Maximizing the ability of Canadian consumers to subscribe to discretionary services on a service by service basis

Response to Order in Council P.C 2013-1167

24 April 2014


On 7 November 2013, the Governor in Council published Order in Council P.C. 2013-1167 (the OIC). Noting that the Commission had announced a public consultation process on the future of Canadian televisionFootnote 1 and pursuant to section 15 of the Broadcasting Act (the Act), the OIC requested that the Commission make a report as soon as feasible, but no later than April 30, 2014, on how the ability of Canadian consumers to subscribe to pay and specialty television services on a service-by-service basis can be maximized in a manner that most appropriately furthers the broadcasting policy for Canada set out in subsection 3(1) of the Act, while having regard to the objectives of the regulatory policy set out in subsection 5(2) of the Act. The objectives of the Act are addressed further below.

The OIC specified that the report was to set out the steps the Commission intends to take in this respect, with particular regard to the following considerations:

  1. the effect of any measures on consumers and in particular their affordable access to a range of pay and specialty television services, including niche programming;
  2. the effect of any measures on
    1. Canadian pay and specialty television services, including the cost of program acquisition,
    2. distribution undertakings,
    3. the Canadian independent production sector,
    4. programming reflecting the multicultural and multiracial nature of Canadian society, and
    5. English and French linguistic minorities; and
  3. the manner in which any measures adopted would ensure that
    1. the majority of programming services received by subscribers remain Canadian and
    2. the carriage by distribution undertakings of Canadian programming services, particularly local Canadian stations, continues to be given priority.

In this report, the Commission first explains how the OIC fits within the broader review of the television framework (the Let’s Talk TV hearing) initiated by the Commission in Broadcasting Notice of Consultation 2014-190, also issued today. The report then discusses the industry practices and regulatory measures that currently govern packaging. Next it describes its proposed approach to maximize choice and flexibility, including its possible effects on Canadians, programming services, niche programming, the production sector and cable, Internet protocol television (IPTV)Footnote 2 and satellite operators (“distributors” or “operators”), as well as measures to ensure the continued availability of Canadian services. Finally, the Commission sets out the required next steps to validate its proposed approach both in the current context and in the context of other possible changes in the television broadcasting environment.

As explained in greater detail below, in response to the OIC, the Commission intends to explore requiring distributors to:

The Commission is an administrative tribunal responsible under section 5 of the Act for regulating and supervising all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in subsection 3(1) of the Act. Accordingly, it is seeking input from stakeholders and the public on this proposed model as part of the Let’s Talk TV hearing. As such, elements of this model may change once the Commission has the benefit of a more fulsome record regarding its possible advantages and drawbacks.

The Let’s Talk TV hearing

In the summer of 2013, the Commission announced that it would begin a conversation with Canadians about the future of television. In the fall of 2013, the Commission published a “notice of invitation” to Canadians to this effect. The OIC refers to this consultation in requesting that the Commission make a report. The Commission considers that the proposals that it is putting forward, while robust and responsive to the Government’s request, must be considered as part of the larger Let’s Talk TV public consultation. The Let’s Talk TV hearing will allow the Commission to validate the proposed approach and assess its potential impacts.

In particular, any new approach to maximize choice should be consistent with the objectives of section 3(1) of the Act, which include the following:

In Broadcasting Notice of Consultation 2014-190, the Commission set out the following intended outcomes for its review of the framework for television:

  1. A Canadian television system that fosters choice and flexibility in selecting programming services;
  2. A Canadian television system that encourages the creation of compelling and diverse Canadian programming; and
  3. A Canadian television system that empowers Canadians to make informed choices and provides recourse mechanisms in the case of disputes.

Fact finding

In addition to considering the information received during Phase I and II of the Let’s Talk TV consultation, in which Canadians were invited to share their views about the future of television, the Commission sought information from several stakeholders in order to respond to the OIC.

In early January 2014, the Commission sent a letter to distributors, programming services, vertically integrated companies, producers, representatives from official language minority communities (OLMCs) and consumer advocacy groups requesting that they respond to a number of questions and provide, among other things:

The Commission also reviewed national and international studies and articles,Footnote 6 as well as its own internal data and studies.

