Quebec’s answer to Netflix, Illico Club, meets predictable opposition

Days after the launch of Videotron’s Illico Club à volonté (Illico Club Unlimited), a $9.99/month subscription service that offers unlimited access to its catalogue of French-language movies, TV series, children’s shows and documentaries, Astral Media filed a complaint with the CRTC petitioning to shut the service down. Videotron has hyped the new service as its own challenge to Netflix.

“It is imperative to act rapidly because the Illico Club Unlimited service offered through the regulated Videotron video on demand platform will cause irreparable harm to the pay TV service Super Écran, which directly competes with it,” Astral’s regulatory affairs vice-president Nathalie Dorval writes in her submission.

The CRTC’s brief for Super Écran is a little indeterminate, vacillating between 2010 and 2011 on approving a second general interest French-language service as long as it wasn’t directly competitive with Super Écran, immediately after which they appeared to re-open the application process to a competitive service and then shut it again after receiving no credible bids.

With the CRTC’s decision “not to open up the French-language general interest pay television service genre to competition,” Astral would appear to be within its rights to file a complaint.

Subscriptions to the service continue apace, however, and Videotron claims that 35,000 people signed up during its first two weeks. Outgoing Quebecor CEO Pierre-Karl Péladeau expressed dismay at Astral’s complaint, writing in the Toronto Sun (part of Quebecor’s Sun Media empire), “Astral’s attempt to deprive consumers of a new, homegrown service is all the more incomprehensible at a time when American services like Netflix and organizations like Apple TV are knocking at our media doors and attracting growing interest from viewers.”

Péladeau hints that Videotron’s service is meant to pre-empt a similar offering from Bell, which that company mentioned it was planning to launch at a recent CRTC hearing. Péladeau adds that Astral’s complaint is “particularly surprising and unacceptable” in light of Bell’s moves to acquire Astral, noting also that the Canadian version of Netflix “has already signed up approximately 10% of Videotron’s customers while making no contribution to the Canadian broadcasting system.” Canadians can only lament the lack of online video services comparable to those south of the border.

Incoming Quebecor CEO Robert Dépatie assesses the situation like so: “In recent years, the world – and particularly the broadcasting industry – has seen dramatic changes that are driving the emergence of a new paradigm. While Astral has decided to deny the new realities, we regard them as a new opportunity to innovate for the benefit of consumers.” Astral makes the case that because Videotron offers Illico Club Unlimited through its video-on-demand channel, it violates the CRTC’s directive against direct competition with Super Écran’s protected Category A pay TV status.

Dépatie and Videotron plan to contest Astral’s complaint: “We fully intend to demonstrate that before the CRTC and to lay bare Astral’s true purpose in filing the complaint, namely to block any competition in order to protect and indeed expand its historical monopoly over pay television, which has stood for more than 30 years.”