Rogers: Netflix Canada Not Competition

Netflix

First Posted: 06/14/11 08:36 AM ET Updated: 08/14/11 06:12 AM ET

THE CANADIAN PRESS -- Online movie and TV provider Netflix is a content provider that comes over networks and the service doesn't need more regulation, the CEO of Rogers Communications Inc. said Monday.

"My first premise would be that less regulation is better than more," said chief executive Nadir Mohamed, who indicated he was lukewarm to applying Canadian content rules to such online content providers or having them contribute financially to Canadian programming.

"I worry about taking rules that apply to conventional media and conventional broadcast and applying (them) ... in terms of access over the web."

Content providers like Netflix and others drive network consumption by consumers, he added in an interview from Toronto.

"From that perspective, it's another content provider that leverages our network and given our environment, we'd say that's consumption of our core product."

But if you happen to own a movie network or have a product that competes with Netflix, then it would be a competitor, Mohamed said.

Mohamed said Netflix Canada isn't a competitor to Rogers' on-demand TV service or to other content that Rogers provides.

"We see Netflix, along with a whole bunch of other organizations ... taping into the fact that almost all content, if not all content, is moving to a digital world."

But he acknowledged concerns that these online services raise.

"I am aware of the policy issues people need to think about -- what's in the public interest in terms of Canadian content. But to apply it by saying, take what exists in the conventional world and use the same narrative language to apply to the new world, I think would be a mistake."

However, a coalition of Canadian companies, including Rogers, wants the country's telecom regulator to examine the operations of Internet-based services such as Netflix, which offers movies and other TV programs for a fee.

The 40-member group from the telecommunications, broadcasting, cable and satellite and production sectors, along with unions, has asked the CRTC to initiate public consultations on the industry.

The number of Netflix customers is growing quickly, to 23.6 million subscribers in the U.S. and Canada as of the end of March. Netflix's streaming service eventually could put it in competition with some cable and satellite companies, but for now it doesn't provide live TV.

Mohamed said Rogers wants to provide its content over multiple platforms -- smartphones, computer tablets, TV sets, radio and printed content -- a strategy being used by other telecom-media companies such as BCE (TSX:BCE) and Quebecor Inc. (TSX:QBR.B).

"For us, when we look out three to five years, we are very focused on the game plan that starts and rests on the premise that there's an insatiable demand for people to be informed, connected and entertained," he said.

On data limits caps for bandwidth, Mohamed said they will keep changing to adopt to consumer usage.

"Three to live years from now there will be a lot more video and data rich applications, so the caps will have to respond to that."

Meanwhile, Rogers already has speed and usage caps in place.

In its recent first-quarter financial results, Rogers had a nine per cent drop in its profit, but posted growth in all of its main divisions and sold a record number of smartphones to new customers in the highly competitive wireless market.

Rogers has said it sold 190,000 smartphones to new customers in the quarter and said Tuesday that 45 per cent of its customers on contracts now have devices that allow them to surf the web, watch video and check email. That's up from 33 per cent in the same quarter in 2010.

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Filed by Kenny Yum  |