Tag Archives: Videotron

Dispute over Crave is a frustrating step backwards for relations between Bell and Videotron

I regret to inform you that Bell and Quebecor are at it again.

On Nov. 1, Bell announced that Crave TV and The Movie Network have effectively merged, and Crave is now accessible to anyone subscribed to TMN. Anyone, that is, who isn’t subscribed through Videotron.

In what Videotron has been telling consumers is a “disagreement” (and is implying is entirely Bell’s fault), Videotron and its tens or hundreds of thousands of TMN subscribers have been deprived of this access through crave.ca and the Crave app.

I asked both sides why for a story published at Cartt.ca. Videotron declined to comment, while Bell did the same but not before telling me that it has filed copyright and trademark infringement claims against Videotron for continuing to use video-on-demand content it has no rights for. Bell says Videotron has no VOD rights to Crave/TMN/HBO Canada content, which makes their continued offering of it through Videotron’s Illico On Demand and Illico Web platforms an act of piracy.

According to the statement of claim filed at federal court (which I had to have a courthouse clerk print out from his computer because our legal system is still ridiculous), Bell is claiming damages of at least $20,000 per work for about 2,700 works (individual episodes and movies) or “not less than $100 million.”

Bell’s claim — which Videotron hasn’t responded to yet; it has until Dec. 5 — states that Bell’s distribution agreement with Videotron for The Movie Network was terminated by Videotron in 2016, and the two have been in discussions since. This August, Bell presented an offer to Videotron to keep distributing the new Crave, which Videotron neither accepted nor rejected. On Oct. 16, Bell gave Videotron a 10-day deadline, saying if it didn’t accept a new offer it would no longer be permitted to offer video-on-demand content from Crave after Oct. 31.

Videotron said it was considering its options, but again neither accepted nor rejected the offer.

The deadline passed, and Oct. 31 passed, so on Nov. 2 Bell filed its lawsuit. The lawsuit specifically targets Videotron’s video-on-demand programming for TMN/HBO Canada through Videotron’s Channel 900 VOD system, the Illico app and Videotron’s website. Distribution of the linear channels of TMN (now Crave) and HBO Canada are covered by the CRTC’s standstill rule and so Videotron can keep distributing them legally.

It’s frustrating for Videotron customers, who have been continually inconvenienced by the failure of these two groups to reach a deal. The VOD deal for TMN and HBO Canada was a first step forward, followed by the deal for TSN and RDS. Other Bell Media services, like CTV, Discovery and Space, still don’t have deals with Videotron, so their subscribers still can’t access CTV GO and related services. Rather than taking steps forward, they’re taking steps back.

The offers and contracts are confidential, so we have no idea which side is being unreasonable here. Two previous distribution deals between the two went to CRTC arbitration (TVA Sports on Bell and RDS on Videotron), and the commission sided once with either side.

On one hand, Videotron is trying to get the best deal for its subscribers, who are mostly francophone and have less interest in anglophone TV content (that’s important because many distribution deals factor in total subscribers regardless of whether they’re subscribed to a particular service). And they’re negotiating against a company that is also their direct competitor as a TV service provider. On the other hand, Bell only seems to have this problem with Videotron. Rogers, Shaw, Telus, Cogeco and others have successfully reached deals with them.

Hopefully a settlement is reached quickly in this dispute, and hopefully changes follow so that distribution agreements are less complicated and don’t require such extensive negotiations. In the meantime, Videotron subscribers continue to deal with an incomplete offer of services.

Major cable TV companies’ licences renewed: What the CRTC decided

On Aug. 2, the CRTC renewed the broadcasting licences of most of Canada’s major cable TV companies, including Videotron, Cogeco, Rogers, Shaw, SaskTel, Eastlink, Telus, VMedia and Bell MTS.

Though it wasn’t technically a policy proceeding, the omnibus licence renewals allowed the commission to impose a bunch of de facto policies, or clarify existing ones, on everyone at the same time. (Licenses for Bell’s Fibe TV operations, Bell satellite TV, Shaw Direct and some other distributors weren’t part of this proceeding, and smaller distributors who are exempt from licensing aren’t affected.)

Here’s what was decided:

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Videotron reaches last-minute deal to keep AMC

A month after telling subscribers it is being forced to drop AMC because it couldn’t reach a deal on renewing its contract, Videotron announced on Friday that it has reached a new deal with the popular American channel on the last business day before the channel was to be dropped.

Videotron tells me that “thanks to much effort and perseverance” it has managed to “make the voices of our clients heard.”

Details are confidential, and Videotron declined to tell me even how long their new deal is, but it says the deal “responds to the reality of our regional market” and is satisfactory to both parties. Videotron had previously suggested that AMC’s previous offer was unreasonable because it’s in a francophone market where a smaller fraction of its subscribers would be interested in such a channel.

Videotron tells me that there will be no change to AMC’s packaging. The channel is in some grandfathered theme packages, the Movie Network package, build-your-own packages (with a $2/month surcharge), or completely à la carte for $10 a month.

Thanks to the new deal, there will be a free preview for all digital cable subscribers, from Feb. 12 to 28.

