Corus to CRTC: more choice will ‘paralyze’ consumers

Corus took a largely anti-regulatory stance on Wednesday, arguing the broadcast system is working fine as-is, both from a revenue and customer satisfaction perspective. (Corus CEO and president John Cassaday pictured.)
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It may have been a long day but Corus Entertainment execs didn’t show it as they came out strongly against pick-and-pay pricing and the proposed skinny basic options the CRTC set forth in its working document.

In his opening remarks, Corus CEO and president John Cassaday argued against a new pick-and-pay regime, saying that recent data from research co CTAM indicated 57% of Canadians are happy with their current television package.

What’s more, argued Gary Maavara, executive VP at Corus, research from consumer behaviourist Dr. Dilip Soman indicates that “too much” choice has a paralyzing effect on consumers.

Maavara concluded that when faced with choices and changes under the pick-and-pay system, Canadians would be frustrated and default to something resembling skinny basic, supplemented by services like Netflix, having a negative economic impact on the system as a whole.

Should the commission go ahead with a skinny basic option and pick-and-pay structure, Corus argued that consumers should have the option to maintain their status quo.

“This meets the need to potentially reduce costs and potentially increase choice, but gives something to those that are happy with what they have,” Cassady said.

Corus added that the new system should be market-tested in order to examine how Canadians will react to greater choice in their television packages, and the company will submit a proposed timeline with more concrete dates as to when it believes each element should be rolled out to reduce the shock of presenting everything all at once.

Corus’ presentation took a largely anti-regulatory tone, will all members of the company’s panel saying the current Canadian broadcasting system was working fine, both from a revenue and customer satisfaction perspective.

During questions, the commission pointed out that there was nothing in the current working document that wouldn’t allow for what Corus was asking for and pointed out the irony in taking an anti-regulation stance, asking if Corus didn’t have faith that their broadcasting partners would offer what it was proposing without a mandate to do so.

“Our approach has been to see how to get lower costs to emerge,” Cassaday said. “We don’t prescribe even skinny basic as the way to that because that makes the system more homogenized. If we are going to have intervention, at least we can ensure that Canadians will have the opportunity to have what they already have.”

When pressed about whether he felt a 57% satisfaction rate should be considered a success, Cassaday said that it greatly outweighed the number that were dissatified with their service, as many responded as being indifferent. The commission responded with their own survey that said only 36% of Canadians were satisfied with the price of their package.

“All consumers would like a lower price, no matter what the product is. That’s why we think it should be about value,” Cassaday said in response, citing the company’s video-on-demand services and recent HBO content deal as ways it is adding value to its consumer offering.