The current packaging model

In an era which has seen the proliferation of specialty services, packaging has been an important marketing element for Canadian distributors and programming services. As the number of specialty services available to subscribers increased, the number and size of packages also tended to increase. Currently, programming services are typically provided in set packages varying in size, content and price and often include both Canadian and non-Canadian channels.

Current packaging rules

In 2008, the Commission announced that it would remove many packaging rules, thus providing programmers and distributors with greater say in the manner they choose to package programming services and deliver them to their subscribers.Footnote 7 For example, the Commission eliminated packaging rules requiring a certain ratio between Canadian and non-Canadian specialty services, as well as between Canadian and non-Canadian pay services. It also eliminated some requirements that cable distributors mirror analog packages on their digital offering.Footnote 8

In order to meet the objectives of the Act, including the reflection of the local, regional, linguistic and multicultural character of Canadian society, the Commission continues to maintain a limited number of rules regarding packaging, such as that cable and satellite operators distribute a basic service to all subscribers before providing other types of programming services.Footnote 9 The current rules regarding the basic service generally provide that it must be comprised of local and regional television stations, as well as certain other Canadian services, such as provincial educational services and 9(1)(h) services. Further, community channels and the proceedings of the provincial legislature are also included on the basic service where licensed terrestrial distributors choose to distribute such services. Other than these specific requirements, cable and satellite operators are free to add, and often do add, certain other discretionary services to the basic service offered to their subscribers.

There are also a limited number of packaging rules that apply outside of basic. For example, cable and satellite operators are generally required to offer a small number of Canadian specialty services, known as “Category A services,”Footnote 10 as part of a package before offering them on a stand-alone basis.Footnote 11 Targeted rules also apply to the packaging of non-Canadian third-language services with Canadian third-language services. Finally, operators are prohibited from distributing single point-of-view religious services in a package with other types of services or distributing adult programming services in such a way that subscribers must subscribe to these services to receive any other service.

Beginning on 20 May 2014, the Commission will also be requiring that cable and satellite operators place Canadian national news specialty services in the best available discretionary package consistent with their genre and programming (if these operators distribute these services as part of a discretionary package).Footnote 12 These services will also be available on a stand-alone basis.

The Commission’s current packaging rules were designed to:

Nevertheless, the communications marketplace has changed, and the Commission needs to reassess its current packaging rules.

Packaging practices

Packaging is usually the result of business negotiations between distributors and programmers in the form of affiliation agreements. Generally, affiliation agreements include provisions regarding the rates to be paid by cable and satellite operators to distribute programming services and the subscriber levels requested by programming services, which they argue are critical to their viability. These provisions can directly or indirectly affect how the programming service is packaged and priced. Some distributors argue that existing affiliation agreements make it difficult to offer other options to their subscribers.

Packaging is also influenced by the legacy effect of older rules and technologies. Many packaging requirements that fostered the development of large, pre-assembled packages were enacted in an era defined by a limited number of analog programming services. While these requirements have since been removed, distributors are often reluctant to change existing packages. Realigning or removing a programming service can often be met with resistance from certain subscribers, who perceive such changes as denying them a service which they have become accustomed to receiving.

Pre-assembled packages have provided a stable source of revenues for distributors and programming services over the years. For example, when packaged with more popular programming services, some services targeting narrower or niche audiences benefit from higher subscriber levels and thus usually increased revenues. This in part explains why pre-assembled packages remain the principle way in which programming services are offered in certain parts of the country.

Further, pre-assembled packages provide consumers with a large number of diverse Canadian and non-Canadian television services. The inclusion of a large number of services in a package allows consumers to receive those services at a lower cost than they would if those services were purchased individually. For some consumers, this creates a value proposition that is appealing. The Commission noted in its report on the comments received during Phase I of Let’s Talk TV that “some participants support packaging, considering that channel packages provide diverse content at a reasonable price, which meets their own needs or the needs of their families.” However, Canadians have also expressed concerns about large pre-assembled packages. The following was a typical comment received during the consultation: “[TRANSLATION] If you go to buy a fishing magazine, will the retailer make you buy a magazine on renovation, another on the life of Aboriginals, another on music and another on sports? Of course not. But that is what happens with channel packaging.”

