WHAT THE EXPERTS SAY In their purest form, the CRTC's new rules, once fully realized, will provide consumers with the choice of paying for fewer channels at a lower cost, and of picking the individual stations that they prefer to watch, says Michael Geist. But for many, that's a false choice because it's likely inevitable that the rule changes will result in fewer channels to choose from, adds Geist, who holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa's Faculty of Law. "We are probably going to lose some channels that are not financially sustainable and have very little in the way of audiences," said Geist. "This is shifting Canada towards a more market-oriented marketplace for broadcast television." Many channels will struggle because they are no longer cross-subsidized by being included in subscription-based bundles. Cross-subsidization happens when service providers offset the costs of carrying more expensive channels with the lower costs of their less-expensive channels by bundling them into a one-price package. Without subsidies, low viewership channels are left to survive on dwindling advertising revenues. A report released in early January by the consulting firm Nordicity and communications lawyer Peter Miller concluded that conventional, private TV stations across Canada have seen revenues decline by about 25 per cent since 2010, reducing their ability to produce quality Canadian programming. The report went on to warn that, under recent changes to CRTC regulations, including the unbundling of TV packages, revenue streams are set to drop even further. "In our view, the most likely scenario over the short-to-mid-term is a material, but not fatal, erosion of traditional television," said the report. The CRTC's Blais doesn't argue with that finding, saying "some channels may not survive in an environment marked by greater choice." "However, channels will need to be innovative to succeed," Blais said in a recent statement. But focusing solely on the value of basic TV packages misses most of the story, says Geist, who argues that the emergence of slimmer basic packages will push some people to re-examine what they watch, and how they watch it. The real effects of the new system, he argues, will come later in the year, when the full pick-and-pay requirements kick in. More broadly, Geist opines, new choices have and will continue to emerge in the form of the varying ways Canadians can view programming. Essentially, online choices. "If we are talking about less choice in terms of traditional broadcast channels that one might watch on their television, yes, some of those channels may disappear in a pick-and-pay world because they simply don't have sufficient audiences to merit continuing," said Geist. "If we are talking, on the other hand, about generally the amount of choice people have for entertainment and for video, it's obvious that there's far more choice today than there has ever been given the array of . . . online video services available and the like."
THE VERDICT While some Canadian TV channels may disappear under the new system, unable to survive without cable and satellite subsidies, others may find ways to enlist new viewers and attract the advertising dollars needed to survive. Better marketing of specialty channel selections may — or may not — pay off. Or, Canadians may turn away from lesser-watched traditional TV channels and focus their eyeballs toward online sources of programming. But even if some specialty channels fade to black, TV today is merely one avenue of entertainment for Canadian viewers. And the choices offered through online sources appear endless. For that reason, Morrison's statement ranks as "some baloney." METHODOLOGY The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale: No baloney _ the statement is completely accurate A little baloney _ the statement is mostly accurate but more information is required Some baloney _ the statement is partly accurate but important details are missing A lot of baloney _ the statement is mostly inaccurate but contains elements of truth Full of baloney _ the statement is completely inaccurate SOURCES: Jean-Pierre Blais speech to the Canadian Club of Toronto, Feb. 17, 2016. Interview with Michael Geist, Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law, March 8, 2016. Canadian Television 2020: Technological and Regulatory Impacts: A study by Nordicity and Peter Miller, Dec. 2015. http://news.gc.ca/web/article-en.do?nid=1037039 _ CRTC welcomes new era of choice for TV viewers Interview with Ian Morrison, Friends of Canadian Broadcasting, Feb. 29, 2016.
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