Shaw calls for further deregulation of video-on-demand to compete with OTT

Shaw Communications Inc. is calling on the CRTC to deregulate video-on-demand services to help establish regulatory “symmetry” with over-the-top streaming. In the company's final reply comments for the commission's proceeding on a regulatory framework to address vertical integration, Shaw said video-on-demand “is one of the most effective tools to compete with OTTs .” In comments dated July 8, the deadline for final replies, Shaw wrote that several regulatory requirements for video-on-demand services should be eliminated, including the obligation to contribute 1.5 per cent of revenues to Canadian content production funds. Broadcasting distributors with affiliated video-on-demand services already make a five per cent contribution to Canadian programming from revenues earned from video-on-demand sales, the company argues. Requiring its video-on-demand undertaking to also make a contribution “is double counting,” Shaw said. The company added that all restrictions on the content offered in subscription video-on-demand services should be removed. “OTT services have no limits on exhibiting SVOD content and have an extensive library of television programming and series. Furthermore, SVOD rights for television programming are, for the most part, controlled by Canadian linear services,” Shaw wrote. The company also recommended that the CRTC remove all limits on advertising for video-on-demand services to allow for “new forms of targeted advertising”; eliminate any prohibition on video-on-demand services' exclusive rights to programming; exempt video-on-demand services from licensing and reduce the requirement for a minimum of 6.25 per cent Canadian titles to five per cent; scrap the requirement to remit 100 per cent of Canadian rights holder revenues to feature films; and exempt video-on-demand services from the 3:1 linkage rule so that they are not required to carry linear services affiliated with other companies. “We respectfully suggest that the Commission should preserve Canadian exhibition requirements, while providing the above-requested relief,” Shaw wrote. “This allows VOD providers the room and flexibility to make best efforts in pursuing and achieving these expectations, without the substantial burden of strict compliance.” The request to deregulate video-on-demand is the latest salvo from Shaw in the battle to “level the playing field” with unregulated, foreign-owned, over-the-top streaming portals like Netflix, Apple TV and Boxee. Earlier this month, in a submission for the CRTC’s fact-finding consultation on over-the-top services and their role in the Canadian broadcasting system, Shaw also told the commission that, to create symmetry with online competitors, broadcasting distributors should no longer be obligated to subsidize Canadian programming. Shaw wrote that contributions to the Canada Media Fund should be phased out, subsidies through the Local Programming Improvement Fund (LPIF) scrapped, and the commission's value-for-signal regime eliminated. “Is it reasonable to ask BDUs to invest billions of dollars building the broadband infrastructure for a digital broadcasting system and digital economy, and to contribute millions of dollars annually to Canadian programming when unregulated OTT services are reaching Canadians using those same networks and operating as direct competitors, but with no parallel obligations?” Shaw wrote. Controversy has emerged over the way in which the commission should respond to online competition in the broadcasting sector. A coalition of cultural groups, including the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), and the Canadian Media Production Association (CMPA), also argues that over-the-top services pose a threat to the Canadian broadcasting system, but they say the growth of online competition does not signal the need for deregulation. Instead, the groups argue that the CRTC should ensure that these new online services also contribute to the creation and presentation of Canadian programming as distributors are under the Broadcasting Act. Companies like Netflix Inc. and Google Inc. argue that there is no evidence that online portals pose any real competition and that they are complementary to the Canadian broadcasting system. news@thewirereport.ca

Shaw calls for further deregulation of video-on-demand to compete with OTT

Broadcast | July 14, 2011

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