Specialty channel war is screwing customers

UPDATE (Nov. 23): We have a truce! RDS2 has come to Videotron, while TVA’s channels including TVA Sports and Sun News are coming to Bell TV.

This fall, two new all-sports networks are being launched. One, RDS2, is owned by Bell Media. The other, TVA Sports, is owned by Quebecor’s Groupe TVA.

Personally, I think this is good news. Competition for viewers will do good things, like bring Montreal Impact games to the TV screen. And the CRTC has determined that sports channels – currently the most profitable format – are healthy enough that they shouldn’t be restricted from competition. (Not healthy enough for Radio-Canada and Rogers to jump in the fray, but still healthy).

But you can’t get TVA Sports if you’re a subscriber to Bell TV. And it’s not clear if you’ll be able to get RDS2 if you subscribe to Videotron (it has deals with only Bell and Shaw so far). That may change (RDS2 is most likely doomed to failure if it can’t get Videotron carriage), but even if it’s just a delay, this is yet another example of two companies whose affiliated television distribution services are giving undue preference to their affiliated specialty channels.

Another example in the sports sphere is TSN Habs, a part-time regional offshoot of the TSN channel that has regional English-language broadcast rights to some Canadiens games. It’s available on Bell TV, but not on Videotron, despite Videotron’s huge subscriber base in Quebec, where I understand the Canadiens are popular – even among anglophones.

Sports isn’t the only type of channel where this problem exists. In the past few years, broadcasters have applied for and received dozens of licenses for unregulated specialty channels – the so-called “Category 2” channels that aren’t protected from competition and have low requirements for Canadian and original content. In exchange for some liberties in programming, the channels have no guaranteed carriage, so cable and satellite companies can choose whether or not to include them in their lineups, and the broadcasters can choose to charge whatever they would like.

Quebecor has been particularly active in this field, launching a bunch of new channels (including TVA Sports), many of them in high definition. In all cases, those channels are immediately carried on Quebecor-owned Videotron’s cable system, but few of them are on Bell TV.

To give you an idea of what’s going on here, I’ve compiled a table below of specialty channels owned by the big cable and satellite companies (Cogeco is included for reference, but doesn’t own any specialty channels). I’ve limited the list to those channels that are either Category 2 (unregulated, with no guaranteed carriage) or that have high-definition feeds available.

I’ve marked in bold where a service is offered by the affiliated distributor that is not offered by at least two of its competitors, suggesting undue preference. I’ve marked in red where the opposite is true, where a service is not offered by the affiliated company but is offered by at least one competitor.

Channel Owner Bell TV Videotron Shaw Direct Cogeco Rogers Cable
Discovery Bell Media (64%) SD/HD SD* SD SD SD*
Space Bell Media SD/HD SD SD SD SD
MuchMusic Bell Media SD/HD SD SD SD SD/HD
MuchMoreRetro Bell Media X SD X SD(O) SD
MuchLOUD Bell Media X SD X SD(O) SD
Much Vibe Bell Media SD SD X SD(O) SD
PunchMuch Bell Media SD SD X SD(O) SD
Comedy Gold Bell Media SD SD X SD(O) SD
Investigation Discovery Bell Media SD SD X SD(O) SD
Discovery World Bell Media (64%) HD HD HD HD HD
ESPN Classic Bell Media (80%) SD SD SD SD SD
NHL Network Bell Media (17%) SD SD SD SD SD
TSN2 Bell Media (80%) SD/HD SD/HD SD/HD SD/HD SD/HD
TSN Habs Bell Media (80%) SD/HD X SD/HD X X
LCN Groupe TVA SD SD/HD SD SD/HD(Q) SD
CASA Groupe TVA SD SD SD SD(Q) SD
Prise 2 Groupe TVA SD SD SD SD(Q) SD
Mlle Groupe TVA Dec. 15 SD/HD SD SD/HD(Q) X
TVA Sports Groupe TVA Dec. 15 SD/HD SD/HD X X
Sun News Groupe TVA Dec. 15** SD/HD SD SD/HD(O)** SD**
Yoopa Groupe TVA Dec. 15 SD/HD SD SD/HD(Q) X
Showcase Shaw Media SD/HD SD SD/HD SD/HD(O) SD/HD
Showcase Diva Shaw Media SD SD SD SD SD
Action Shaw Media SD SD SD SD SD
BBC Canada Shaw Media (80%) SD SD SD SD SD
DejaView Shaw Media SD SD SD SD SD
DIY Network Shaw Media (80%) SD SD SD SD(O) SD
Dusk Shaw Media SD SD SD SD SD
Fox Sports World Canada Shaw Media (58%) X SD SD SD SD
Global Reality Shaw Media X X X X SD
Food Network Shaw Media SD/HD SD SD SD SD
History Television Shaw Media SD/HD SD SD/HD SD/HD(O) SD/HD
HGTV Canada Shaw Media SD/HD SD SD/HD SD SD
Movietime Shaw Media SD SD SD SD/HD(O) SD/HD
Rogers Sportsnet One Rogers SD/HD X SD/HD SD(O)/HD(O) SD/HD
Sportsnet Sens/Flames/
Oilers/Vancouver Hockey
Rogers SD/HD X X SD(O) SD/HD
OLN Rogers SD SD SD SD SD/HD
Setanta Sports Rogers SD/HD SD SD/HD SD(O) SD/HD

