Trending >

Mandatory carriage is not a socialist plot. Here’s why…

mandatory carriage
mandatory carriage
Proponents of a future in which TV shows are produced for an online-only audience point to the “success” of House of Cards and the return of Arrested Development. As good as Arrested Development was, it was cancelled because its numbers were low. What’s happening down south is media balkanization, with various companies demanding $10 a month each for streaming content. Your screaming child misses Dora the Explorer? That’ll be $10 for the kid’s channel. And $10 for your sports. And $10 for the news…

The CRTC is currently hearing applications from several new television suitors who’d like to be included in the mandatory carriage bundles offered in basic cable packages. Commentary runs the gamut from “What century is this?” to “You’ll have to pry my remote control loose from my cold, dead hands.”

The opponents of bundling mandatory carriage for certain channels frame the argument as if watching TV was like buying groceries in the Soviet Union. When you get to the checkout a man appears and says, “Cheddar? Excellent choice. Here, take these apples. I don’t care if you don’t want them. You’re paying for them anyway. The Apple Farmers Association of Canada thanks you.”

This is a shifty and misleading allegory that relies on containing a grain of truth in order to appear plausible.

For an illustrative example of what might lie in our future, by pure coincidence this week almost 2,000 programs are being unceremoniously dropped from Netflix in the United States. Canadian commentators and the CRTC alike should be watching this situation closely for a more apt and reality-based cautionary tale. Canadian users of Netflix have long lamented the paucity of shows available compared to its southern parent company. This all comes down to licensing. Suppliers of content to Netflix, including Warner Bros., MGM and Universal, have decided that their product is good enough to remove from Netflix and strike out on their own. The Warner content is being folded in to a streaming service called Warner Archive Instant, costing subscribers $10 a month. Netflix’s director of corporate communications, Joris Evers, tried to spin the sudden loss of a huge chunk of content as a happy event. “Our goal is to be an expert programmer, offering a mix that delights our members, rather than trying to be a broad distributor.”

 

If you relied on the internet for all of your information, you’d think that HBO’s “Girls” was the most popular show in television history. There are no essays being written about “The Meaning of Big Bang Theory”, after all. Such essays about Girls appear on the internet almost every day. But check the numbers. The audience for its season finale was more than 14 million viewers shy of an average episode of Big Bang Theory.

 

The trouble is that Netflix not a programmer. You are. Netflix is a streaming service. This is talk that you expect from a traditional, linear television network. Neither is Netflix a “broad distributor”. It is a precision distributor of media on demand. If Netflix fails to differentiate itself from traditional media in that sense, then it will be rolled under by existing media juggernauts for failing to differentiate itself.

In addition, Netflix is set to allow its licensing deal with Viacom expire, which will result in the disappearance of a great deal of children’s content, a move that will irk American parents perhaps more than any other demographic. The ideal market for video-on-demand, children can watch the same half dozen episodes of Dora the Explorer or Handy Manny over and over and over again all day long. On the day that agreement expires, there will no doubt be more than a few weary parental explanations offered to teary-eyed children about why Dora had to go away.

Proponents of a future in which TV shows are produced for an online-only audience point to the “success” of House of Cards and the return of Arrested Development. As good as Arrested Development was, it was cancelled because its numbers were low. What it has going for it is a fan base committed enough to bring it back on an online-only basis, likely for a short run. If you relied on the internet for all of your information, you’d think that HBO’s “Girls” was the most popular show in television history. There are no essays being written about “The Meaning of Big Bang Theory”, after all. Such essays about Girls appear on the internet almost every day. But check the numbers. The audience for its season finale was more than 14 million viewers shy of an average episode of Big Bang Theory.

For the CRTC to deregulate entirely and let Canadian cable subscribers select which channels they want à la carte sounds like a sensible option at first blush, but it means the death knell of channels that already benefit from mandatory carriage (Vision, the APN, and Natural Resources Television) who simply will not survive the way TSN can. Applicants presently on the outside looking in, who want their stations included in basic cable, like Sun News and the Canadian Punjabi Network, will likely die without the benefits that the high penetration offered by mandatory carriage will get them. The Punjabi Network, perhaps, stands a chance because it has a committed base and fulfills a lack that potential viewers of Sun News aren’t even aware that they have.

