Canadian Cablecos Dodge Government Demand For Cheaper TV Bundles — By Hiding Them From Consumers

from the compliance-tap-dance dept

This week, the Canadian government will begin forcing Canadian cable operators to provide cheaper, more flexible cable TV packages. Under the new CRTC rules, companies must provide a so-called “skinny bundle” of discounted TV channels starting March 1, and the option to buy channels a la carte starting December 1. But while the CRTC’s attempt to force innovation on the cable industry may be well-intentioned, it’s already clear that Canadian cable operators plan to do everything in their power to tap dance around the requirements.

One of the tricks, apparently, involves companies like Rogers and Bell simply refusing to seriously advertise the new options to consumers. A Bell training document leaked to the CBC clearly tells employees that they shouldn’t even bring up the option unless the customer asks:

“The Bell training document states: “Do not promote the Starter TV package. There will be no advertising, and this package should only be discussed if the customer initiates the conversation.”

In addition to refusing to advertise the new options, Bell and Rogers employees tell the news outlet that the packages are saddled with a large number of below-the-line fees, so that what appears to be a bargain is anything but once Canadian consumers actually get their bills:

“The Bell document also shows that add-ons to the basic “Starter” pack can become so costly that what was supposed to be a good deal for Canadians could wind up, in some cases, costing more than their current cable bill…”They’re making the skinny basic package simply unbuyable,” he said. “What’s been explained to me is that maybe one per cent of people would be interested in getting it.”

So whereas the new option may be advertised (barely) as a discounted tier, once you saddle the tier with restrictions, fees, hardware rental charges and other below-the-line surcharges, consumers won’t be getting much of a deal. And, unless the CRTC is willing to police each and every bill and force total pricing transparency on misleading fees (which neither the FCC nor CRTC have much of a history with), the entire effort risks being for naught.

The other problem is that even if cable operators are forced to offer better, cheaper, TV options, they’ll just turn around and recoup any lost revenue on the broadband side of the equation. In Canada, that historically has involved hitting uncompetitive broadband markets with usage caps and overage fees — just like Comcast’s efforts here in the States. Given the TV sector is ripe for disruption from Internet video either way, it may make more sense for regulators to focus their attention solely on boosting broadband competition, letting traditional, expensive television continue its slow but steady death spiral.

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Companies: bell, rogers communications

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Comments on “Canadian Cablecos Dodge Government Demand For Cheaper TV Bundles — By Hiding Them From Consumers”

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Anonymous Coward says:

Re: Re: Re:

I’ve been using OTA and streaming video since before the turn of the century (supplemented with VHS/DVD from the libraries and rentals), and still manage to stay well within the 150GB data cap. And if I go over? Another 50GB of data is STILL CHEAPER than the next tier, and I only have to pay the fee for a single month.

Hunting down live streams? What sort of live streaming are you watching? If it’s sports, just go to the local pub to watch your games; it’s more fun with friends. For everything else, waiting a day isn’t going to kill you, and WILL save you $100/month.

Anonymous Coward says:

Screwed any way

So, it doesn’t matter…

Keep your current cable package – you’re screwed with the package cost.

Change to the Starter TV package and you’ll get screwed below the line.

Cancel cable and stream all of your entertainment – you’ll be seeing data caps so you can’t watch all you want and price hikes from your streaming entertainment company once your internet provider starts charging THEM for your data – sorry, you’re screwed.

So, just shut up and enjoy how you’re being screwed out of your money.

JBDragon says:

Re: Screwed any way

This is why when I cut the cord, I installed a nice large Antenna where I get most of my TV, ABC, CBS, NBC, FOX, CW, PBS in HD and 5.1 surround, plus AntennaTV, MeTV and others. All Legally FREE and doesn’t cost me any bandwidth at all. I can use my Data to the CAP for other things.

These company’s will figure out a way to screw you over one way or another. You then have to start thinking if it’s worth it? Do you really NEED it? Maybe less TV is a good thing!!! Go read a book or play some video games and less TV. GO out and see your friends or make some friends.

Forget these so called Skinny bundles which are a rip off anyway for the number of channels you get for the price you’re paying before they throw on all these add-on’s. Why play their games, just get out of the game.

Anonymous Coward says:

Re: Re: Screwed any way

This was precisely what I did. I could no longer justify the expense for PPV by what I was looking forward to seeing. Programming then was going to crap and hasn’t gotten any better since. The OTA I did not go to. Instead I got rid of my TV. I can not tell you how much more peaceful it is not hearing all those blaring tv commercials. I don’t HAVE to have PPV. I don’t HAVE to pay expensive PPV fees.

Instead I now read books, play video games, and dabble in 3D graphics that the time away from the TV has allowed me to learn from the extra free time made available with it’s exclusion.

Miss TV? Not a figgin’ chance.

Anonymous Coward says:

Re: Re:

…Have price controls ever had their intended effect?…

The only case I can think of – and I’m not sure what resulted was the intended effect – was the US’ requirement in the 1960s that the Bell system (POTS phone service) reduce their price for residential phone service. The local telcos showed record revenues and profits the next year because they had more customers getting home phone service than they had the year before.

Whatever (profile) says:

Once again you miss the bigger picture of WHY, and it’s not to do directly with just keeping your cable bill high so the cable company makes money. They also want to discourage you from changing to the skinny package because the cable companies (such as Bell, Shaw, and Videotron) own the vast majority (read: almost all without exception) of the optional channels which have been jammed into packages to forcibly build their subscriber base. Many of the channels in Canada count subscriber fees through cable as almost their sole source of revenue.

If they sold the smaller packages, not only would their cable system revenue be lower, but also the money they would then pay on to their owned channels would diminish as well, causing the knock on effects.

A channel like MuchMusic (Canada’s MTV clone) has more than 10 million subscribers (insanely high number in a country with 30 million people). It’s highest ever ratings show somewhere around 10% maximum viewership, generally for their one big award / performance live show each year. Otherwise, they are typically pulling under 10,000 viewers per hour, with somewhere less than 5% of subscribers ever tuning to the channel for longer than a “surf past” moment. The station had done well in the past, but has lost more than a 1/3 of it’s national advertising sales. Since being profitable in 2009, the station has sunk and last year lost 4 million on income of under 40 million. While subscriber fees only account for about 10% of revenue, it’s a driver for everything else. A 20% drop in subscriptions which is quite likely with people moving to skinny would not only hurt that item, but would also lower ad income and the channels potential to reach enough viewers to be relevant.

When you look at the overall numbers, the potential is that a station like this could love upwards to 90% of it’s subscription base when you consider actual viewership, and the knock on effects would likely turns the lights out at the channel within a short period of time.

So the motivations not to sell skinny packages isn’t just cable company bottom line, it’s vertically integrated parent trying to keep milking the cow, even as the udder dries up.

Anonymous Coward says:

Re: Re:

Rule one of business in a free market is that you get paying customers or you go under. The way that some companies are leveraging their position in one market, data delivery, to protect another business, content creation and delivery, should be reason enough for governments to forcibly break up those businesses.

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