Existing build-your-own-package options

Although they are not widespread, options such as pick-and-pay or build-your-own-package are not prohibited by the current regulatory framework. Indeed, some operators in Quebec and Atlantic Canada have begun offering build-your-own-package options.

Since its introduction by Videotron in 1999, the build-your-own-package option has gained considerable popularity among Quebec subscribers. Quebecor reported that between 2006 and 2011, this option saw a 141% increase in take-up when compared to the total number of subscribers. In response to a Commission direction,Footnote 13 Quebecor also reported that this option was the choice of approximately 70% of its new subscribers. Accordingly, the popularity of this option and its appeal to new subscribers likely compelled competing distributors such as Bell and Cogeco to offer similar flexibility to their Quebec subscribers. Such operators have not made similar offerings outside Quebec.

What is changing: Expectations due to technological changes

Due to recent technological changes, many consumers are now using a range of platforms and devices that allow them to have more control over the audiovisual content they watch, thus making for a more customized viewing experience. In light of this evolving technological environment, some consumers are increasingly demanding more flexibility, as highlighted by various surveysFootnote 14 and the comments received in Phase I and II of Let’s Talk TV. For example, the responses to the Let’s Talk TV: Choicebook suggest that Canadians generally prefer pick-and-pay and build-your-own-package options over large, pre-assembled packages.

Accordingly, the Commission is concerned that current pre-assembled packaging practices do not fully respond to the objective that cable and satellite operators provide efficient delivery of programming at affordable rates, using the most effective technologies, as required under subsection 3(1)(t)(ii) of the Act.

The proposed approach

The Commission is of the preliminary view that the distribution and packaging of television services should be reviewed to maximize consumer choice and flexibility. As part of the Let’s Talk TV hearing, the Commission intends to explore requiring distributors to:

With respect to the services to be distributed on the basic service, the Commission considers that the distribution of these types of services on the basic service contributes to the public interest by ensuring that Canadians are informed on matters of public concern at all levels (local, community, provincial and national) and thus better able to participate in Canadian democratic, economic, social and cultural life.

Under the proposed approach, distributors would also be allowed to continue to offer discretionary programming services in pre-assembled packages for those Canadians who are satisfied with their current offering. Those who are not satisfied with the status quo would be offered alternatives, including the choice of smaller packages or customization on a pick-and-pay basis.

In order to develop the proposed approach and to respond to the OIC, the Commission has assessed the potential effect of this new packaging and distribution model on the following:

The Commission is putting forward this preliminary view for public comment in a manner consistent with its duty of fairness as an administrative tribunal. This process will allow Canadians to express their views in the context of a formal hearing.

Effect on Canadians

The proposed approach is designed to respond to consumer demand for more flexibility by requiring that all discretionary services be offered on a pick-and-pay basis. Under this approach, subscribers would not have to pay for discretionary services they do not wish to receive and could allocate their financial resources mainly to the services they or their families wish to receive.

Given that the price of cable, satellite and IPTV distribution services has increased faster than the rate of inflation in recent years (as shown in the figure below), providing subscribers with increased flexibility would give them more control over their bills. In addition, requiring build-your-own-package options while continuing to allow pre-assembled packages would maximize the options available to consumers, while still providing support for Canadian programming, choice and diversity within the system, as discussed in the following section.

Price indices – BDU (cable and satellite, including pay television), Consumer Price Index (CPI), telephone price index (TPI) and Internet access servicesFootnote 15

This line chart shows the following price indices from 2002 to 2012 Consumer price index (CPI): 100, 102.8, 104.7, 107, 109.1, 111.5, 114.1, 114.4, 116.5 119.9, 121.7; Telephone price index (TPI): 100, 100.2, 100.6, 101, 100.9, 101.6, 105.9, 106.5, 111.2, 112.3 and 114.6; Cablevision and satellite services (including pay television) index: 100, 104.8, 108.8, 112.5, 116.8. 122.7, 128.7, 135.8, 143.4, 151.4 and 159.0; Internet access services index: 100, 99.1, 99, 97.1, 96.7, 97.5, 95.8, 94.8, 95.8, 100.9 and 105.2.

