Sunday #1 - A fog of confusion
This week's CRTC hearings cap a month's cacophony of attack ads from both sides in the dispute. Cable Companies snatch TV transmissions from the airwaves, package them into incongruous bundles and then peddle them to TV owners who don't have TV towers, or want more TV channels than offered on the airwaves. The TV companies spend great gobs of money on US shows that are supposed to attract plenty of eyeballs, then those eyeball stats are sold to ad buyers who think that huge numbers of people are watching their ads. That was the model up to a few years ago.
Then came the diversity of interests produced by alternate media, and timeshifting with PVRs. Ad revenue started to slip for the TV companies. The TV companies also made boneheaded decisions to get bigger, financed the aquisitions with debt that the operating costs funded by ad revenue had to support and suddenly the once wealthy TV companies were struggling to get by on a couple of hundred million a year. The Cable companies, also ravaged by aquisition fever now found it uneconomical to support both their capital costs of getting bigger by building transmissioin networks and cannibalising themselves and also found themselves in a fight with the TV companies who want to charge the Cable companies for the transmissions that are free.
As a consumer how can you not be confused by the conflicting claims. There is a whole bunch of bad in this issue. Cable companies assembling their retransmissions into "bundles". These bundles are a mess and don't have an affinity of interest and also force the consumer to purchase many bundles just to get the few channels they want, thereby increasing consumer costs. TV companies claiming that unless they get more money local TV stations will be shut down. Oh what a mess.
Then in the middle of this is the regulator - the CRTC. This august body is at its wits end and the Chair has expressed his frustration with both sides often. He doesn't want to make the hard decision of making the consumer pay just because the two sides are intransigent.They have a mandate to protect the consumer and make sure that the players get along. So what's the answer? If I was the regulator this is what I would do.
Then came the diversity of interests produced by alternate media, and timeshifting with PVRs. Ad revenue started to slip for the TV companies. The TV companies also made boneheaded decisions to get bigger, financed the aquisitions with debt that the operating costs funded by ad revenue had to support and suddenly the once wealthy TV companies were struggling to get by on a couple of hundred million a year. The Cable companies, also ravaged by aquisition fever now found it uneconomical to support both their capital costs of getting bigger by building transmissioin networks and cannibalising themselves and also found themselves in a fight with the TV companies who want to charge the Cable companies for the transmissions that are free.
As a consumer how can you not be confused by the conflicting claims. There is a whole bunch of bad in this issue. Cable companies assembling their retransmissions into "bundles". These bundles are a mess and don't have an affinity of interest and also force the consumer to purchase many bundles just to get the few channels they want, thereby increasing consumer costs. TV companies claiming that unless they get more money local TV stations will be shut down. Oh what a mess.
Then in the middle of this is the regulator - the CRTC. This august body is at its wits end and the Chair has expressed his frustration with both sides often. He doesn't want to make the hard decision of making the consumer pay just because the two sides are intransigent.They have a mandate to protect the consumer and make sure that the players get along. So what's the answer? If I was the regulator this is what I would do.
- Establish that both parties are at fault, because of bad business decisions and tell them their is still enough money in their bottom lines to support themselves.
- Tell the Cable companies to stop bundling and establish a price per channel and allow consumers to purchase individual channels.
- Acknowledge that there is an obligation for the Cable companies to pay for their channels from the sky and not to pass the fees they will have to pay to consumers.
- Mandate a higher level of Canadian content in the TV companies programming so that they would have less airtime to fill with their expensive American shows.
Now this list comes from a not so ignorant consumer, but one who is still confused by the issue, so please comment on this and perhaps we can prepare a consumers' response to the issue.
2 comments:
I agree with your 4 points.
For decades the Cable TV companies have been resisting your point #2. Charge per channel and let consumers assemble their own a la carte bundles. It is what I want.
The CRTC is complicit in this resistance to your point #2. They have analyzed that new channels will not get off the ground unless they piggyback on more established and popular channels.
So, it comes back to the same back and forth that is the core of the discussion about the current recession: capitalists are all for the free-market system until they stop making exhorbitant profits and then they are all for government intervention, bailouts and regulation that the consumer should pay or the consumer should pay more. I would not mind at all letting the free market determine the outcome of this Network / Cable company war of words. At the very least, it would "clear the decks" a little.
It is curious how the option of unbundling so that the consumer can choose what he wants to pay for has had very little discussion. I have written suggesting this (and that, in return, I would be willing to pay for local programming) to both the Globe and the Star and neither has published my letter. Do they both have connections to cable or satellite companies?
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