Shaw free to offer terrestrial and DTH PPV services nationally

Two months after issuing its decision regarding terrestrial pay-per-view (PPV), the CRTC has handed Astral Media Inc. another blow with a ruling that allows Shaw Communication Inc.’s direct-to-home (DTH) PPV service to expand beyond its western Canadian power base. Both the terrestrial and DTH PPV services operated by Shaw Communications’ Shaw Pay-Per-View Ltd. unit were previously limited to distribution in British Columbia, Alberta, Saskatchewan, Manitoba, Yukon, Northwest Territories and Nunavut. With last month’s Broadcast Decision 2006-112, the DTH service will now be eligible for national distribution by Shaw’s Star Choice Television Network Inc. DTH undertaking, following a similar decision in February regarding the terrestrial service. Shaw had argued the change was necessary to level the competitive playing field with DTH rival Bell ExpressVu, whose Vu Movies and Vu Sports and Events pay-per-view services are already available coast to coast through Bell ExpressVu’s satellite broadcast distribution undertaking. Calls to Shaw Communications, Star Choice and Bell ExpressVu were not returned by press time. In return for the ability to offer a national DTH PPV service, Shaw Pay-Per-View proposed offering a 1:3 ratio of French- to English-language channels, with an overall minimum of five French-language channels (15 English-language channels), and a minimum of 12 examples of French-language event programming annually. The service must also feature a French-language barker channel to market the Francophone offerings. Additionally, Shaw must meet annual Cancon levels of 8% of the feature film titles it airs and 20% of all its other programming. Finally, Shaw Pay-Per-View subscribers must also have access to at least 20 eligible Canadian French-language feature films a year – either originally shot in French or overdubbed – and the firm must remit 100% of the revenue derived from their exhibition to program providers and distributors, with a minimum of 60% going to the providers. While the terms are similar to those imposed on Bell ExpressVu’s PPV services, the last stipulation means that if either DTH PPV service were to broadcast a French-language Canadian feature film such as last year’s critically acclaimed C.R.A.Z.Y. from Quebecois director Jean-Marc Vallée, neither service would be able to profit directly from the exhibition. Instead, they would be obligated to pass on all the PPV revenue. Both Astral Media and Bell ExpressVu intervened in the proceedings, albeit for differing reasons. Bell ExpressVu voiced fears that Shaw Pay-Per-View would have a competitive advantage, since its DTH PPV service is exempt from the 5:1 ratio of unrelated to related Category 2 specialty services mandated by section 18(14) of the Broadcasting Distribution Regulations. The commission, however, ruled that objection to be outside the scope of the hearing. Astral, meanwhile, put forward the same objections it did during Shaw’s terrestrial PPV proceedings, saying that the proposed change to offer a national DTH PPV service would impact its business in eastern Canada, where Astral holds a monopoly with the Viewers Choice package of PPV channels. Astral also argued that the various French-language conditions and commitments were deficient when compared with those agreed to by its Canal Indigo service, as well as both of Bell ExpressVu’s PPV offerings. According to Astral’s submission, Canal Indigo and Bell ExpressVu must abide by a 12:20 ratio of Canadian to non-Canadian French-language events for each year of licence, a far more restrictive provision than Shaw’s proposed Francophone content levels such as the 20% of all non-film programming. But in approving Shaw Pay-Per-View’s request, the CRTC noted that since 2000, when it licensed several new competitors in the PPV and video on demand spaces, it has sought to focus on a market-driven approach and foster competition in the PPV market. Additionally, the commission in its decision said "authorizing the national distribution of Shaw’s DTH PPV service may enable the licensee to generate more gross revenues and consequently increase its contributions to Canadian program production," and the heightened competition represented by having two fully national DTH PPV services would be in keeping with that philosophy. Finally, the commission opined that the French-language conditions Shaw had proposed and agreed to were similar to those observed by Bell ExpressVu’s national service, and concluded that the provisions were sufficient as they were. The move leaves Astral Media’s Viewer’s Choice and Canal Indigo offerings as the only major pay-per-view services restricted to operating in only part of the country. In an e-mail statement forwarded to Canadian Communications Reports, Astral Television Networks senior VP of marketing and sales Domenic Vivolo said that it’s premature to speculate on the impact the changes to Shaw’s licence might have on Astral, and that there will be ongoing discussion between Astral and Shaw over the issue. However, he added, "It is very likely, given the nature of this business, that our two services can successfully co-exist with each service offering consumers unique live-events and entertainment programming." That programming, according to Astral Media director of corporate communications Rachel Yates, could include live coverage of sports such as boxing or cricket that don’t have much traction on conventional television.

Shaw free to offer terrestrial and DTH PPV services nationally

Broadcast | April 10, 2006

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