Failures

by Karl Bode


Filed Under:
a la carte, canada, hidden, tv

Companies:
bell, rogers, shaw



Canadian Cable Companies Make A Mockery Of Government's Push For Cheaper TV

from the forced-innovation dept

So far, the Canadian government's attempt to force innovation and lower prices on the Canadian TV industry doesn't appear to be going so well. As previously noted, the government has demanded that all Canadian cable TV operators begin offering a so-called "skinny" bundles of smaller, cheaper channels starting this month, and the option to buy channels "a la carte" starting in December. But this being the cable industry, companies are finding all manner of ways to tap dance over, under and around the requirements.

Bell's solution is to offer a skinny bundle, but hide it from the company's customers. And while most Canadian operators last week unveiled discounted base bundles starting at around $25, they've saddled the options with all manner of fees to ensure that once a customer actually gets their bill, their prices remain as high as always. DVR rental fees, home gateway rental fees, HD fees, "digital service fees," fees for additional channel packs (since the core pack is intentionally left sparse), and installation fees all quickly demolish any proposed savings.

And companies like Rogers have generously gotten ahead of the December requirement for individual channel purchases, by offering sports channels a la carte -- but at the rock-bottom price of $18 a piece:
Ahead of the Canadian rollout, major cable operator Rogers Communications began offering two sports add-ons — TSN and Sportsnet — at $18 each, bringing a sports fan's bill to a minimum $61 a month, not much below the $66 a month for a similar sports-included package that has 230 more channels.
The same thing is happening over at Shaw, where customers will be paying a pretty penny to nab the channels they actually want:
Prices for Shaw’s pick-and-pay channels, which include A&E, CNBC and Fox News among others, range between $3 and $5 per month. More popular channels, like AMC, Bravo and CNN, are only available if you purchase them in $6-$8 channel bundles. Premium movie channels, meanwhile, are priced at $18 per month.
So a move that the CRTC insisted would usher in an "era of choice for Canadian television viewers," appears to be doing nothing of the sort, with most of the bundles designed specifically to make them as unappealing as possible. One Bell employee tells the CBC the company's intentionally making the new bundles "unbuyable," while "just sort of giving the CRTC the finger." And while Canadian Law Professor remains optimistic that the CRTC's gambit will work, it remains unclear precisely when or how this is supposed to happen.

Granted it's early, but whether or not the CRTC's push for flexible options actually works will depend largely on whether the regulator is willing to call the industry's bluff on below-the-line fee shenanigans, something North American regulators as a whole aren't known for. And as with the attempt to disrupt the lowly cable box here in the States, one's left wondering if it doesn't make more sense for regulators to give up on trying to "fix" a TV model that's slowly-but surely dying, and focus any serious regulatory efforts on making sure there's broadband competition so that these same companies can't use usage caps to hinder Internet video competition.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 16 Mar 2016 @ 1:59pm

    Wondering

    Those bundles include specific channels i.e. quote
    "Prices for Shaw’s pick-and-pay channels, which include A&E, CNBC and Fox News among others, range between $3 and $5 per month. More popular channels, like AMC, Bravo and CNN, are only available if you purchase them in $6-$8 channel bundles. Premium movie channels, meanwhile, are priced at $18 per month."

    So I am kind of curious if those prices are in the quoted case Shaw's fault or the fault of the channels for demanding a high price`which makes the whole thing rather unattractive?

    reply to this | link to this | view in chronology ]

    • icon
      Colin (profile), 16 Mar 2016 @ 4:46pm

      Re: Wondering

      I'm with Shaw Satellite and I can tell you that the individual channel prices have gone up by around $1 per month so that is clearly attempting to profit, but the channel bundles have always been $6 to $8, so I guess you could probably conclude that most of the price you are referring to is due to the channel demands.

      reply to this | link to this | view in chronology ]

  • icon
    Mattheus (profile), 16 Mar 2016 @ 2:19pm

    Governments cannot induce innovation. Any attempt to force companies to offer what government bureaucrats think consumers want is going to always be met with evasion - this is natural, and frankly, a good thing in almost all industries. The businesses themselves need to be the ones to compete on innovation, and when there is market pressure for it, they will do so.