The factors before the commission to consider are whether the applicants differentiate themselves enough from the behemoth of American media to be considered for approval. Sun News presents itself as the Fox News of the North, and so probably won’t be approved. The only factor the CRTC might consider in its favour is that, having lost $17 million last year, the channel is doomed if left to compete in the open market. Commenting on the irony of this seems only slightly distasteful.

During the proceedings, several commentators and presenters before the hearings have conflated production and distribution in ways that aren’t particularly helpful to understanding the issue before us, which is the mandatory bundling of certain TV stations in basic cable packages paid for by all subscribers. Starlight, for example, a nascent all-Canadian feature film channel, headed by Canadian film industry veteran Robert Lantos, is demanding production money as well as carriage on basic cable. Jokes about “all Porky’s, all the time” notwithstanding, the channel is a deeply bad idea, precisely because media production in Canada needs to be treated as a separate issue from distribution.

 

The crux of the dilemma comes down to this: We live in a world of cheap access to an abundance of relatively quality goods and services. We do not pay the actual full cost for almost anything: not gasoline, not post-secondary education, not clothing.

 

The absolute majority of production money for Canadian TV and films, disbursed through organizations like Telefilm, the National Film Board, and the Canadian Media Fund, is provided by the taxpayer. This is also true of Quebec’s vaunted industry, which is widely regarded as a “success”. Quebec’s film industry is a success by awards standards, but not at the box office. If tax production money dried up tomorrow, the whole thing would go away instantly. The film industry never had a quota system like music did from the 1970s onward, mandating the airplay of Canadian music and ensuring the success of acts like Bryan Adams, Sarah McLachlan and Celine Dion, who all benefited from that system. The fact that a day hasn’t passed since 1986 that “Don’t Forget Me When I’m Gone” by Glass Tiger is played on some station somewhere is also evidence that such a system is deeply wrong in too many ways to enumerate.

The crux of the dilemma comes down to this: We live in a world of cheap access to an abundance of relatively quality goods and services. We do not pay the actual full cost for almost anything: not gasoline, not post-secondary education, not clothing. So the idea of paying more than $8 a month for endless access to streaming films, as Americans do for Netflix, has become unattractive. Why would you, when there’s a free alternative in piracy?

You’re likely living in a household with both cable and internet connections, each of which are already expensive. The fact that all of the major internet providers are owned by cable companies also likely irks you, as it should. Why is your internet connection throttled? Why do you have data caps on your internet package? It’s not because you live in a totalitarian country. It’s because the cable companies own the internet companies and it is not in their interest for you to ditch your cable package in favour of consuming all your media online. Why would they let you pay once for something you’re now happily paying for twice?

As to content, guess what? The very companies that own the cable and internet infrastructure also own the networks that make the shows. CTV is owned by Bell, Global is owned by Shaw, and City is owned by Rogers. CBC, the outlier, is “owned” by the taxpayer. As stated earlier, content produced by the big three is mostly tax funded, too. It’s enough to send you down to the basement to dig out your set of rabbit ears and see if they still work.

Potential alternatives to all this are very niche indeed, and also largely taxpayer funded. The National Film Board has just announced a new subscription-based streaming service for its extensive documentary catalogue, to be available initially in North America and Europe starting in 2014. Quite amazingly, the NFB archive is almost all online right now and has a lot of fantastic content available for free in very high quality. In light of this recent announcement, you’d be well advised to watch the free service while it still exists.

Netflix Canada has a small library and doesn’t offer any HD programming, as it does in the States. But as anyone can tell you who’s received an unexpected overage bill (the penalty given by the cable/internet companies for exceeding your arbitrarily imposed data cap), you should think twice before clicking “play” on an any HD show. Unlimited data plans are far easier to come by in the United States.