Source: Statistics Canada

Some studies suggest that the cost of individual services could increase under a pick-and-pay model. As in the case of the purchase of any kind of retail goods and services, the purchase of an individual service outside of a package may result in a price that is higher than expected, owing, in this case, to the loss of predictability and stability of revenues provided by packaging and the need to make up for what will likely be lower subscriber levels. As such, Canadians who choose to subscribe on a service-by-service basis would likely be required to pay more for fewer services than they do in a pre-assembled package. However, the continued availability of discretionary programming services in pre-assembled packages would allow consumers currently enjoying the value offered by larger packages to retain this option if they so choose.

Some channels might not survive in an environment marked by greater subscriber choice, leading to the loss of services that some Canadians enjoy. This is especially true given that this proposed change and any impact on subscription revenues would occur at a time when advertising revenues are shifting away from the licensed broadcasting system. However, the proposed approach is intended to lessen this impact and may have the positive effect of encouraging some discretionary services to innovate and improve their programming to remain competitive and responsive to Canadian viewers. Moreover, services that are designated as 9(1)(h) services for public interest reasons would continue to receive an appropriate level of regulatory support, as determined periodically through public consultation.

Similarly, while some jobs may be affected should services disappear, the proposed approach could lead to a more efficient allocation of resources since the discretionary services that would succeed would be those that are deemed most relevant and appreciated by viewers and their families.

Finally, allowing cable and satellite operators to maintain their existing packaging options while requiring them to provide a parallel build-your-own-package option should ensure a level of programming diversity, as discussed in the following section.

However, the Commission cautions that the proposed approach may not in and of itself fully attain the objective to serve the needs and interests of a wide range of Canadians, particularly in the case of specific groups. In this respect, the Commission has generally used section 9(1)(h) of the Act to ensure that certain groups (e.g. Aboriginal peoples, OLMCs, persons with disabilities) have access to programming that serves their needs and interests as part of the basic service. The Commission has set the bar very high for obtaining mandatory distribution and has granted such applications only where the existing or proposed services make exceptional contributions to meeting the objectives of the Act. The Commission designates as 9(1)(h)services only those services that bring benefits to a portion of the Canadian population that would not likely have access to such services without a mandatory distribution order. The Commission considers that this option should be retained to achieve certain of the objectives of the Act. These objectives notably include reflecting the ethno-cultural and linguistic diversity of Canada, including the special place of Aboriginal peoples in Canadian society and the needs of OLMCs; allowing Canadians living with disabilities to participate more fully in the Canadian broadcasting system; and supporting Canada’s democratic life and institutions and its regions, including the North.

Finally, with regard to the reflection of the multicultural and multiracial nature of Canadian society, the Commission considers that the continued support for this type of Canadian programming under the proposed approach would likely ensure some reflection. There is added comfort in the fact that multicultural programming is also available on some conventional television stations, whose distribution is required as part of the basic service of certain distributors. Consequently, the availability and packaging of these stations would not change as a result of this proposed approach.

Effect on programming services and niche programming

The proposed approach, which would offer Canadians choice, would help support the viability of different elements of the system, therefore ensuring that a wide range of programming is available, including niche programming targeted to smaller audiences. Specifically, services would continue to benefit from some packaging-driven penetration, which increases visibility and provides revenue stability. Further, some subscribers would likely keep their current packaging choices or combine smaller theme packs with stand-alone services, allowing programming services and distributors to progressively adapt to any changes.