AMC isn’t quite as popular as during the days of Mad Men and Breaking Bad, but it still has The Walking Dead, whose new season begins Feb. 25, as well as series like Better Call Saul and Halt and Catch Fire.

UPDATE (Feb. 10): Videotron’s press release is here.

Videotron decides AMC isn’t worth the cost

UPDATE (Feb. 9): Videotron has reached a last-minute deal to keep the channel.

It didn’t take long after Videotron started informing clients that it was dropping AMC as of Feb. 12 for those clients to start complaining.

I contacted Videotron and asked them why they’re dropping the channel, and their response was about what I expected: They just can’t meet AMC’s carriage demands.

I wrote a short story about the decision for Cartt.ca. For non-subscribers, the previous sentence summarizes Videotron’s reasoning.

It’s too expensive, AMC’s carriage demands (which aren’t just about the per-subscriber fee) are too onerous, and all this for a channel that most of its clients aren’t interested in and whose viewership has been trending downward.

We don’t know exactly what AMC’s demands are, because negotiations and carriage contracts are secret, but it’s likely there was something along the lines of a minimum penetration guarantee or penetration-based rate card, which effectively force a provider to make sure a large number of its clients subscribe to the channel.

For national providers like Bell (Videotron’s main competitor), Rogers and Shaw, AMC’s demands may be more acceptable (though I doubt any of them are happy with the conditions). But for Videotron, which operates in Quebec and has mainly a francophone audience, it looks like it just became too much.

We’ve been here before. Before Videotron finally added AMC in 2013, it was among the most requested channels by subscribers. This was back in the day when AMC’s original series were very hot: Mad Men, Breaking Bad, The Walking Dead. Because of AMC’s contract requirements, Videotron had to add it to its most popular large packages — Anglo, Telemax and Mega — despite its high cost.

Five years later, AMC’s biggest shows are The Walking Dead, a Breaking Bad spinoff and Mad Men reruns. Not terribly impressive.

Does it make sense for Videotron to jump through so many hoops to keep this channel in their lineup?

For some customers, this will no doubt be a deal-breaker. Combined with the usual price hikes, they’ll jump ship to Bell, which still carries AMC. Videotron has taken that into account with its decision, and it still makes more sense to let AMC go.

And don’t think this is some negotiation tactic, either. AMC has all the power in this relationship, with a billion dollars in annual revenue and more than 90 million subscribers to its flagship channel in the U.S. It won’t care that much about losing a few thousand subscribers in Quebec. And besides, subscribers will blame Videotron for this, not AMC, unless Videotron says exactly what AMC was demanding, which it can’t because of confidentiality agreements.

Ideally, it wouldn’t have to be this way. In 2015, with its Wholesale Code, the CRTC made it illegal for broadcasters to impose abusive penetration-based rates or minimum revenue guarantees. But AMC is an American channel, and doesn’t have to answer to the CRTC. Though the commission said it “expects” foreign channels to abide by the same rules, and said it could use its powers to, for example, make authorization for distribution in Canada conditional upon accepting the same rules, it has yet to step in when it comes to a foreign channel’s distribution agreement.

(AMC Networks also owns IFC and the Sundance channel, but the versions of those distributed in Canada are actually Canadian channels owned by Corus, which must follow the CRTC’s rules.)

It’s unfortunate that it’s come to this. We’ll see if other Canadian providers decide they too are fed up with AMC. The same year Videotron finally added AMC, Telus was so annoyed by their negotiation tactics that it sued in a U.S. court, and negotiations with Rogers got so bad that AMC started a campaign aimed at Rogers customers. If enough of them reject it, and AMC risks being shut out of Canada, it might change its demands. But what are the chances of enough Canadian providers being willing to alienate their own customers?

Videotron customers can finally livestream TSN and RDS

The day we’ve been waiting years for has finally arrived: Videotron customers can finally stream TSN and RDS online and on mobile apps.

The news was just announced via text message. Not only can people watch both Bell Media services through the Videotron website and Illico app, but Videotron customers can also login through TSN.ca and watch the network there. And it’s available through the RDS Go app.

Both of these systems are authenticated, which means you need to be a subscriber to the channels you want to watch, and whether you’re watching through a Videotron platform or a TSN/RDS one, you need to login with your Videotron username and password when prompted. But otherwise there’s no additional fee for watching them online or on mobile (except mobile data charges if you’re using mobile networks).

But it means if you want to watch the Canadiens this season (and what a coincidence, their season starts tonight), you can finally do so on the go legally as a Videotron subscriber.

(For whatever reason, Videotron is offering livestreaming of only TSN2 and TSN5 through its platforms, but all TSN’s Canadiens games are on TSN2.)

Unfortunately, the deal doesn’t include Sportsnet, which still isn’t available this way. Maybe someday…

Options for watching TSN and RDS live

CRTC: Videotron’s Unlimited Music program is illegal

In a big step toward the principle of net neutrality, the CRTC today established policies about differential pricing of Internet data (both wireless and wired) and ruled that a Videotron promotion that offers free streaming of music from selected music streaming services is against the rules.