    That said, the telco and cable industry is very corporatist, very regulated, and they have essentially purchased all the right people to make sure they can maintain their illegitimate monopoly (like how AT&T wrote the regulation in various US states). This is creeping fascism; the State should not have nearly as much control and "oversight" as they do in the cable/internet provider industry. They've more or less become like public utilities which have no interest in innovating and are rife with inefficiency. So while I cannot endorse any government passing laws to force companies to better their products, I can't help but imagine the counterfactual scenario we could be enjoying if the telco/cable industry weren't dominated by stifling laws and anti-trust regulation.

    http://www.businessinsider.com/historical-price-trends-for-tech-products-2015-10

    I'm going to go out on a limb and suggest its government regulation that explains the chart in the above article.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 16 Mar 2016 @ 4:47pm

      Re:

      Might I give you a simple reason as to why these companies are regulated so heavily. These companies own the network and the services provided over these networks.usually there is only 1 company in a certain area so the customer has no choice if they wish to transfer to another provider. Lack of competition is what gives these companies the power to stop innovation and hike up prices.

      The problem is easily solved if the network is treated like a utility and all content providers have access to a network and compete that way. Saves cost as there only needs to be 1 network and raises competition because content providers have to compete on the product they deliver without the monopoly of a network.

      Same problem with broadband and telco's who al invest in having their own network which is a waste of material resources/energy/maintenance but good for the wallet.

      reply to this | link to this | view in chronology ]

    • icon
      Geno0wl (profile), 17 Mar 2016 @ 8:06am

      Re:

      Comparing the price of Cable TV to other tech goods like PCs or printers is disingenuous.
      Cable TV relies on a constant stream of programming to function. Which in turn requires paying PEOPLE to constantly be performing monkeys for the moving picture box. Not to mention the constantly demand for innovation in DVR, on Demand, variety in programming/channels.. ect ect.
      It is easy to see why Cable has continued to rise in price.
      But you always could just....not pay it....

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Mar 2016 @ 2:25pm

    >So I am kind of curious if those prices are in the quoted case Shaw's fault or the fault of the channels for demanding a high price which makes the whole thing rather unattractive?

    No doubt, it is a deliberate pricing strategy by Shaw. If you can get the same channels in a collection for less, that is the only conclusion. See http://www.shaw.ca/bundles/

    "we're going to force you to take Food, HGTV, and National Geographic, Show Time and so on - even if you don't want them - so as to maximize what it costs to get the channels you want." Obvious strategy... maximize revenue.

    reply to this | link to this | view in chronology ]

    • icon
      jdub (profile), 16 Mar 2016 @ 3:57pm

      Re:

      Unfortunately the prices of the channels are not 100% controlled by the cable companies. They are purchased/licensed from the broadcaster, and in order to make up the money they have to price it accordingly by the number of viewers, as well as if they can insert their own advertising in to bring costs down. Its why they have bundles in which higher price channels are bundled with lower ones, to offset costs, and try and give the customer a better deal from their end, at the same time negotiating with the broadcasters on the other end to get these channels bundles and negotiate a lower rent.

      I'm not condoning the practice at all, but there are restrictions that the cable companies face from the broadcasters that are beyond their control from a licensing perspective

      reply to this | link to this | view in chronology ]

      • icon
        Whatever (profile), 16 Mar 2016 @ 8:09pm

        Re: Re:

        "Unfortunately the prices of the channels are not 100% controlled by the cable companies. They are purchased/licensed from the broadcaster, and in order to make up the money they have to price it accordingly by the number of viewers,"

        Sorry, but in Canada, the sports channels are also owned by the cable companies. So they have full control. They are setting the price high because they want people to keep the packages so they can claim a huge subscriber base for channels nobody ever watches.

        reply to this | link to this | view in chronology ]

        • icon
          jdub (profile), 17 Mar 2016 @ 6:59am

          Re: Re: Re:

          They still have to pay for licensing to the sports leagues to broadcast. Just because they own the channel doesn't mean that their free to film, and broadcast every sports game. The league still requires them to pay. Its this licensing I'm referring to.

          reply to this | link to this | view in chronology ]

        • icon
          jdub (profile), 17 Mar 2016 @ 7:03am

          Re: Re: Re:

          The NHL and rogers media deal was 5.2 billion dollars. How do you think Rogers is going to try to recoup those costs over the 12 year deal?

