Upstart specialty channel Gusto TV used its time in front of the CRTC on Tuesday to highlight the ways it says changes to the Canadian broadcasting system could eliminate unfair advantages larger, vertically integrated companies hold over independents.
During his presentation, Chris Knight, president and CEO of Gusto TV, referred back to several comments made by executives from the vertically integrated companies and said there had to be assurances that they applied to all companies, including independents.
“‘Free isn’t a business model, the paramount importance of discoverability, it’s a free market, it’s got to be a level playing field.’ These are all quotes from the large, multi-billion dollar, vertically integrated companies who, in some cases, seem to think these tenets apply only to them,” he said.
Gusto, a food and lifestyle channel launched in December, is currently only offered by Bell and Telus as a category B (optional) channel. The difficulty the channel has had reaching agreements with other BDUs was an example Knight used to emphasize the challenges faced by indies in a VI-dominated marketplace.
Knight went on to say that, as difficult as it has been to get Gusto off the ground, it would have been impossible in an unbundled ecosystem unless there were regulations in place to ensure that large BDUs couldn’t use their economic advantage to promote their own channels over independents.
“What’s the point of multiple packaging options if you’re limited in the choice of channels that go in the packages?” Knight said. “We’re spending a lot of time talking about the size and shape of the bottle and not quality of wine that goes in it. It’s in the best interest of the Canadian TV viewer to have choice, not simply VI choice.”
Overall, Gusto did not present many proposals of their own, saying they were more concerned with ensuring equal footing for independent channels and that proposals from other intervenors outlined ways to do that.
The company did present a proposal for linkage, saying that the commission’s proposed linkage model – in which BDUs must offer one independent channel for every two coming from a VI company – wasn’t enough. It instead proposed its own “enhanced linkage” plan, saying that for every one of a BDU’s own channels offered on its service, it must also offer a comparable Canadian channel on similar terms.
When the commission noted that Gusto’s proposal did not specify that the “comparable” channel would be an independent one, Mark Prasuhn, VP and general manager at Gusto TV, promised Gusto’s revised submission would include the cause, along with a more definitive answer as to which proposal presented it deemed the most favourable.
Although the commission pointed out that the proposed 2:1 linkage ratio still provided security for independents, Prasuhn said it wasn’t enough to ensure fair competition with channels operated by BDUs.
“Linkage still limits, or makes impossible, new entry,” he said. “It also gives a small number of gatekeepers the ability to strategically pick and choose which channels they don’t want to have to compete with.”