The Videotron promotion in question is called Unlimited Music, which it debuted in August 2015. And the way it worked was it reached agreements with several music providers like Spotify and Google Play and Apple Music and exempted that data from its data caps for premium data plans. People with those higher-end plans could stream as much music as they wanted and never worry about busting their data caps.

But even though just about anyone was invited to join the program, it wasn’t automatic. And radio stations were not invited to join in.

It took minutes for net neutrality advocates to say this was wrong. I literally came out of the press conference announcing it and was on the phone with the head of the Public Interest Advocacy Centre who immediately said it was against the rules. But it took a year and a half for the CRTC process to unfold to declare it so.

Videotron said at the time it believed that because it wasn’t giving undue preference to its own music service, that the program was legal. It was mistaken.

The CRTC’s decision not only makes Unlimited Music illegal, but any plan from any provider that treats data differently depending on where it’s going or what kind of data it is. So a plan that offered no data but free access to Facebook, or a plan that didn’t count email downloads toward the data cap, those are now illegal.

There are some exceptions. One is for administrative functions. If you’re checking with your provider how much data you’ve used up on your plan, that could be exempted from data charges. Another is for “content-agnostic” stuff, like charging different rates depending on different times of day. So long as everything on the Internet gets treated the same, it’s OK.

The commission also leaves the door open to other exceptions opening up, and providers applying for pre-approval of new ideas. CRTC staff tell me such applications would go through the usual application process.

Otherwise, the commission will use guidelines established in its policy to evaluate (after the fact, following complaints) whether a service or program is compliant. These include whether the pricing is offered only on certain data plans, whether any money exchanges hands with third parties, how exclusive the offer is for certain services or subscribers, and “impact on Internet openness and innovation.”

Under the CRTC’s analysis, Unlimited Music did not meet the criteria of agnostic treatment of data, lack of exclusivity, and lack of negative impact on Internet openness and innovation. And there were no exceptional circumstances to warrant an exception to the rules.

So Videotron has until July 19 to bring Unlimited Music into compliance with the rules. But there’s likely no way to do so, so expect it to be withdrawn.

To be clear, this decision relates to data pricing only. Promotions like Rogers offering free Spotify subscriptions to certain users are still legal. But Rogers must treat the data from Spotify like any other Internet data. It can’t exempt that data from its data caps. (And it doesn’t.)

UPDATE: Videotron says it’s disappointed in the decision, and will analyze it in the coming days to figure out how to respond. In the meantime, the Unlimited Music offer remains in effect until further notice, and it promises to keep subscribers up to date.

CRTC settles Videotron/RDS dispute, opening door to subscribers getting RDS GO

It’s not official yet, but a decision released by the CRTC this week will likely lead to Videotron subscribers soon finally getting access to RDS GO and being able to stream Canadiens games on smartphones, tablets and online.

The decision, released Tuesday, is what’s called a final offer arbitration between Videotron and Bell Media over the distribution of RDS and RDS2. The companies couldn’t come to an agreement over renewing the distribution contract, which expired last August, and so Videotron asked the commission to intervene.

In final offer arbitration, both parties present complete contracts to the commission, and it chooses one in its entirety (or, exceptionally, can refuse both).  This method of conflict resolution has the advantage of rewarding whichever side presents the most reasonable-seeming offer, and so encouraging both sides to be more reasonable in those offers.

In this case, the CRTC sided with Videotron, judging that its offer was better. The supporting documents in the case are heavily redacted to protect commercially sensitive information, so we don’t know any of the details of the contract, including what wholesale per-subscriber price Videotron will pay for RDS, what kind of volume discount it will get on that price, how long the term is or even how many RDS subscribers Videotron has.

But the documents do give plenty of insight into the relationship between Bell and Quebecor, and the tone of the many letters to the CRTC suggests there’s no love lost between these two organizations.

Videotron wants streaming

According to the documents submitted, Bell and Videotron managed to work out most of their differences on the new contract, including multiplatform rights, which Videotron has been trying to get a deal on since at least 2014. And it made it clear it sees these rights as essential:

Il est très important de souligner l’urgence de la situation puisque tant et aussi longtemps que le tarif multiplateforme n’est pas réglé, les abonnés de Vidéotron n’ont pas accès à ce contenu et sont désavantagés vis-à-vis les abonnés de Bell Télé. De plus, en retardant l’accès à ce contenu, Bell Télé continue de jouir d’un avantage concurrentiel important tout en désavantageant Vidéotron.

Though Videotron initially wanted to put multiplatform rights to arbitration as well, after failing to get the issue resolved in mediation in 2014, the companies solved that issue on their own, leaving only the wholesale price for the channels up to the commission.

With the CRTC’s decision, there’s now a new contract with RDS, one that includes multiplatform rights and will allow Videotron to meet new packaging requirements set by the CRTC to come into effect by Dec. 1.

So when do we get RDS GO?

Not quite yet, it seems. While the company told me in a statement that it’s happy with the decision and that there’s “agreement in principle” on multiplatform distribution, some aspects of the deal are still in discussion. “It’s impossible for us to make an announcement on this subject today,” the company said.

Hopefully this will be resolved by the time the Canadiens season begins again this fall.