(Q)/(O): Denotes channels that Cogeco carries in Quebec or Ontario only.

*Discovery World HD, a separately licensed channel, is available on Videotron.

**The situation with Sun News is complicated by the fact that a conventional TV station was broadcasting its content. Rogers, Cogeco and Bell carried the conventional signal, but Sun News asked Bell to pull the channel or start paying for it.

You can see in the chart 12 instances among the 37 channels where there is evidence of undue preference. This does not necessarily prove such a thing – there could be all sorts of reasons to choose whether or not to carry a channel – but it’s annoying nonetheless for customers who want a certain channel and can’t get it for no apparent reason other than it’s owned by the wrong cable company.

You’ll also see four (UPDATE: five) instances where a service isn’t offered by the affiliated company. It’s worth noting that all of those services predate their ownership by the affiliated cable/satellite company.

The CRTC actually has a rule against this sort of thing. It’s called “undue preference”, and it is supposed to prevent just this sort of thing. The problem is that it’s hard to prove. Negotiations between broadcasters and distributors are secret, and we don’t know how much each distributor is paying for each channel.

Still, this may come to a head soon. Sun News has filed a complaint with the CRTC alleging undue preference on the part of Bell when it pulled the station’s signal and refused to pay for it.

Hopefully the CRTC will take a close look at this issue and do something about it before the flood of new channels makes the problem – and viewers’ frustrations – even worse.

Quebecor begins hypocritical outrage campaign

UPDATE (Sept. 20): QMI Agency has published a joke of a news article by Raphaël Gendron-Martin. It quotes only TVA’s Pierre Dion bashing Bell and Cogeco for not carrying TVA Sports, and makes no apparent attempt to contact Cogeco or Bell for comment. The hit piece appears in the Journal de Montréal (on the front page), 24 Heures, TVA Nouvelles and Argent (twice). Dion also appeared on LCN and TVA’s Salut Bonjour, where again no apparent attempt was made to contact Cogeco or Bell for comment, no mention was made of RDS2 or TSN’s Habs channel not being on Videotron, and Dion went unchallenged on anything he said. (In the case of Salut Bonjour, it’s clear host Gino Chouinard is being fed his questions and even refers to Dion as “boss” at the end.)

Despite what I am unfortunately forced to conclude (to use Dion’s logic) was an organized misinformation campaign from Quebecor that abused its media power, Cogeco did respond by way of an open letter (PDF) that was also published on Facebook. Cogeco said it was interested in carrying TVA Sports and even made an offer that TVA refused.

No (public) word yet from Bell.

I sent an email to Gendron-Martin asking him about his article. He responded by pointing to full-page piece in Tuesday’s paper by Danny Joncas, which quotes representatives of Bell and Cogeco. Gendron-Martin did not respond to questions about why he didn’t contact Bell or Cogeco before writing his piece, nor why he didn’t mention Videotron not carrying RDS2, nor whether he was ordered by his employer to write this article in this way.

