CRTC rules Bell TV unfairly packaged TVA Sports

So Quebecor was right all along.

Kinda.

In a decision published on Thursday, the CRTC ruled that Bell TV unduly showed preference to its related channel RDS to the detriment of competitor TVA Sports by choosing to put the former in its most popular package in Quebec, but not the latter.

It gives Bell until Feb. 5 to tell the commission how it will rectify the situation. The two obvious options are to either add TVA Sports to the package, or take RDS out of it.

Like most TV providers, Bell offers discretionary channels on an à la carte basis, but most people have them as part of larger packages. With Bell, these larger packages are organized in tiers: Good, Better and Best in English, and Bon, Meilleur and Mieux in French. The data show that the lowest-end package of that group is by far the more popular. In Quebec, about 90% of subscribers with one of these packages has the “Bon” package, which has RDS but not TVA Sports.

Bell had argued that its contract with Quebecor only required TVA Sports to have similar packaging to RDS2, and that even that clause doesn’t apply anymore. Quebecor, meanwhile, argued that TVA Sports has greatly transformed since it launched in 2011, and is now on par with RDS, particularly since it picked up the national rights to NHL games.

The CRTC sided with Quebecor, and said “Bell deprived TVA Sports of a significant number of subscribers and several millions of dollars per year of subscription and advertising revenues, resulting in a significant loss of income.”

Quebecor’s back-of-the-envelope calculations suggested that if Bell TV treated TVA Sports the same as RDS (including paying the same per-subscriber rate), TVA Sports would not be in deficit. The rate isn’t part of this decision, but rather was decided as part of final offer arbitration in a separate case (Quebecor is mad about that one too, since the CRTC sided with Bell).

This apparent unfairness was the major reason Quebecor decided in April to cut the TVA Sports feed from Bell, until ordered by the court to re-establish it.

We’ll see what Bell does to rectify the situation. Quebecor would obviously prefer more subscribers to TVA Sports, but Bell could choose to take RDS out of the “Bon” package instead, especially if it can get away with grandfathering those who already have it.

Bell complaint dismissed

In a separate decision also released Thursday, the CRTC also sided with Quebecor in a case over packaging of Super Écran on Videotron. The decision, in response to a Bell complaint, found that Videotron did treat Super Écran differently from Quebecor’s own Club Illico when it removed Super Écran from the “Premium” group of channels, but that there was insufficient evidence that Super Écran suffered financially because of it.

Videotron’s pick-your-own-package model, which is the main way they’re selling TV services these days, invites customers to choose a certain number of channels. Separate from that are “Premium” services that cost more. Most Videotron packages allow one or two “Premium” selections from a list of services, that used to include Super Écran and The Movie Network (now Crave), plus Super Channel, the over-the-top service Club Illico, and a package that includes FX, AMC and U.S. super stations.

Videotron removed Super Écran and Crave from the “Premium” offer after Bell increased its per-subscriber fee. It argued it was just too expensive to continue to be a throw-in like that. Instead, you have to search under “other specialties” to find them among the ethnic channels and pay an extra $17 (Super Écran) or $20 (Crave/HBO) a month.

The decision seems to suggest the issue could be revisited if Bell can prove there was significant financial impact on Super Écran as a result of this change.

One thought on “CRTC rules Bell TV unfairly packaged TVA Sports

  1. Dilbert

    The CRTC created the mess, and they seem to have little long term interest in fixing it. Perhaps that’s in some way related to the relative short terms for the CRTC members.

    The problem remains simple: Bell, Videotron, Rogers, et al are all both creators and distributors, most with either monopoly businesses or duopoly business models. Bell wins when Videotron loses. Videotron wins when Rogers loses. Rogers wins when Bell loses. Each one has a vested interest in making it slightly harder or slightly more expensive for the others to gain distribution in their walled garden markets.

    It’s especially important when you realize that many of the cable channels get the majority of the income from subscribers, and not advertising. So controlling the gateway for the consumer is big not only as a distribution company, but in feeding your cable channels with more subscriber dollars.

    My feeling is that cable companies (IP TV, etc) should be mandated what they must carry, the way it must be packaged, and the rates that they must pay for it. Differential for these companies should be customer service and quality of product, and nothing else. Consumers should not be held hostage from one or the other because they don’t feel like playing nicely with each other.

    The CRTC has way too short term of a view on these things, and will never move to fix the basic problem of vertical integration.

    Reply

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