Some distributors and programmers would likely renegotiate their affiliation agreements so that they are adaptive and responsive to the new model. For example, parties may seek to adjust wholesale and retail prices, adjust expenditures or change the type of programming offered. More packaging flexibility and choice for consumers could also prompt programming services to increase their level of self-promotion. Such flexibility could also result in the adoption of different programming strategies. For example, some services could attempt to program for mass audiences to stabilize their current subscriber levels, while others could reposition themselves to specialize or respond to emerging programming trends or changes in taste. Finally, the proposed model could encourage existing services to show more original programming in order to stand out, serve un-served or under-served audiences or both.Footnote 16

With respect to French-language programming services, such services already operate, for the most part, in a market where subscribers have more flexibility. Specifically, while pre-assembled packages remain available, most distributors in Quebec also allow consumers to create and customize their own packages of 5, 10, 15 or 20 services. Further, the French-language market has fewer discretionary services than its English-language counterpart and a vast majority of these services are Canadian. Accordingly, when subscribers are given the option to subscribe to services, they often choose a significant percentage of the available Canadian French-language services. Consequently, requiring a pick-and-pay option is not likely to have a significant effect on existing French-language programming services.

Effect on the production sector

The successes of current packaging practices include significant support for Canadian programming. Together the Canadian television and production industries directly employ more than 60,000 people. The predictability and stability of revenues provided by packaging has helped ensure that programming services of a variety of genres, operating in French, English and third languages, have the resources to produce or acquire high-quality Canadian programming, consistent with the broadcasting policy objectives set out in subsection 3(1) of the Act. This predictability and stability of revenues has also played a part in providing a significant financial contribution to Canadian programming through requirements on distributors to contribute part of their broadcasting revenues to the production of Canadian programming.

Limited evidence was provided by producers on the potential impact of greater choice and flexibility on the production sector. The potential loss of discretionary programming services under the proposed model could have an impact on production. The loss of programming services would affect the ability of affiliated programming services to amortize programming costs across multiple services and consequently their ability to fund new programming.

In addition, discretionary programming services are required to devote a percentage of their expenditures to Canadian programming. The larger broadcasting ownership groups, such as Bell, Rogers and Shaw, are also currently required to devote a percentage of their broadcasting revenues from the operation of some pay and specialty services to programs of national interest, of which at least 75% must go to productions from independent production companies. Further, cable and satellite operators must generally contribute 5% of their broadcasting revenues to the production of Canadian programming. These contributions are typically directed to programming funds such as the Canada Media Fund, who in turn finance and promote the production of Canadian content.

Accordingly, a decrease in the number of discretionary programming services or their revenues could lead to a decrease in the overall funding of Canadian programming. However, the number of discretionary programming services affected and any resulting loss to the Canadian production sector would ultimately depend on the extent to which subscribers migrate from larger pre-assembled packages to build-your-own-package, pick-and-pay or a combination of both options.

Certain regulatory tools could lessen the impact of package unbundling on the production sector. Notably, given the number of recent large ownership transactions, existing and future tangible benefitsFootnote 17 could be used to help support the production sector as broadcasters transition to an environment where pick-and-pay is more common. However, tangible benefits do not necessarily represent a stable, ongoing source of financing.

Any decrease in the current funding models may put pressure on governments to provide more funding through tax credits or other programs.

In Broadcasting Notice of Consultation 2014-190, the Commission stated that it was prepared to consider various incentives and other measures to ensure the presence of compelling Canadian programs on multiple platforms in the future.

Effect on cable and satellite operators

Distributors have the most direct relationship with consumers and as such are the ones from whom subscribers demand flexibility in their choice of programming services.

In a recent study,Footnote 18 Credit Suisse argued that online streaming options and viewer behavior were increasing the need for traditional platforms to offer greater package flexibility. The study concluded that while a transition to increased programming flexibility may come with risks, it is likely in the distribution sector’s best long-term interest. To that effect, many Canadian distributors have shown some interest in offering more flexible options. However, cable and satellite operators face barriers that hinder their ability to respond to consumer demand for more flexibility. For instance, some operators have stated that current affiliation agreements make that option unfeasible outside of Quebec. These possible barriers will be explored at the Let’s Talk TV hearing.