Joncas’s reaction piece was not posted online, either by the Journal or by any other QMI website. The original article from Gendron-Martin still appears on those websites unaltered, with no indication that there has since been a response.

Joncas’s piece quotes both Bell and Cogeco saying these negotiations should be conducted privately instead of in the media, and that both are negotiating with TVA. It also says TVA rejected Cogeco’s offer because it wanted better placement in Cogeco’s specialty channel packages.

UPDATE (Sept. 23): The CRTC has released new rules concerning this issue (press release, decision, Globe and Mail story). It offers some specific rules (no mobile/Internet exclusivity deals for TV programs), but also includes a lot of rules barring things that are “unreasonable” or “excessive”, which leaves a lot of room for disagreement over what qualifies as unreasonable.

It also pushes off a lot of decisions until later, including whether cable and satellite companies should be required to offer à la carte subscriptions (though they seem to be moving in that direction).

Whether those new rules will change how these big telecom companies deal with each other is to be seen.

23 thoughts on “Specialty channel war is screwing customers

  1. Mike Berthold

    As an Anglophone one of the main reasons I’m with Bell TV instead of Videotron is because I was tired of hearing ‘who knows when we’ll ever carry X or X in HD’ when it was an English net; they have an attitude of not caring if you don’t like their policies because they’ve become used to being a huge monopoly that doesn’t need to take possible competitors (i.e. satellite) seriously.

    Bell has enough French content (I do watch both) to keep me happy and RDSHD for Habs games, so I’m not missing much other than frustration.

    Reply
    1. Fagstein Post author

      As an Anglophone one of the main reasons I’m with Bell TV instead of Videotron is because I was tired of hearing ‘who knows when we’ll ever carry X or X in HD’ when it was an English net

      This is also for the simple reason of market. Videotron operates almost exclusively in Quebec, so they have a lot more French channels (and, conversely, a French channel needs Videotron to carry it to be successful). Bell operates across Canada, where French is the minority, so it will focus on English channels.

      But that’s not enough to explain all the preferential treatment I see here.

      Reply
  2. Jon Simon

    Rogers is very much in the fray with SportsNet (Not healthy enough for Radio-Canada and Rogers to jump in the fray, but still healthy).

    Reply
  3. AlexH

    The fun doesn’t just stop at the speciality channels, it also extends to the OTA channels as well.

    With the shift to HD/digital at the start of the month in Canada, pretty much every major market channel is now broadcasting in HD. On BellTV, however, this isn’t working out so well.

    This week, they added a number of OTA channel – all of them owned by Bell’s CTV network, as well as CTV2. Not a single additional Global channel was added.

    Considering the number of SD channels they are carrying in the 200-279 range on the Bell system right now, and considering many of those have shifted to HD, it is remarkable that they just don’t seem to want to add them in HD.

    Oh, but they did fire up plenty of HD pay per view and sports package channels, and they did add all the Bell owned HD speciality channels.

    This is the sort of thing that media concentration gets you. Each one of the companies is trying to go “vertical market”, offering as example only the mandated SD channel rather than SD. It means in the end that none of the solutions offered by any of the companies is complete.

    Reply
    1. Fagstein Post author

      This week, they added a number of OTA channel – all of them owned by Bell’s CTV network, as well as CTV2. Not a single additional Global channel was added.

      Global Montreal has been told they’ll be added this month. It’s possible others will be too. But yeah, it’s a bit sketchy. The CRTC regulates how many affiliated channels can be added to satellite service as a proportion of competing channels.

      Considering the number of SD channels they are carrying in the 200-279 range on the Bell system right now, and considering many of those have shifted to HD, it is remarkable that they just don’t seem to want to add them in HD.

      Local stations that are part of the same network are mostly identical coast to coast, except for the local newscasts. That’s a lot of seemingly redundant signals taking up a lot of space. With specialty channels, there’s just one or two feeds.

      And there’s the point that people pay for specialty channels.

      Reply
      1. AlexH

        It hits the point that “local channels don’t matter”, because they don’t seem to do very much local anymore.

