Tuesday, July 20, 2010

And So It Begins…

Two years back, in posting updates from the NATPE Convention, I estimated that Canadian television networks only had a couple of years to change their ways or they'd be swamped by upstart technologies. It appears that prediction is closer than ever to coming true.


To be honest, I've sensed something unusual was in the wind since the CRTC delivered its broadcaster friendly semi-decision on saving Local TV back in April and the CMF simultaneously issued new funding rules which also primarily assisted established broadcasters.

Instead of ramping up development of new programming, our nets instead took a conservative path into their immediate future.

Little new drama or comedy was announced for the Fall and Execs seemed more indecisive than usual about what they wanted, content to increase the episode totals of shows with ratings that would have doomed them to cancellation a season or two previous.

While there has never been a huge appetite for risk at Canadian networks, even innovation suddenly took a backseat to taking the minority partnership in foreign made co-productions or tweaking formats to include more cheap reality or lifestyle programming.

I also began noticing that newscasters (particularly on Global) often tagged a story with an invitation to find "more" on the network website. Perhaps that is an attempt to drive traffic to their internet presences. But it also carries the faint odor of defeat, as if they know their current approach can't begin to offer the context and content real journalism requires.

Can you imagine radio in its heyday ever recommending people buy a newspaper if they wanted all the news or TV in the Walter Cronkite era suggesting you pick up a copy of TIME or NEWSWEEK if you really wanted to know more about Man walking on the Moon? It wouldn't happen.

And as another example of this odd malaise, Heritage Minister James Moore had to issue a request to the networks last week to stop dragging their feet and offer a plan on the digital transition scheduled for next summer. It included a terse reminder of Government policy: "We need solutions that will encourage innovation and new approaches, rather than asking Canadian taxpayers to subsidize existing business models."

It's like our nets have given up. Maybe that's just the hangover from a tough couple of years or a symptom of the dog days of Summer. Or maybe they got an early head's up of yesterday's announcement that their own dog's day is about done.


Netflix, arguably the most popular video service in the United States has announced that it will begin streaming movies and television into Canada this Fall.

While not having a menu as all-encompassing as Google TV, which also launches this Fall but which has not yet applied for access to the Canadian market; Netflix doesn't require the purchase of any additional hardware to deliver its content.

You don't even need to own a computer. The system is configured to be accessible by video game devices, PVRs, blu-ray players and almost any HD television manufactured in the last two years.

What's more, what you download from Netflix can be watched on your TV, your computer or transferred to your laptop or smart phone so you can take it with you. You can even watch the same movie on your business flight at the same time the rest of the family is enjoying it at home.

And unlike iTunes or other subscription download services, subscribers pay a single monthly or annual fee that gives them access to everything in the Netflix library. That library currently includes more than 3000 films and thousands of episodes of popular television series.

The current American subscription rate is $8.95 per month. So I'll predict something in the $12.95 range for Canada.

That's basically the monthly cost of a bundle or two of tired Canadian movie channels. I mean seriously, how many times can you watch "Exotica" or endure its being programmed over an endless number of different genre channels or cable platforms?

It's also about the cost of renting a pair of the VOD titles that have become a major revenue stream for our cable companies.

Perhaps more important in the conventional TV realm, Netflix is one more entertainment alternative to further dilute the audience pool.

Our networks could have spent the last decade creating content that would have continued to have value and earn them money on emerging formats like Netflix. But they didn't. They opted to empire build and renovate palatial offices and in-house studios instead.

No amount of lobbying at the CRTC will alter the outcome of those ill-advised decisions now.

If you're a Canadian TV viewer who wants more for your entertainment dollar, you can register here to be notified when the service is available.

And for you Canadian creatives troubled by the troubles afflicting broadcasters, just remember -- we're only losing buyers who were always reluctant at best to get involved in what we offered. This new guy is going to need lots of fresh content to keep their subscribers interested. 

We've got a future. The broadcasters who have ignored us -- not so much.


CanadianNick said...

I currently subscribe to Zip.ca, and although the service isn't bad, it's not great. Waiting four/five days for a DVD in the mail is annoying. They also subject your picks to a list, so if the physical DVD isn't available you get your next choice, and so on. I'm assuming that with a digital download (or stream) you can choose any film available in their library? Sounds perfect. My only concern is, how does this effect my downloading that's controlled by Rogers/Bell? Will they throttle me because I'm downloading too much? Will they charge me a ridiculous amount for going "over" what I'm allowed to use? Will I be paying $15 per month on top of the Netflix subscription fee?

Michael F said...

This is pretty exciting. PS3 just recently opened their own video store and I've rented 3 movies so far. That's 3 more movies than I have rented since 1998. The Abyss even got my money.

I think netflix in combo with my HD antenna will do me just fine.

And I see there are a lot of cheap pulpy unheard-of movies for rent in the PS3 store. Just the kind of movies that could make someone some money.

Brandon Laraby said...

Yeah, the inherent problem with this -- and a lot of people are going to learn this the hard way -- is that the 25 or so gigs you're meted out each month in bandwidth by the ISPs owned by said broadcasters is not going to keep up with your demand.

They're still going to get money from you when you have to (or already have) pay to have your download limit increased.

Also: Good luck watching this stuff on your mobile phone. Great idea in theory until you realize you just downloaded a 300 meg file on your phone and you're spending $25 a month for the 500 megs of data they allow you.

In the big picture, you're still paying the piper one way or the other -- especially if you're a mobile internet user in this country.

That's the inherent problem here - broadcasters or not, you have 3 people who own the pipes themselves. One way or the other, they're getting that money from you.

It's just that without the viewers watching on Traditional Broadcast they get to show up to the CRTC and cry foul while they rake in money hand over fist from their online and mobile sectors.

AT&T and Verizon are in the midst of destroying their 'unlimited' data plans exactly for this reason. They see the shell game their Canadian counterparts are playing and they want in.

Everyone knows the web is the future and these guys are all smiling 'cause they know that no matter what you're going to have to access that future through them.

That's why I think that, for all the piss and vinegar about 'Broadcast', none of these guys are all that worried.

jimhenshaw said...

It's my understanding that Netflix delivers its streams as compressed files. But I could be wrong.

Nevertheless, this does give consumers the choice between supporting venues that provide them with more options than the broadcast system or continuing to fund a system that doesn't maximize its use of Canadian talent.

As a great man once sang, "We all gotta serve somebody". But now you at least get some say in who that is.

Brandon Laraby said...

One additional concern I have with Netflix is this:

What sort of Cancon are they going to offer... if any?

Are they subject to the same regulations as our broadcasters? (I'm thinking not).

I guess I'm just wondering -- and if this makes me devil's advocate, I guess, so be it but: doesn't this sort of set us back a step the whole thing about getting Canadians to want to watch Canadian shows?

I mean, isn't it now just that much easier to drown ourselves in American-made programming... by choice now?

wcdixon said...

Yeah...throttling or bandwidth caps or extras charges for downloads over and above your limit are gonna make this struggle out of the gate i think.

Brandon Laraby said...

Hey guys, thought I'd point this in your direction and, sad to say, it is pretty much as I predicted:

"Rogers lowers download limits as Netflix looms"