Multiplatform distribution, and in particular “TV anywhere” apps, still have plenty of holes, particularly where they involve large vertically integrated companies. Few Bell services are available to Videotron customers this way, and few TVA services are available to Bell customers.

 

These issues will eventually be resolved as new distribution contracts are signed (in many cases probably involving a quid pro quo to avoid giving one distributor a competitive advantage), but they’re taking forever.

Because this deal concerns only RDS, it doesn’t affect distribution of other Bell Media services on Videotron (not even TSN). But hopefully this will help speed up discussions about getting those services on board as well.

The arguments

Since the CRTC arbitration in the end concerned mainly just the wholesale fee for RDS, the arguments presented by Bell and Videotron mainly concerned trying to set a higher or lower value on the channels. Though both offers increased the wholesale fee for RDS, Bell’s increased it more than Videotron’s did.

Much of those arguments centred on comparing RDS to TVA Sports, which of course is owned by Videotron’s parent company Quebecor.

Bell’s arguments for a higher fee included:

  • RDS maintains higher overall ratings than TVA Sports, even after losing national NHL rights.
  • RDS is more respected by viewers than TVA Sports.
  • RDS’s production and acquisition costs have increased dramatically.
  • Outside of hockey, RDS is by far more popular than TVA Sports, with many more marquee events.
  • Though Saturday night Canadiens games are popular, many more Quebec francophones are choosing to watch the games in English on CBC or Sportsnet than watch TVA Sports (they don’t say why, but this probably has to do as much with the fact that some people just don’t feel the need to subscribe to the channel as it may with people not liking its broadcasts).
  • Videotron is changing its packaging rules to come into compliance with the CRTC’s new rules. A higher per-subscriber wholesale fee should be expected when there are fewer subscribers.
  • RDS needs to compete not only with TVA Sports but with online sources of sports programming.
  • Bell’s offer is more in line with what other distributors in Quebec pay for RDS.
  • Videotron has done nothing in its packaging of RDS to warrant a “special discount”.
  • Videotron is treating RDS more harshly than TSN, because its goal is not fair market value but to punish RDS in order to support TVA Sports
  • Quebecor started TVA Sports and is aggressively bidding for sports rights, which is why RDS’s acquisition costs have increased so much in the first place

Videotron’s arguments for a lower fee (one closer to that for TVA Sports) included:

  • TVA Sports has higher peaks in ratings thanks to NHL playoffs and Canadiens Saturday night games
  • RDS has lost other important sporting events to TVA Sports, including some MLB, NFL, QMJHL and tennis rights
  • Bell offers RDS and TVA Sports at the same retail price, suggesting equivalent value to consumers
  • RDS lost a third of its ratings due to the loss of Saturday night NHL games, NHL playoffs, NHL special events and non-local NHL games
  • RDS’s subscriber revenues have already gone up considerably faster than its expenses, particularly jumping from 2011 to 2012, when it went from 44% of revenue to 62%. (This is mainly because until 2011, RDS’s wholesale rate was regulated by the CRTC.)
  • RDS’s profits continue to increase (though they were cut in half in 2014-15 after losing NHL rights).
  • There’s also RDS Info, which isn’t part of this contract but also collects subscriber fees while adding little original content
  • Television subscribers are already beginning to unsubscribe from some services or eliminate pay TV all together, citing cost as a major factor.
  • Comparing Videotron to other distributors in Quebec isn’t appropriate both because of Videotron’s high market power as a distributor and Bell’s high market power as a broadcaster. (Plus, of course, Bell TV is one of Videotron’s main competitors in Quebec.)

Comparing ratings is tricky, especially for this past season, since no Canadian teams made the NHL playoffs. TVA Sports’s overall numbers would have been much higher had that happened. There were a lot of other issues with arguments on both sides, and of course plenty of other arguments were presented that were redacted in the public documents.

The decision

The CRTC found Bell’s offer reasonable on several points, like packaging, volume discounts, and how it compares to other rates. But it found RDS could not justify the rate increase it wanted when you look at historical rates, which it found more relevant to this case.

The other factor that swayed the commission was the variability of the rate. Instead of a fixed per-subscriber rate, both offers proposed a scale where the larger the number of subscribers overall, the lower the per-subscriber rate. But the CRTC found that Bell’s offer was too flat, and “would have the effect of insulating the programming service from the impact of subscriber choice at an unreasonable level.” In other words, if people dropped RDS from their packages, Bell would see only a small drop in their subscriber revenue and Videotron would be forced to pick up an unreasonable amount of that loss.

As a result, the CRTC picked Videotron’s offer. This may be good news for Videotron subscribers wanting to get RDS, particularly as a standalone service, but more importantly good news for Videotron’s bottom line.

Videotron jumps onto Apple Watch bandwagon with kinda-useful Illico app

Illico Apple Watch app with shuffle function

Illico Apple Watch app with shuffle function

On Monday, I was among a half-dozen journalists invited to a demonstration of Videotron’s new Apple Watch application for the Illico digital TV system.

This app is, as far as anyone working for Videotron knows, the first of its kind. (Except for a similar one launched simultaneously by its main competitor.) It allows users with next-generation Illico TV terminals to control them using the watch. At least a little bit.