        I often thought that the “local channels matter” deal with a very sneaky way for the channel owners (mostly bell, shaw, rogers, and cogeco) to turn around and charge the big distributors mostly bell, shaw, rogers, and cogeco a fee for local programming, and having the CRTC allowing them to post it as an supplemental charge to users. If they money was coming directly out of the distributors (mostly bell, shaw, rogers, and cogeco) rather than the end users, they likely would have given up the fight.

        Just like in Montreal at CFCF or Global, the “local” contribution is very small overall, and almost exclusively given over to news at this point. The major distributors (mostly bell, shaw, rogers, and cogeco) could run two feeds total for CTV (east and west) and then open up special channels only at the news hours to support local news, because it’s the only time there is any variation. Otherwise, there is no need for all this duplicate services, except to give head to the CRTC.

        Reply
        1. Fagstein Post author

          I often thought that the “local channels matter” deal with a very sneaky way for the channel owners (mostly bell, shaw, rogers, and cogeco) to turn around and charge the big distributors mostly bell, shaw, rogers, and cogeco a fee for local programming, and having the CRTC allowing them to post it as an supplemental charge to users.

          1. Cogeco doesn’t own any TV stations.
          2. The “Local TV matters” and “Stop the TV Tax” campaigns predate both Shaw’s acquisition of Canwest and Bell’s (full) acquisition of CTVglobemedia. It was after those things happened that both campaigns kind of fizzled out.

          The major distributors (mostly bell, shaw, rogers, and cogeco) could run two feeds total for CTV (east and west) and then open up special channels only at the news hours to support local news, because it’s the only time there is any variation.

          Bell had exactly that idea and got approval from the CRTC to do it in 2005. It runs local news programs on channels 196 and 197.

          You also have to consider local advertising, which runs all the time. Using this technique means eliminating local commercials outside of local programming.

          Reply
          1. Fassero

            And ending “Local TV Matters” turned out to be a wonderful thing for Bell, Rogers, and Shaw. Buy/own broadcasters + still collect new LTIF fees as mandated by CRTC (which were, and still are, charged directly to customers) to now, in effect, pay yourselves = EASY PROFIT!

            Improvements to local television? Er, um, not so much.

            Reply
            1. Fagstein Post author

              LTIF fees as mandated by CRTC (which were, and still are, charged directly to customers)

              LPIF fees aren’t charged directly to customers any more than any other tax on cable and satellite companies are (contributions to the Canada Media Fund, for example). Tacking it on as a separate line on cable bills was done by the cable companies as a way to get public opinion on their side.

              Reply
  4. Dan

    Just came across this blog while searching to see if Telus Optik (Vancouver) will carry TVA Sports. I really need to see the Montreal Impact games. Hopefully by March 2012.

    Reply
  5. Me

    I think it should be noted that when you say:

    “(Not healthy enough for Radio-Canada and Rogers to jump in the fray, but still healthy)”…..

    IMO it has more to do with them not really having a fair shot at launching these channels rather than either of these companies not wanting to launch a sports channel in French. I don’t speak French, so I can’t speak of what the articles you link to say, but IMO, neither of these companies really had a shot of launching their French sports channels when TVA decided they wanted to launch theirs.

    Videotron and to a lesser extent Bell (both of whom own French sports channels) essentially own the French BDU market. And if a channel wants to survive then it basically has to be carried by Videotron and a lesser extent, Bell. This rings even more true when you’re talking about a sports channel which is considerably more expensive to run than say Disney Junior for example.

    So, now that Videotron (Quebecor) has TVA Sports and Bell has RDS, neither of these companies are going to want to launch a rival sports channel from Radio-Canada or Rogers because it will drive up the costs of bidding for programming and likely lower their viewers because of competition.

    This is a perfect example, along with what you mention in your posting, as to why BDUs should not even be allowed to own specialty channels.

    Reply
    1. Fagstein Post author

      So, now that Videotron (Quebecor) has TVA Sports and Bell has RDS, neither of these companies are going to want to launch a rival sports channel from Radio-Canada or Rogers because it will drive up the costs of bidding for programming and likely lower their viewers because of competition.

