”
Shawn Omstead, VP of products and services at the firm, added that the technical overhaul involved everything from billing, to tracking Internet usage and even rate setting for the new standalone TV service. As well, major IT work only comes around so often – “not frequent in nature” is the way he described it – and it just so happened to coincide to get this done.
“We have to, along with all the other priorities of our business, slot in at the right time when we can make those changes,”he said. “So I’d say over the last four months we’ve figure out how to make those changes, we’ve now prioritized those changes and we will make those changes by the end of Q1 2017.”
One of the main themes to emerge from testimony of the country’s major broadcast distributors at the CRTC’s hearing into flexible channel packaging on Wednesday was that while it should be simple for consumers to understand, it’s implementation can’t help but be complicated.
Quebecor Media, which has had several years experience in offering a small basic service, pick and pay and small channel packages, noted that succeeding with this type of offering requires simplicity when communicating offers to customers. Manon Brouillette, president and CEO at Vidéotron, noted that it’s best to offer something easy to understand or else there’s a risk of overwhelming the consumer.
She added though that the challenge is to balance the need to give consumers the choice they want but also ensuring the broadcasting ecosystem remains viable.
“No, we’re not that company, whoever they are.” – David Watt, Rogers Communications
It emerged during consultations with consumers that some felt the BDUs were less than willing to promote the entry level package and even some were perhaps instructing their customer service representatives (CSRs) to steer people away from skinny basic.
“No, we’re not that company, whoever they are,” replied David Watts, senior VP of regulatory at Rogers Communications to a question from commissioner Stephen Simpson.
Part of the confusion around this issue might simply be the fact that CSRs are actively trying to determine the best package for customers. As John Medline, director of video programming at Rogers, said it comes down to figuring out the right package for the household. “Maybe part of the confusion though is that when we do have conversations with our customers, whether it’s in store, on the phone or in a live chat, right-sizing for the household is a key part of that conversation,” he explained.
“If they’ve got kids in the household and sports fans, of course they can go Starter plus theme packs but it may not be the best value or the best value per channel that they’re getting in the household. So I think maybe some of that is leading to some of the confusion out there,” he added.
Making matters worse is that BDUs have myriad legacy packages which they don’t want to force happy customers to give up. Why not offer incentives to get them to switch to the new packages, asked CRTC chair Jean-Pierre Blais.
Rogers’ senior VP of content Melani Griffith said Rogers does that and is trying to be enticing with its TV Everywhere at no cost offer and giving customers the ability to add a single channel to their chosen package at no additional charge. “We try very hard to maintain our grandfathered packages,” she said. “But we’re doing our best with apples and honey rather than a stick to get people to come over.”
Throughout the hearing on Wednesday, the Commission questioned the BDUs on their plans for full pick and pay beginning on December 1. It wondered how the companies were going to price channels on a standalone basis compared to being in packages. All firms said it’s difficult to determine pricing at the moment because discussions are still ongoing with the content owners.
“We will make less money in a limited TV pick and pay world than we’ll make in our current packaging.” Jay Mehr, Shaw Communications
Jay Mehr, president of Shaw Communications, noted though that standalone channel prices won’t be exorbitant.
“There is a markup for sure. We will make less money in a limited TV pick and pay world than we’ll make in our current packaging,” he said, adding that it may be an order of magnitude of an 80% penetration rate. “It won’t be three times a standalone rate, it’ll be significantly less than that. So the rates, we’re doing the best we can to negotiate the best standalone rates possible.”
Mehr tried to assure the Commission that BDUs aren’t going to get rich from standalone channels. “If anyone is concerned that distributors are going to get rich on the markup of individual standalone services, I don’t think there’s any risk of that.”
The hearing continues tomorrow with interventions from consumers as well as replies from the major broadcast distributors.
The hearing audio can be streamed on the CRTC’s home page or can be viewed via CPAC.ca, from which we screen-capped our photo.
