US networks threaten to go online to avoid pick-and-pay cable

AMC and A&E Networks have submitted comments saying they are weighing OTT options should the CRTC move forward with unbundling.
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Phil Lind, vice chairman and EVP of regulatory at Rogers Communications, during the recent Let’s Talk TV hearings warned the CRTC that major US networks like A&E and AMC may pick up their marbles and leave the Canadian TV ecosystem altogether if cable unbundling was introduced.

“It’s a very important part of our undertaking that we sell to our customers,” Lind said during a recent appearance about offering popular TV shows like The Walking Dead, which is produced by AMC.

Now that threat by American networks to bypass Canadian carriers and distribute popular US channels and programming via over-the-top video portals or SVOD platforms has come to pass.

Keith Murphy, SVP of government relations and regulatory counsel at Viacom, in an Oct. 3 final submission to the CRTC, said Canadian Prime Minister Stephen Harper saying he opposed taxing or regulating over-the-top services like Netflix had the US media giant eyeing the internet as an alternative to local cable and satellite TV carriers.

“Due to this lack of regulation, Viacom is seriously considering distribution in Canada through OTT or the internet as a possible solution if traditional distribution becomes uneconomical due to new rules being imposed by the commission,” Murphy told the CRTC.

A+E Networks (AETN), in its own final submission to the CRTC, said possible cable unbundling and making foreign services abide by the regulator’s vertical integration code to resolve disputes with local carriers had that US network also weighing OTT services to distribute its programming to Canadians.

“AETN’s primary concerns regarding the commission’s pick-and-pay and VI Code proposals are that the suggested changes introduce considerable uncertainty, increase risk and add new costs to doing business in Canada, all without the introduction of any new sources of revenue for programming services,” A+E Network president of distribution David Zagin wrote to the CRTC.

“AETN may be forced to change our current practices, including blacking out programming where the costs to clear Canadian rights are too high or possibly foregoing BDU distribution in Canada,” he added.

AMC Networks also complained to the CRTC that it had been side-swiped by the CRTC looking at requiring non-Canadian services to abide by the vertical integration code.

And AMC urged the CRTC to reconsider cable unbundling to guard against disruption to consumers and Canadian channels and popular shows.

“By bundling AMC and Space, countless Canadians were able to discover the now popular Space program Orphan Black, a pure benefit for the consumer,” the US broadcaster said in its Oct. 3 submission.

Canadian producers, in their own final submission to the CRTC following the Let’s Talk TV hearings, also urged the regulator to mitigate the impact of any cable unbundling on Canadian content production.

“We support consumer choice. Consumers are the audiences that watch our shows in Canada and abroad. But those audiences have diverse tastes and it will be harder to finance quality programs that appeal to their varied interests in an unbundled market,” Michael Hennessy, president and CEO of the Canadian Media Production Association, warned in his Oct. 3 filing to the CRTC.

Peter Bissonnette, president of Shaw Communications, urged the CRTC in his submission to be measured in its introduction of cable unbundling to “ensure that the transition to more pick-and-pay and more programming choice is implemented in a manner that avoids negative outcomes, such as job losses, diminished Canadian content, loss of Canadian and non-Canadian programming services, higher overall prices and less value to Canadian consumers.”

From Playback Daily