Zip.ca to bring legal movie streaming to Canada this fall; internet throttling remains an issue

An Ottawa company has unveiled plans to bring the first large-scale movie download service to Canada. Its announcement on Friday comes just days before a CRTC hearing begins into internet throttling and other bandwidth management practices. Company executives are preparing to make their case before the commission July 7. With access to over 72,000 DVD titles, Zip.ca is Canada’s equivalent to the U.S online video rental giant Netflix. , a popular US online video rental giant that began offering streaming video to its over eight million US customers early in 2008 via a set top box. Apple TV, Microsoft’s Xbox Life and Amazon also offer internet streaming/download rentals to US consumers. According to a PricewaterhouseCoopers Global Media Entertainment Outlook report, downloads in the US are expected to increase from 100,000 in 2005 to 100 million by 2010. Here in Canada, Zip.ca currently relies on Canada Post to deliver movie disks to its more than 37,000 Canadian subscribers. But that changes this fall when the company plans to make thousands of movie titles and TV episodes available for downloading and streaming to PCs and mobile devices. Zip.ca says it is exploring a number of models for its digital service including al a carte rentals and purchases as well as subscription-based options. Legal movie streaming and downloading is still in its infancy in Canada, and its ultimate success could depend on outcome of the CRTC’s public hearing into of Internet traffic management practices, which begins July 6 in Gatineau QC. Zip.ca executives are scheduled to appear before the panel July 7. In its written response to Broadcasting PN CRTC 2008-09, Zip.ca chair Robert Hall urged the CRTC to ensure that ISPs don’t get a free hand in throttling the Internet to the detriment of competitors. “...we are concerned that if the Internet Service Providers are allowed to operate unchecked or unmonitored that the practice of traffic shaping will extend to other Internet usages, such as video downloading, that the ISPs don’t agree with, that they will employ these technological practices for economic or commercial advantage over competitors and/or consumers,” writes Hall. Zip.ca CEO Curt Millar echoes Hall’s comments, noting that his company will not let up in the fight against Internet traffic shaping policies that are threatening the growth and competitiveness of Canada’s nascent video downloading industry, which Zip.ca predicts will likely become one of the country’s “single largest growth sectors”. “We will continue to lobby, propose, and work with CRTC for them to understand that throttling and the ISPs shaping bandwidth to their advantage, to the detriment of competitors, is not in the best interest of Canadians,” he tells Tech Media Reports. Hollywood movies will dominate offerings Zip’ca’s new digital movie service is set to kick off with offerings of the latest Hollywood movies. Although the move raises concerns about the amount and availability of Canadian content, Millar says it’s all driven by customer demand. “The reason we focused on specifying Hollywood is one of the things our customers have asked us about,” he says. But he reiterated that all efforts will be taken to ensure that Canadian content is available, although the process will depend on how flexible rights owners will be with having their content on the online streaming service. “Our goal would be to have available on site every Canadian movie that the people who own the rights are willing to make available on the service because at the end of the day whoever owns the rights has to be comfortable with what we are doing and how we are doing it,” he says, adding that negotiations have already started with some rights owners. “But comparatively, more movies are produced from Hollywood. I don’t know the exact number but they produce a hundred movies for every Canadian movie that comes out. So comparatively, there will be more stuff out of Hollywood just because there’s more volume coming out of Hollywood.” Marketing the new service to potential customers has already started, Millar says. The process is two-pronged: reliance on existing customers who already subscribe to Zip.ca’s movie rental service, and non-subscribers who regularly visit the company’s site and have opted to join an emailing list for a newsletter. Millar also says online marketing will also occur on websites, through banner ads and limited advertising on radio. As he anticipates launching the online video streaming service, Millar concedes that dividends might take a couple of years to realize, noting that Zip.ca’s DVD rental service, which offers more than 72,000 titles, will still be the main revenue source for the company. Zip.ca is offering the service in partnership Novato CA-based Roxio CinemaNow, a VOD service owned by digital media software company Sonic Solutions. Sonic works with major consumer electronics manufacturers to ensure that products are compatible and interoperable with Internet devices such as computers, set-top DVRs, Blueray Disk and other mobile gadgets. Millar says the deal will ensure seamless interoperability and access to Hollywood movies.

Zip.ca to bring legal movie streaming to Canada this fall; internet throttling remains an issue

News | 06/28/2009 4:00 pm EDT

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