      If that’s true, it’s not what we’ve heard from those broadcasters as reasons for holding off. While carriage is a big issue for new channels, the bigger problem is contracts with sports franchises. RDS has the Canadiens locked up until 2013, and is also the exclusive Alouettes carrier, plus has deals to carry most major sporting events. TVA Sports got some leftovers like Ottawa Senators and Impact games (and even then not all of them), plus stuff like UFC and boxing, while it waits for either a chance at the Canadiens rights or their magic Nordiques gravy train. A new sports network not affiliated with RDS would have to practically invent new sports.

      Both Bell and Videotron carry sports channels from third parties, including The Score, Fight Network and Rogers-owned Sportsnet and Setanta Sports.

      Reply
      1. Me

        But, there are a lot of other sports out there for the picking to be broadcast in French. RDS and TVA Sports may have a lot of the big draws like Canadiens, Senators, Impact, etc, but there’s lots of others out there too. Without counting multiplex channels like Sportsnet Sens or TSN Habs and counting all the regional feeds of Sportsnet as just 1 single channel, I counted 16 or 17 if you count Leafs TV. There’s also, several US sports channels in Canada too. So, in essence, there’s tons of English sports channels out there in Canada, as opposed to 3 (RDS, RIS, TVA Sports) and soon 4 (RDS2). All those other English channels can fill a schedule, so I think there is still tons of good stuff left to fill a French Sportsnet or Radio-Canada Sports.

        Yes, Bell and Videotron carry other non-affiliated sports channels, but all the others are niche channels like Fight Network and Setanta Sports. So, I don’t think it’s exactly comparable to a general interest sports channel that can air whatever types of sports it wants. Also, I don’t think Bell and Videotron really have the power to thwart a English sports channel if they wanted. If the NHL Network wasn’t carried by Videotron because it didn’t want the competition, I don’t think it would hurt them to the point that it would shutter. There’s too many other larger BDUs out there that would carry it and it could survive off those, it may not even need Videotron. And who knows, eventually once it becomes popular enough, pressure from customers would likely get the channel added to Videotron in the end.

        I don’t think the same can be said for a French sports channel, it would need Videotron to survive. So, if it didn’t carry it, especially if Bell did the same, it’s likely not worth launching.

        Reply
        1. Fagstein Post author

          But, there are a lot of other sports out there for the picking to be broadcast in French. RDS and TVA Sports may have a lot of the big draws like Canadiens, Senators, Impact, etc, but there’s lots of others out there too. Without counting multiplex channels like Sportsnet Sens or TSN Habs and counting all the regional feeds of Sportsnet as just 1 single channel, I counted 16 or 17 if you count Leafs TV.

          Sportsnet Sens, TSN Habs and Leafs TV are all regional feeds and can’t be carried nationally because they don’t have national broadcast rights to those games. TVA Sports isn’t a regional channel, so you have to strike those off the list in a comparison. They are also, for the most part at least, part-time channels only used during games, so they don’t fill their schedules.

          Programming is the real issue. With French being so predominant in Quebec and so rare elsewhere in Canada, any French channel needs to market to francophone Quebecers to be successful. And that means Canadiens games, or maybe Alouettes. Senators, Jays and Impact games have some audience, but it’s barely a blip on the radar comparatively.

          That’s not to say a different channel couldn’t be successful. One devoted to golf and tennis, for example. But RDS carries rights to most of these other sports, too. And while sports channels are the most profitable, they are also the most expensive to operate.

          I think another French sports channel could work. But I don’t want to diminish the difficulty involved.

          Reply
    1. Joe

      I’m so glad I gave my TV the boot 10 years ago. The Internet has all the “channels” I want, whenever and wherever I want. No wait-until-the-show-starts-wait-during-advertising TV channel bundle can beat that.

      Reply
  6. Jimmy Jack

    Too bad your colleague, Peter Hadekel, didn’t read this before writing his ridiculous column a couple of days ago. While reading the column, I could only think he hadn,t a clue about the subject he was writing about.

    Reply
  7. cowellj

    I absolutely cannot stand Cogeco in Kingston…..get off your ass and get TSN-Habs and RDSHD !!!!!
    even if they made them available for extra $$ I would get get those channels, but they can’t even do that !!!!
    I have smoke coming out my ears every time I watch a Habs game in SD on RDS
    F**** YOU COGECO !

    Reply
  8. Pingback: The CBC/Quebecor misinformation war – Fagstein

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