Jean-Pierre Gauvin, principal director of development and planning for Illico, said they wanted to start simple, and not try to replicate the features of the remote control onto a tiny watch app.

So instead, the app has two screens and two basic functions. The one the team seemed the most excited about was shuffle. By pressing a yellow button, the TV is commanded to pick a channel at random, from among those you subscribe to or from a preset list (sports, family, film, music, news, anglo, franco and HD only). It’s a function that doesn’t exist on other platforms, though the team is open to the idea of incorporating it if there’s client demand.

Mind you, when I asked about client demand for a shuffle function in the first place, they admitted there didn’t seem to be any.

Illico Apple Watch app with play/pause and skip functions.

Illico Apple Watch app with play/pause and skip functions.

The first screen of the app seems to me the one that will get the more use. It features play/pause button, and skip ahead/back buttons, similar to those that exist on remotes now.

I could see this actually getting use. For example, if you’re going to the kitchen and want to get something to eat, you can tap your watch to pause the TV.

But there’s a lot of stuff that’s missing from this app. There’s no way to tune to a specific channel directly. No record button. No channel up or down or volume adjustment function. No voice interaction. Nor can you actually watch video on the watch (not that too many people would want to do that). Even its main feature, the shuffle, can’t be set to a user-defined playlist.

Gauvin said they wanted to start with basic stuff, get the app out there, and then add new functions later. That’s fair.

“What’s important is hearing the feedback of our users,” he said. “We’re definitely going to add functionality.”

Videotron estimates it has maybe 1,000 or 1,500 users who have Apple Watches, so “it’s really for early adopters.” Those early adopters will expect a lot more functionality, and fast.

And they might get annoyed by the fact that what little functionality is there is buggy. The demonstration got off to a rough start when it seemed the watch lost its connection to the phone and didn’t work. Tapping the shuffle button often didn’t work, requiring another tap before it would change the channel. And despite their claims of instantaneous reaction, most of the time it took about a second for the tap to result in a change on the screen. The fact that the signal travels from the watch to the phone via Bluetooth, then from the phone to Videotron via WiFi/cable, then to the box through the Videotron network, explains the delay, but probably won’t satisfy users much.

I’ve yet to be convinced that the Apple Watch is anything but an expensive gimmick, but if you have one and you’re a Videotron subscriber with a compatible terminal, there’s no reason not to add this app.

The Illico Apple Watch app is available by updating the Illico app for iPhone in the Apple store.

Asked why this was developed for the Apple Watch and not other Android-based smart watches (such as the Samsung Gear), Gauvin explained that the closed Apple environment made development and testing easier. They’re looking at creating a similar app for Android.

See also

Videotron appoints advisory council for MAtv

Two weeks after the fact, Videotron announced today that it has met the March 15 deadline set by the CRTC in February to set up an advisory committee for community channel MAtv in Montreal. The commission made the requirement in response to a complaint that MAtv was not properly representing the community it serves.

The nine-person committee, which will serve in an advisory capacity but won’t be making the decisions about what goes on air, is composed of members of the arts, business and cultural communities, as well as a member of the English-speaking community, which presumably means we should start seeing English programming on the channel some time soon.

The members are as follows:

  • Fortner Anderson, English-Language ARTS Network (ELAN)
  • Éric Lefebvre, Director of Development, Quartier des spectacles Partnership
  • Annie Billington, Coordinator, Communications and Community Relations, Culture Montréal
  • Martin Frappier, Director of Communications, Chantier de l’économie sociale
  • Marie-Pier Veilleux, Director, Strategic Forums, International Leaders, and Special Projects, Board of Trade of Metropolitan Montreal
  • Cathy Wong, President, Conseil des Montréalaises (consultative body on gender equality)
  • Philippe Meilleur, Executive Director, Montreal Native Community Development Centre
  • Aïda Kamar, CEO, Vision Diversité
  • Vanessa Destiné, student, Université de Montréal; regional coordinator, Communautique; volunteer, MAtv

CRTC finds MAtv failed to fulfill its community TV mandate, denies additional funding for English-language channel

In a victory for those who feel community TV channels run by cable companies are using loopholes to get around the spirit of the rules, the CRTC has ruled that Videotron’s MAtv community television channel has not complied with its obligations, but will be given a chance to do so.

In short, the CRTC agreed with the complaint by Independent Community TV, an independent group that wants to replace MAtv with its own grass-roots service, that MAtv isn’t providing enough community access programming, and instead counting shows created and hosted by professionals as access programs.

It also found some programs MAtv counted as “local” aren’t specific enough to Montreal.

The regulations require community channels to be 45% access and 60% local, but found MAtv was, during a sample week studied, only 30% access and 39% local.

The CRTC held up an application for an English-language version of MAtv in Montreal as it dealt with this complaint. That decision was also released today, and it allows Videotron to start up the service but denies the additional funding necessary to do so.

Cable companies start community channels because the CRTC allows them to deduct that funding from the 5% of gross revenues that they must spend on Canadian programming (mainly contributions to the Canada Media Fund). The rules allow up to 2% of gross revenues to be used for a community channel. But recently the CRTC has been allowing some companies to deduct a further 2% to create a second channel in another language — Rogers has this in Ottawa, Moncton, Fredericton and Saint John, while Bell has this for its Bell Local service in Montreal.

