New cable unbundling will hurt Canadian TV production, predicts new report

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Changes to the way Canadians get their TV channels, including the limited unbundling of cable packages, will be financially devastating to the domestic programming industry and cost 15,000 jobs during the next five years, predicts a report to be released Tuesday.

The changes, adopted last year by the Canadian-radio Television and Telecommunications Commission (CRTC), are due to take effect in March.

The new report was prepared for Friends of Canadian Broadcasting, the actors’ union ACTRA, the Directors Guild of Canada and the unions Unifor and the Canadian Media Guild.

According to Friends spokesperson Ian Morrison, the “independent economic forecast” is an indictment of the policies in the CRTC’s Let’s Talk TV announcements and a direct result of pressure from the former Conservative government.

“Under pressure from the former government, the Commission placed so-called consumer protection ahead of the cultural and democratic interests of citizens and creators,” he said.

The study predicts that the domestic production industry will be taking a $400-million-a-year hit by 2020, partly because of the unbundling policy.

The study’s analysis is basically this:

Cable and satellite providers must now provide consumers with a $25 basic monthly “skinny” bundle of fixed channels as an entry package. Many of the channels in that package will be mostly Canadian public affairs channels.

Consumers can then add whatever cable offerings they choose and pay for each additional channel, or package of channels, individually at whatever fees the providers decide to charge.

The new report figures that, although the $25 package is more or less half the cost of current basic cable, consumers will add mostly specialty channels before reaching a spending saturation point.

They will then spend the rest of their cash on Internet-based streaming services such as Crave (owned by Bell) and Shomi (owned by Rogers and Shaw), both now in fierce competition with Netflix, which has no Canadian staff.

Canadian broadcasters, cable and satellite providers are required to spend a percentage of their revenue funding Canadian programs. Rogers, for example, pays five per cent of its revenue to the Canadian Media Fund that creates original Canadian programming.

But Internet service providers — Bell, Rogers, Shaw etc. — are not required to contribute to those Canadian production funds on their Internet-related businesses.

As viewers migrate from conventional TV to the Internet, those funds will dramatically deplete, the study says.

Currently, all cable packages must include Canadian channels. Under the new regulations, that requirement becomes an option.

That is significant because when a consumer subscribes to a package, each channel in that package gets a cut.

The five organizations that commissioned the study say there are no guarantees that Canadians will be paying less under the new system and are calling on the federal government to review what they say is a policy developed without considering the economic impact on the Canadian production industry.

ccobb@ottawacitizen.com

twitter.com/chrisicobb





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