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 16 Mar 2016 @ 3:59pm

      Re:

      I think by december every channel is suppose to be available as a single pick and pay.

      reply to this | link to this | view in chronology ]

  • icon
    Rapnel (profile), 16 Mar 2016 @ 2:47pm

    I hate to keep beating a horse that simply will not die but the unholy alliances of media (including govs, if you like) have not, can not and never will "innovate". Hell, they can barely adapt and when they do adapt it's through crushing anything in their paths any way they can.

    When the price of oil is high pirates have a go at it anywhere they can and when it's not pirates move on to more lucrative things.

    Stop piracy - align your senses of entitlement with reality

    And fuck cable. It's high-time we swap roles.

    reply to this | link to this | view in chronology ]

    • identicon
      suomynonA, 17 Mar 2016 @ 2:31am

      Re:

      "And fuck cable. It's high-time we swap roles."

      So you want cable to do WHAT again?

      EUWWWW, you've been watching too much anime tentacle porn. May I suggest something nice and calming, like the anime Corpse Party?

      That'll take where the sun don't shine" and put it in a slightly different perspective. The endings' nice though, when they get back at least they're still holding hands.


      (Or do I misunderstand what we're talking about here?)

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Mar 2016 @ 3:10pm

    and just like in the USA, this boils down to politicians preferring to get kick-backs rather than doing their damn job, looking out for the interests of the people they supposedly represent!!

    reply to this | link to this | view in chronology ]

  • identicon
    JBDragon, 16 Mar 2016 @ 3:34pm

    What you have is Government created Monopolies. So of course nothing is really going to change. Without real competition, The free market and capitalism doesn't work.

    I decided not to play these games and just cut the cord and threw up a large Antenna. I've been free for 4 years and saving a bundle of money. I sure don't need 200+ channels of crap. The few channels most people want are in the much larger channel bundles almost forcing you to pay for all that garbage. I'd just rather not play that game. What I don't watch, I don't miss. I still have a ton of content to watch.

    I didn't expect anything less from these company's. They'll find any and all loopholes to screw the customer over.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Mar 2016 @ 5:12pm

    ESPN Pricing

    I posted anonymously, and here's why:

    I know that cable companies pay $3.78 per customer for ESPN channels, and they are the highest, with some channels as low as $ .03 per customer, and averaging $ .22 per customer.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 17 Mar 2016 @ 10:24am

      Re: ESPN Pricing

      "I know that cable companies pay $3.78 per customer for ESPN channels"

      And that sort of thing was one of the reasons I ditched cable TV a decade or so ago.

      reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 16 Mar 2016 @ 8:17pm

    Here's the thing: Canada's broadcast world is effectively a octopoly (or whatever you would call it based on the number of players) of vertically integrated companies that own everything from one end to the other.

    BCE (aka BEll) (sat tv, fibeTV, phones, etc) owns the biggest TV network, all of it's local affiliate stations, the biggest sat distribution company, the only real IP TV option, the local and long distance phones for a big part of the country, the major sports network, two of the biggest hockey teams, arenas, newspapers, radio stations... it's a long list:
    https://en.wikipedia.org/wiki/BCE_Inc.

    You can see the Canadian media ownership chart here: http://blog.fagstein.com/media-ownership-chart/ (and yes, Fagstein has a great blog about Canadian Media, Karl should read it more often!).

    When you realize that the left hand and the right hand are from the same body, it's easy to see why pricing is as it is. There is no true competition, mostly coop-etition as each company gives the other enough space and enough income to profit.

    If you understand that, you will understand why the posts here are sorely lacking in context.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: I Invented Email
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.