But because of the non-compliance, and because it felt MAtv already had enough funding, the CRTC says Videotron must start this new service without any additional funding. That severely lessens the chances of it happening.

In addition to a general requirement to come into compliance by the time its licence is up for renewal in August, Videotron must establish a citizen advisory board for MAtv by March 15.

The commission notes that the community TV policy will be reviewed in the coming year, and presumably the discrepancy between Videotron and Bell will be addressed through that.

I have reaction from the parties in a story in the Gazette. La Presse also has a story, as does Le Devoir, with commentary from ICTV.

You can read more background on this issue here and here.

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Videotron adding TSN1, TSN3 and TSN4 after customer complaints

Two months after TSN expanded from two to five channels, and after a bunch of complaints from subscribers missing programming that didn’t air on TSN2 or TSN5, Videotron is joining all the other major TV providers in the country and offering all five feeds.

I wrote this story, which appears in Saturday’s Gazette, after a regional Senators game in Florida meant that Videotron customers couldn’t get the Monday Night Football NFL game on TV.

That problem, which generated a flood of complaints to both Videotron and TSN, has apparently pushed the former to move up the launch date of TSN1, which will now be added on Monday, in time for the next MNF game (even though that game will also air on TSN5, the main TSN feed in Quebec).

TSN3 and TSN4, whose main feature will be blacked-out Jets and Leafs games, and occasionally a different Premier League soccer match or college football on weekends, will be added on Oct. 29.

Some information for Videotron customers:

  • All five channels are free with TSN. And selecting TSN1-5 will count for only one channel in custom packages. So you won’t be paying any extra for these other channels.
  • All five channels will be in high definition. And they will be available in all regions.
  • The TSN channels will be moving to keep them together. Starting Oct. 29, they will be at 186-190 in SD and 786-790 in HD.
  • Analog subscribers will continue getting just TSN5, which includes regional Ottawa Senators games.
  • About the same time, TSN and RDS will be pulled from Videotron’s Illico TV mobile service. Videotron blames blackouts for making these channels less desirable. Though it is looking at alternatives.

For details, read the Gazette story or this previous post on TSN’s expansion.

CRTC approves making Videotron’s Canal Indigo bilingual as Viewers Choice PPV shuts down

Only 13 hours before Viewers Choice Pay-Per-View shuts down for good, the CRTC has approved an expedited application from Videotron to convert its Canal Indigo into a bilingual pay-per-view service to replace it.

The service would meet all of the regulatory requirements for bilingual pay-per-view systems, with one notable exception: Rather than adhere to a 3:1 ratio of English to French channels that is clearly designed for bilingual pay-per-view services operating in English Canadian markets, Indigo would reverse that ratio, offering four French channels for each English one, not including barker/preview channels. And it would offer at least two English channels. Videotron said in its application it planned to operate eight French-language and two English-language channels, which would fit its proposed ratio.

Since Videotron operates almost exclusively in Quebec, having more French channels makes sense for its pay-per-view service. The CRTC agreed, implementing the exception.

But it didn’t like the idea of reducing the number of channels that much. Indigo currently offers 11 standard-definition and three high-definition channels, while Videotron carries eight SD and one HD channel of Viewers Choice. Under Videotron’s proposal, the total number of PPV channels would drop from 23 to 10.

“So to maintain a number of signals comparable to that currently offered, the Commission requires that Indigo offer at least 3 English-language signals. With this minimum of English-language signals, Videotron must offer at least 12 French-language signals to meet the ratio. Accordingly, Videotron will be able to maintain a level of service comparable to that currently offered by its French-language service.”

(This whole system seems to be unnecessarily rigid. It’s one thing to impose minimum ratios to protect minority-language markets, but the ratio as it’s worded isn’t just a minimum, but a maximum as well. And setting a minimum number of English channels on top of that means the CRTC has imposed a minimum of 15 channels for Videotron’s pay-per-view service.)

English channels could start “very quickly”

The CRTC’s alteration of Videotron’s application is a bit of a curve ball. Videotron had already begun trimming Indigo, taking away six of its 11 SD channels. With this decision, it will need to start four of them back up (or start up four new HD feeds).

But adding English service to Indigo won’t take that long, Videotron president and CEO Manon Brouillette told me. For movies, “we already have all the rights in English,” she said. It’s just a question of getting deals done for PPV events like wrestling and UFC events. But “it wouldn’t be that complicated.”

With the rise of paid video-on-demand services on digital cable, the appeal of pay-per-view for events that aren’t live has diminished significantly. “When we look at the tendencies of consumption of cinema, it’s much more on demand,” Brouillette said. “So the Indigo channels, the rate of orders is not very high, it’s a segment in decline.”

“The potential for us, and the reason the channel is doing well financially, is because of events, sports, concerts, etc.”

Brouillette pointed to the Quebec City amphitheatre, which Videotron has a management contract for once it opens next year, with everyone hoping it will one day be home to an NHL team.