Many tech aficionados will no doubt wonder, “Why are we even talking about cable? All TV is on the internet now. Get with the program.” It isn’t, though, not by a long shot. What we underestimate is the torpor of traditional media. Less than 1.5% of the population are cord-cutters, those brave souls who live without cable at all. In theory, it’s “true” to say that the future does not belong to old media. In practice, however, the death of television will take a very, very long time, if it ever happens at all.

There’s a paradox here in which “democracy” for media (producers as well as viewers) involves unhinging it from institutional infrastructure and giving access to producers who wouldn’t ordinarily have it. But this same “democracy” also needs the protection of government in order to ensure that there’s enough multiplicity of media choice, because people left to their own devices almost invariably choose the same shows and networks and will never on a mass scale willingly choose to watch small, boutique channels with their specialty shows about white 20-something women in Brooklyn.

The other paradox is that people who oppose mandatory carriage either willfully or through sheer ignorance confuse “free markets” with “absence of regulation”. This is why the cautionary anecdote about the grocery store is misleading (while containing a folksy quantum of truth). “No, comrade, you don’t understand. You are not buying the apples. The apples, they buy you.” People who use this technique to illustrate their point are presenting a false choice at best, and employing scare tactics at worst.

 

Be careful what you wish for. What’s happening in the U.S. right now is media balkanization, with various companies demanding $10 a month each for streaming content. Your screaming child misses Dora the Explorer? That’ll be $10 for the kid’s channel. And $10 for your sports. And $10 for the news. That’s on top of whatever you’re already paying for the internet connection. And so on.

 

The other other paradox, and why production needs to be considered separately from distribution, is the chicken and egg question of funding the shows and films that people watch. Without taxpayer funding, Canadian film and TV will disappear. If that happens, then why bother convening a CRTC hearing to mandate certain channels on everyone’s basic cable in the first place? When Canadian content goes away, there’ll be nothing left to argue about. A lot of commentary about the current CRTC hearing is toeing a “We want to watch what we want to watch because freedom!” line.

Be careful what you wish for. What’s happening in the U.S. right now is media balkanization, with various companies demanding $10 a month each for streaming content. Your screaming child misses Dora the Explorer? That’ll be $10 for the kid’s channel. And $10 for your sports. And $10 for the news. That’s on top of whatever you’re already paying for the internet connection. And so on.

One thing that cable proves about consumer attitudes towards media is that most people want a “one and done” solution for their media needs. Cable is expensive, but it provides you with a single window into what appears to be a healthy enough mix of channels for you to select from. Now look at what’s happening to streaming content and Netflix in the US. That is the future. Either that or you can join the brave new world of cord-cutting, in which you either torrent all your media, watch what you can for free online, and sign up for Netflix Canada or something like it. Do you imagine you won’t miss the CBC or CTV or all Canadian television and radio when the brave new digital world finally comes around?

Internet pundits chortle about the backwardness of “dead tree” media and anything that isn’t experienced online. Books have been declared dead, radio has been declared dead, magazines have been declared dead. But check the numbers. Old media is not only still with us, it’s not even old. And it exists on a scale that producers of webisodes cannot begin to envy. Networks tend not to fund things that start off on the internet, with very rare exceptions. And Kickstarter will not pay for the next Iron Man film. The question is whether or not you think that might be a good thing.

Those who oppose mandatory carriage imagine themselves as defenders of liberty and common sense. And perhaps you can think of more pressing matters to the health of democracy than whether Republic of Doyle exists.

In an ideal media world, everything would be à la carte, free people making free choices. But that world is not in our near future. Canadian media exists alongside American media in a state of asymmetrical warfare. Why did Canada’s banks come out of 2008 relatively unscathed? Because of sound regulation and resistance to monopolization. Without the protection offered by, among other initiatives, mandatory carriage, Canadian media will simply disappear. Jean-Pierre Blais is seeking to strike the right balance in ensuring we don’t go down the road of media monoculture. There is a real danger that this is what might happen if those opposed to mandatory carriage get their way.

  •  
  •  
  •  

About The Author /

Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

RELATED POSTS

Access Expert Stock Picks for free

CLOSE

Get Stock Picks From The Pros

Sign up for our newsletter to get timely Canadian stock picks from expert financial analysts.