Offside? Analysts say BCE’s new HabsTV offering a test case of vertical integration rules

A new service from Bell Canada Enterprises Inc. offering its mobile customers early access to behind-the-scenes footage of the Montreal Canadiens hockey team could become a test case on the CRTC’s new regulations for vertically integrated companies, analysts say. Announced in a Thursday morning press release in advance of the Canadiens’ 2011-2012 regular season home opener, Bell said its new service will give customers exclusive, early access to “HabsTV” video clips on smartphones, tablets, TVs and computers. Primarily consisting of off-ice footage of the team, the clips will be later uploaded to Bell’s website for other consumers to view, Marie-Eve Francoeur, a Bell spokeswoman, said in an interview with The Wire Report. “It’s content that Bell customers will have access to in advance,” Francoeur said. “Eventually it’s going to be public.” Under new CRTC regulations released last month, vertically integrated companies like Bell—which own both broadcast assets and broadcast distribution platforms—are prohibited from providing customers with exclusive mobile content unless that content is specifically designed for mobile use. Bell, which owns the broadcast rights to Canadiens' games, said in its release that the content will be available on Bell satellite TV on channel 414 Monday to Friday at 7:30 p.m., as well as on Bell's Fibe TV video-on-demand service. John Lawford, counsel with the Public Interest Advocacy Centre (PIAC), said Bell may be trying to test the CRTC's new vertical integration regulations. “Bell is just trying to push it here, and it’s going to be interesting,” Lawford said. “It’s a fantastic new test case, as long as somebody ... takes exception to them skating so close to the boards, so to speak.” Lawford said PIAC views the new Canadiens content as potentially offside the CRTC's new regulations, but he acknowledged they are vague about what is considered content developed specifically for mobile use. The content seems to be developed for use equally on new media devices as well as traditional broadcasting platforms, he said. Advanced access to the content will be available to Bell Mobility customers using the Montreal Canadiens mobile application for iPhones and iPads; to Bell Internet customers through the company’s website; and to Bell satellite and Fibe TV on-demand customers, Bell’s website says. “It’s really interesting for clients to get access to those behind-the-scene videos,” Francoeur said. Focusing specifically on off-the-ice footage of Canadiens players as they travel and prepare for games, the HabsTV video clips will be made available for advanced access to Bell customers twice a week, Francoeur said. “The question is: is this stuff developed primarily for television?” Lawford said. “In the press release they say it is meant to be something that is special for their mobile users, and then they turn around and say it will be ready for people on Fibe TV and the Internet and their satellite TV. Where do you draw the line for something produced for all four and two of the four being television?” Lawford said he is unsure of whether the CRTC's new regulations prevent vertically integrated companies from offering “early”—as opposed to “exclusive”—access to traditional broadcasting content for mobile customers. “Whether that’s a distinction or a difference, I don’t know,” he said. Richard Paradis, president of consulting firm Groupe CIC and an instructor at the Université de Montréal's communications department, said the new service is likely Bell’s attempt to push the limits of the new ruling without actually going over the line. “Bell is a corporate entity that has to maintain its stature as a major Canadian company. So if it starts disrespecting the rules of the commission, it’s going to be in big trouble,” Paradis said. “I think it’s probably respecting the outline that the commission put forward, but we’ll have to see.” The CRTC's vertical integration decision said that, "to encourage innovation in programming, the Commission finds that exclusivity may be offered for programs that are created specifically for new media platforms." A press release issued the same day as the decision added that companies can offer "exclusive programming to their Internet or mobile customers provided that it is produced specifically for an Internet portal or a mobile device. This includes supplementary programming such as behind-the-scenes video clips of a television program, as well as original content." Given a lack of details about how Bell's new service will operate and when the content will be made available to other consumers, Paradis said it may be too early to judge whether the service conforms with the commission’s regulations. Paradis said Bell, which has strongly opposed the commission’s vertical integration decision, could appeal it to the federal cabinet. In response to a follow-up question, Jacqueline Michelis, a spokeswoman for Bell, said by email Thursday: “Our Habs offering is entirely consistent with the vertical integration decision. It is content created specifically for new media platforms.” As part of its vertical integration ruling, the CRTC is also expected to publish amendments to its exemptions for new media by the end of the year. “Accordingly, before the end of the year, the Commission will publish a proposed amendment to the New Media Exemption Order and a notice of consultation calling for comments on draft regulations, as appropriate, to reflect the decision set out above,” the commission's vertical integration decision said. This proceeding could give the commission an opportunity to clarify its rules on early access and to more clearly define what the commission will consider as content developed specifically for new media platforms. Paradis noted that sports programming is a lucrative market for vertically integrated carriers that want to promote their sports-related broadcasting services through new media services due to their appeal to more mobile-oriented male users. He said this was a significant factor in Bell’s 2010 purchase of CTV, which brought the company the broadcasting rights to the Canadiens. “These little video clips are just going to create and maintain interest by users and hopefully what this does is it’s going to carry over to get people to watch the game on television,” Paradis said. “ are probably the first ones trying it, but we can expect that in baseball and other sports we’ll start seeing this kind of thing going on.” In a move to tap into that lucrative sports market, Pierre-Karl Péladeau, CEO of vertically integrated player Quebecor Media Inc., has been a key proponent of seeing an NHL team returned to Quebec City. “All of these big companies are trying to get their hands on sports entities and they want to maximize their return on their investments on these entities by using all of the technologies that are available to them,” Paradis said. “That’s why they’ve built these vertically integrated companies.” nkyonka@thewirereport.ca

Offside? Analysts say BCE’s new HabsTV offering a test case of vertical integration rules

Broadcast | October 13, 2011

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