“There won’t just be sports in this theatre,” she said. “There will be concerts, events. We’d like to broadcast live shows on Indigo like we did for Céline Dion (on the Plains of Abraham in 2008). It’s an event channel.”

Videotron has a bit of time to get its English service running. It’ll be about three weeks until the next major UFC and WWE pay-per-view events.

Viewers Choice goes out with a whimper

There’s no big fanfare for the end of Viewers Choice, which began in 1991 and is being replaced by in-house services run by Bell and Rogers. On its straight-from-the-90s website, a simple notice is posted:

Dear Viewers Choice Customers — As of September 30, 2014 Viewers Choice Pay Per View will no longer be broadcasting.

Thanks to all of you for allowing us into your homes for so many incredible events and making the last 23 years successful and memorable

Sincerely, The Viewers Choice Team

The service’s programming will go dark starting around 10:30pm, and the last movies will end at midnight. Those final movies include Winter’s Tale, The Quiet Ones, The Grand Seduction, The Other Woman, Rise of an Empire and, of course, porn.

UDPATE (Oct. 23): Videotron has re-applied to the CRTC to reduce the minimum number of channels from three English channels to two (and hence French channels from 12 to 8). It argues that information the commission used in its decision was erroneous. The CRTC quoted Videotron’s website saying there were 14 French-language Indigo channels, but in fact there were only eight in use. This new application is open to comment until Nov. 21.

 

CRTC: Videotron doesn’t have to distribute ICI on analog cable

In what would be a precedent-setting decision if anyone was still launching over-the-air television stations, the CRTC has decided that Videotron does not have to make room on its analog cable TV service for ICI, the ethnic television station that launched in Montreal last year.

The TV distribution regulations require distributors to include local television stations, which would normally mean that Videotron must distribute ICI in analog and digital to subscribers in the Montreal area. But Videotron is in the process of phasing out its analog cable system to make room for more digital channels and more bandwidth for video-on-demand and Internet service.

Videotron told the CRTC that fewer than 7% of its Montreal residential subscribers are still on analog cable, though that number is higher if you include institutional customers like hotels and hospitals, and those residences that have digital and analog on different TVs.

Quebecor had argued that the CRTC’s recent decisions to allow analog to continue its decline, by not licensing any new specialty channels for analog TV, for example, makes it clear that the transition to digital is more important than squeezing in another analog channel which would only disappear within a few years anyway as the analog network is dismantled.

ICI argued against the application, saying it would “result in ongoing and serious harm to ICI,” which is still struggling to develop an audience:

It has become apparent to ICI since its launch that ICI’s potential audience frequently consists of individuals that subscribe to Vide?otron’s “Classic Cable” service, which is the analog service. These potential viewers do not currently receive ICI. Vide?otron’s decision not to distribute ICI in accordance with the Regulations in not in the interests of subscribers as Vide?otron suggests. These subscribers would need to pay more to receive ICI, and make the transition to a more expensive digital service far ???sooner than they might otherwise choose – and even while many other services continue to be offered on an analog basis.

ICI pointed out that Videotron’s analog service in Montreal, which is much smaller than it used to be, still carries many U.S. signals, including two PBS stations.

And it said that while 7% may be small, it is still significant for a station that relies solely on advertising for revenue, and the fact that Videotron is still offering an analog service means it does not view this number as trivial.

It also said at least one program producer “decided not to purchase airtime on ICI due to the fact that the members of the target audience and multiple advertisers have advised the producer that they cannot receive ICI on their cable service.”

Videotron countered that it has received no requests from analog clients to get access to ICI, and its contractual obligations prevent it from removing other channels from analog.

In the end, the CRTC sided with Videotron, judging that its interpretation of the commission’s intention to encourage the phasing-out of analog cable is correct. It also cited the lack of opposition from people unconnected to ICI, as well as the substantial assistance the station is receiving from Rogers as a result of the sale of CJNT, in its decision.

Videotron has already begun the process of shutting down its analog network. After dismantling the network in Gatineau, it has started in Montreal with the Ahuntsic region.

Cooperation, not acquisition, might be better option for Quebecor

Put simply: Under the right conditions we are ready, willing and able to become
Canada’s fourth wireless competitor.

With that statement two months ago, new Quebecor CEO Pierre Dion launched a campaign to create fertile ground for his company to expand its wireless operation nationally, and become the fourth national wireless player that the Conservative government has been so desperate to see arrive.

Quebecor’s main issue is roaming — the fees it has to pay other carriers when its subscribers use their networks. Until it can build a national network that rivals those of the Big Three in coverage (something that would take several billion dollars to do), it would have to offer its subscribers access to someone else’s network, and at fees that would still allow it to undercut those networks’ operators on prices.

The CRTC is holding a public hearing in September on wholesale wireless services that should address this issue. The commission will try to determine if the market is sufficiently competitive and if not, what it can do to fix that. Quebecor would like low, regulated wireless wholesale rates, particularly for data. Bell, Telus and Rogers, needless to say, aren’t in favour.

And just two weeks ago the commission slapped Rogers on the wrist for exclusive roaming deals that it determined were anti-competitive.