Further, how non-Canadian services would react to the imposition of a pick-and-pay model in Canada remains unclear. In response to the Commission’s questions, some operators argued that U.S. services currently refuse to make their programming available on a stand-alone basis in Canada or impose very strict conditions before authorizing such distribution.

Moreover, while it might be true that conditions imposed by certain programming services hinder the ability to offer more flexible options, distributors also have an incentive to maintain the current pre-assembled packaging practices since they also benefit from the stability of revenues provided by large packages. These stable revenues contribute to the amortization of the distributor’s fixed costs, such as network and infrastructure costs, transport fees, technical support and billing. Allowing distributors to continue to offer pre-assembled packages while requiring them to offer other, more flexible subscription options would help ensure that these distributors retain the financial resources to contribute in an appropriate manner to the creation and presentation of Canadian programming.

Some consumers support the current packaging approach, considering that pre-assembled packages provide diverse content at a reasonable price. Accordingly, some subscribers would likely keep their current packaging options, allowing distributors to adapt progressively to any change. This incremental change might benefit distributors, particularly smaller independent distributors, since creating flexible packaging options would likely require new expenses in consumer service and billing infrastructures in the short term. More choice would require Canadian consumers to inform themselves about the various service offerings. Distributors would have to step up and help subscribers understand fully the choices available to them. This will be explored as part of the Let’s Talk TV hearing.

Additionally, some distributors have the financial and operational means to mitigate the potential effect of a pick-and-pay environment. For example, their direct relationship with subscribers would allow distributors to adjust their marketing tools (e.g. prices and bundles) and strategies (e.g. promotion and price discounts). The level of diversification of a distributor’s activities would also help minimize the effect of the proposed model. As smaller independent distributors do not always offer the same suite of services as larger distributors, their revenues are often more concentrated on the television side, which could make them more vulnerable to significant changes in current packaging practices.

Finally, requiring distributors to offer all discretionary services on a stand-alone basis would compel all Canadian parties to negotiate affiliation agreements that allow for such distribution, thus eliminating the contractual barriers that distributors currently face. The resulting increased flexibility could help some distributors limit the consumer churn they currently face and ensure that they provide efficient delivery of programming at affordable rates, using the most effective technologies available, as required under subsection 3(1)(t)(ii) of the Act.

Measures to ensure the availability of Canadian services

The OIC also requested that the Commission describe the manner in which any measures adopted would ensure that:

  1. the majority of programming services received by subscribers remain Canadian and
  2. the carriage by distribution undertakings of Canadian programming services, particularly local Canadian stations, continues to be given priority.

With respect to the first matter, the Commission notes that distributors currently offering flexible packaging options, such as build-your-own-package, continue to be subject to the overall Canadian preponderance rule. They have accordingly developed a mechanism to ensure that their subscribers receive a majority of Canadian programming services. Specifically, when subscribers build their own packages, their choices are processed through software that confirms whether the majority of programming services that will be received are Canadian. If the number of non-Canadian services exceeds that of Canadian services, subscribers are asked to modify their selection. Consequently, ensuring that subscribers receive a majority of Canadian services under a build-your-own-package model appears to be feasible.

However, in an environment where subscribers expect more choice, the creation of mechanisms that would prevent them from selecting an unlimited number of non-Canadian services could be seen as limiting such choice and flexibility. Consequently, in the Let’s Talk TV hearing, the Commission will explore whether the current preponderance rule should be maintained or whether other measures might be more appropriate.

With regard to giving priority to Canadian services and particularly local stations, the Commission considers that the proposed creation of a small, all-Canadian basic service would ensure that important elements of the broadcasting system, such as local Canadian television stations, provincial educational services, community channels, 9(1)(h) services and provincial legislature programming services, continue to be given priority, consistent with the objectives of the Act.

Conclusion and next steps

In light of all of the above, the Commission considers that its proposed approach could constitute the most appropriate way to maximize the ability of consumers to subscribe to pay and specialty services on a service-by-service basis in a manner that furthers the implementation of the objectives of Act. Nevertheless, uncertainty remains regarding the specific impact of the proposed model, especially since many parties (e.g. producers, independent programming services, OLMC representatives) were not in a position to provide detailed information to the Commission without a proposed model.

