Archive

Archive for May, 2009

We Can All Learn Something from iTunes

May 29, 2009 Leave a comment

On Thursday (May 28, 2009), American networks like ABC, Fox, NBC and WB made 20 of their TV series available on the iTunes Canada store. Now Canadians can download favorites like Grey’s Anatomy, House and many more for $2.50 – $3.50 per ep. This is great news for Canada because U.S. based websites like ABC.com or Hulu.com are not allowed to serve their free video content to Canadians (as part of their contractual content distribution rights).

FACT: Canada has the highest online video penetration of the five countries comScore tracks (Canada 88%, France 82%, Germany 82%, U.K. 81%, U.S. 76%).

Think of the one or two early adopters you probably know who like to show off their media servers and web connected home theatre systems whenever you come over for a visit. I don’t think anyone can dispute the fact that we will, in the very near future begin to see mass acceptance of web enabled television. This is when viewers will actually be able to interact with broadcast and advertising content via the internet on a single screen, in the comfort of their living room. To put it all in context: You (yes you!) will be able to sit down in your living room, turn on your TV, visit the iTunes Canada store to download The Office in hi-def, store the episode on your hard drive and watch it whenever you are ready, in Dolby 5.1 surround sounds (of course). This is happening now and will acceptance will continue to accelerate.

I think that Canadian cable companies resisting broadcasters’ requests for ‘fee-for-carriage’ can learn a thing or two from iTunes and the inevitable world of web enabled television. In an industry where audiences are becoming increasingly empowered to get what they want, distributors have a responsibility to cooperate so that everyone wins. If ABC is able to cooperate with iTunes in terms of distributing Grey’s Anatomy, why isn’t it working for CTV and Shaw or Global and Videotron?

What do you think? Leave your comments here.

FEES FOR CARRIAGE WOULD BE “TAXATION”?

May 14, 2009 Leave a comment

 

EXCERPT FROM: FEES FOR CARRIAGE CAMPAIGN CONTINUES, MEDIACASTER MAGAZINE, MAY 12, 2009.  

“Fee for carriage would set up the worst of all public policy solutions, a two tier taxation system. Those who subscribe to cable or satellite would pay more, a lot more, while those who receive television via rabbit ears or a roof-top antenna, would pay no consumer tax, and continue to receive free over-the-air local television. Such a system would be patently unfair,” said Lind. [Phil Lind, Vice Chairman of Rogers Communications Inc.]

If the government were collecting the fees received by broadcasters for carriage I would agree with Mr. Lind but this is not the case. Fee for carriage is a producer’s (in this case a broadcaster) right to charge for a product they produce. It’s not taxation, it’s not a penalty, this is the functioning of a free market’s industry.

What do you think? Do you consider fees for carriage (TV fees paid by subcribers) a “tax”?

BR

Categories: Uncategorized

Who Wants to Pay for Something that’s Free?

May 4, 2009 Leave a comment

Critical move by M2 Universal (one of Canada’s largest media planning companies) to explore the fee for carriage issue facing the Cdn television industry.

“According to M2’s April 2009 online survey of 1,000 Canadians, 42% said they would cancel their conventional channels rather than pay any more for them”  (http://www.mediaincanada.com/articles/mic/20090505/feeforcarriage.html)

 Of course consumers would have this reaction when asked to pay for something they’ve been getting for free for so long. What I feel is missing here is the reaction that respondents would have when asked if they would SHARE in the costs for Cdn programming (i.e. local news) with the DISTRIBUTORS of television in Canada.

Cable and satellite service providers like Bell, Rogers and Videotron are those distributors – they (like many industries) take a product, package it and serve it up to consumers for profit. But in the case of Canadian television, cable and satellite distributors have been given a free pass that has protected them from having to pay for the Canadian programming like CTV and Global that they distribute to paying customers. They also can choose to carry or not carry local stations at their discretion (i.e. Montrealers on Bell do not have access to Global Quebec)

Let’s look at this from a different industry’s POV – the sale iPods (in Canada, not that it matters). Apple produces iPods and sells them to retailers like Best Buy. So what happens if Apple goes through a rough patch, profits dip and production costs eat up more of the company’s sales revenue? Apple would then have to raise the price that it sells iPods to distributors like Best Buy. And we all know what Best Buy would do – raise shelf prices in a way that would aim to achieve maximum profit by balancing price and promotion. That’s marketing 101.

Now ask iPod owners if they would be willing to pay $25 more than the same iPod they bought a month ago. The answer would be “NO”. This is exactly the problem that the Canadian broadcasters, cable / satellite service providers and TV viewers in Canada are in. And to make the situation even more tense, cable service providers have sworn to pass on any fees for carriage directly on to the end-consumer… this from the distributing industry that just LAST MONTH reported double digit revenue growth.

What do you think? Do Canadian broadcasters like CTV and Global should have the right to charge service providers like Bell and Videotron for Canadian television? And what should these distributors do in terms of subscription prices?