Quebecor’s hand

At the moment, Quebecor’s network covers populated areas of Quebec and the National Capital Region. It also has a deal with Rogers that allows Videotron customers to use Rogers’s network where necessary. A year ago, the companies signed a 20-year agreement to build a shared wireless LTE network in Videotron’s existing territory.

The thought of Videotron becoming a national player took off in February after it purchased licenses in Quebec, Ontario, Alberta and British Columbia for $233 million. Because the big three were limited in the amount of spectrum they could buy, and new players like Wind and Mobilicity didn’t have the financial means to spend that kind of money, Videotron got a deal it simply couldn’t pass up. The licences could be worth a lot more than that, even with the limitation that they can’t be sold to Bell, Rogers or Telus.

The rest of Canada is split up between other regional players: MTS in Manitoba, SaskTel in Saskatchewan, and Eastlink in Atlantic Canada and Northern Ontario. They also got good deals on spectrum because those frequencies were reserved for smaller players.

So even if Videotron wanted to become a national player, it would need to team up either with one of the big three or all of these smaller providers. Plus building out networks in Ontario, B.C. and Alberta.

It has been suggested very openly that Videotron would be interested in buying either Wind Mobile or Mobilicity (or both) to instantly get a foothold in Ontario, B.C. and Alberta. This is important because next March will see another spectrum auction from Industry Canada, and its rules reserve licences for operators other than the Big Three that are already operating in those territories. Unless Videotron sets up its network in the next six months, it’s bidding potential is limited. But acquire Wind and/or Mobilicity, neither of which have the capacity to participate in the auction, and Videotron can make another government-assisted investment.

Except Videotron doesn’t have enough cash for such an acquisition. So it would need some source of money to step up to help it. And the clock is ticking.

Politics

But spectrum licenses and cash aren’t the only impediments to Videotron’s wireless expansion. Even if it develops a decent network, Videotron has no other infrastructure in the rest of Canada. It can’t bundle wireless with cable TV and Internet like it does in Quebec. It can’t leverage its brand, or set up Videotron corners in Archambault shops in the rest of Canada.

And then there’s the politics. Pierre Karl Péladeau is still the controlling shareholder of Quebecor and Videotron. And he’s not willing to put his stake in a blind trust until he becomes a minister (and even then it would come with an order not to sell the company). So the federal government’s best hope for a company that would give a shot in the arm to competition in wireless is one owned by a devoted separatist. It’s not exactly the kind of company the government would want to bend backwards to help. And that’s saying nothing about consumers who might see switching to Videotron as tantamount to funding Quebec separation.

Cooperation

But maybe there’s another way. What if, instead of buying Wind and Mobilicity outright, it partnered with one or both, giving them enough cash to participate in the March auction and allowing their subscribers to use each other’s networks seamlessly? For that matter, why not do the same with MTS, SaskTel and Eastlink? Imagine a national wireless player made up of regional players, all with the same problem of national roaming. It would take less cash than one company gobbling up the others, and avoids the problem of having to deal with Quebecor’s not-so-great brand outside of Quebec.

There are other possibilities, too. Shaw, which is active in B.C. and Alberta and has a lot of money but doesn’t have a wireless network, could become involved, and partner with Wind or Mobilicity or Videotron to offer a wireless service they could bundle.

Perhaps it’s just pie-in-the-sky dreaming, and I’m sure people will point out a bunch of practical problems with these ideas that would make them unrealistic. But if Ottawa really wants a fourth wireless player (even though experience in other countries suggest the market might not be able to support more than three), this sounds to me like a way to get there.

Of course, it would require Quebecor playing nice with others and swallowing a lot of humble pie.

Videotron applies to CRTC to make Canal Indigo pay-per-view bilingual

Less than a week after Bell Media formally announced that Viewers Choice pay-per-view would be shut down on Sept. 30 (though about a month after it was privately informed of the decision), Videotron has applied to the CRTC to modify the licence of its own Canal Indigo service to make it bilingual.

The application, which can be downloaded here but doesn’t say much more than it wants to make the service bilingual, is open to public comment until Aug. 21 (comments can be submitted here). Since pay-per-view services are now subject to standard conditions of licence, it’s unlikely the CRTC will oppose the application.

The only sticking point might be language. Currently the CRTC’s standard policy regarding bilingual pay-per-view services sets a ratio of 1:3 of French to English services

17. Finally, licensees of bilingual PPV services, in addition to being subject to the requirements for English- and French-language PPV services, must ensure a ratio of 1:3 French- to English-language channels in markets where a bilingual service is offered, with a minimum of five French-language signals as well as the French-language barker channel.

As Videotron points out, this ratio makes sense in English Canada, where special protections are needed to ensure francophones have access to PPV services, but they don’t make much sense for Videotron, which operates almost exclusively in Quebec. Instead, Videotron proposes a 4:1 ratio of French to English, with eight French channels and two English ones.

Videotron currently distributes 11 standard-definition and three high-definition Canal Indigo channels, and eight standard-definition and one high-definition Viewers Choice channels.

The application makes it clear that Videotron plans to go in-house to replace Viewers Choice rather than seek another provider of pay-per-view services. Bell and Rogers said it would work with other providers carrying Viewers Choice to ensure they would be provided with another service.