Accordingly, the Commission intends to test its proposed approach in the context of the larger public consultation initiated by Broadcasting Notice of Consultation 2014-190. This broader hearing will allow the Commission to validate this approach and assess its potential impacts, while at the same time enabling a fulsome consideration of all aspects of its proposed approach in the context of the other proposed changes to the system.

Related documents


Footnote 1

See Broadcasting Notice of Invitation 2013-563.

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Footnote 2

For example, TELUS, Bell TV Fibe and MTS.

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Footnote 3

In this case, 9(1)(h) services refers to the services designated by the Commission under section 9(1)(h) of the Act to receive mandatory distribution on the basic service. These designations are periodically reviewed. The current 9(1)(h) services are listed in Broadcasting Regulatory Policy 2013-372.

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Footnote 4

The requirement to distribute the community channel and the provincial legislature programming service on the basic service would only apply to licensed terrestrial distributors that choose to distribute such services.

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Footnote 5

Discretionary programming services would include all Canadian licensed and exempt services that need not be part of the basic service, as well as non-Canadian services.

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Footnote 6

For example, Bank of America Merrill Lynch, Canadian TV regulation: In for a tune-up or an overhaul?, 29 October 2013; Credit Suisse, Unbundling the Risks of Video Unbundling, 1 November 2013; Deloitte, Tech Trends 2013: Elements of Postdigital; Needham, Pricing Strategies in a Digital World, 8 March 2011; Needham, The Future of TV, 11 July 2013; Needham, Valuing Consumers’ TV Choices, 1 December 2013.

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Footnote 7

See Broadcasting Public Notice 2008-100.

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Footnote 8

Under the digital transition policy, cable operators were required to "mirror" the analog tiers on digital; that is, the existing analog tiers also had to be offered on a digital basis.

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Footnote 9

Other types of programming services include pay-per-view services, video-on-demand services or the programming services of exempt programming undertakings. See section 5 of the Broadcasting Distribution Regulations.

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Footnote 10

Examples of Category A services are Canal D, Canal Vie, History Television, MuchMusic, Space and YTV.

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Footnote 11

If the distributor is operating in a French-language market, it shall distribute all French-language Category A services in a single package before it distributes any of those services in other packages of programming services or on a stand-alone basis.

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Footnote 12

See Broadcasting Regulatory Policy 2013-734.

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Footnote 13

See para. 33 of Broadcasting Regulatory Policy 2011-601.

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Footnote 14

For example, a Harris Decima public opinion poll indicated that 61% of consumers not currently subscribing to a television provider would consider subscribing if there were more flexibility.

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Footnote 15

As indicated in the 2013 Communications Monitoring Report, inflation as measured by the change in the Consumer Price Index has increased 1.8% annually on average since 2005, whereas the average annual price increase for a basket of cable, satellite or IPTV distribution services over the same period was 5%.

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Footnote 16

As noted in the report on the comments received during Phase I of Let’s Talk TV, some participants in both linguistic markets are concerned about the high level of program repeats and recycled programming on many Canadian services.

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Footnote 17

As set out in Public Notice 1999-97, the Commission generally expects applicants to make commitments to provide clear and unequivocal tangible benefits in transfers of ownership or control. In regard to television programming stations, including conventional, specialty and pay television services, the Commission generally expects that the proposed contributions total 10% of the value of the transaction, as established by the Commission (see Public Notice 1999-97 and Broadcasting Public Notice 2007-53). These contributions must benefit the communities served and the broadcasting system as a whole. Further, to be considered a benefit, the proposed contribution must be incremental, i.e. it must be directed to projects and initiatives that normally would not be undertaken or realized in the absence of the transaction. The contribution must also flow predominantly to third parties, such as independent producers. As well, the Commission’s general approach is that the majority of benefits (approximately 85%) support on-screen programming.

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Footnote 18

Credit Suisse, Unbundling the Risks of Video Unbundling, 1 November 2013.

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