Rogers needs Shaw to sell CanCon alongside OTT services

Top brass from Shaw Communications Inc. and Rogers Communications Inc. sought to convince CRTC officials that a merger of their two companies would be a boon for Canadian television programming in the face of increased competition from U.S.-based over-the-top streaming services like Netflix Inc., Amazon Inc.'s Prime, and Walt Disney Co.’s Disney+. Just over two weeks after his victory in the British Columbia Supreme Court, and less than a week after the ousting of CEO Joe Natale in favor of former-CFO Tony Staffieri, Edward Rogers appeared before CRTC commissioners and said that Rogers now competes not only with BCE Inc. and Telus Corp., but with a fresh set of adversaries. "We participate in a global industry, with global platforms that bring Canadians and people all over the world wonderful new products and services. However, they can also pose a challenge to Canadian companies and Canadian culture," Edward Rogers told the commissioners. "Bell and Telus are our primary competitors in cable, but it is a global world, and increasingly our competitors are global platforms and brands," he said. By delivering viewers to both streaming services and existing linear television, Rogers senior vice president of content and connected home products Erin Bruno told the CRTC commissioners in an opening statement, "we will encourage these customers to remain in the regulated system." Responding later to questions about how the acquisition of Shaw would contribute to the broadcasting system, Rogers officials said that the acquisition would shore up the viability of the Canadian content sector. "The cable industry is regulated in a way to promote Canadian content and carry contents of all times. To the extent that we expand our cable networks into new communities and to new groups of people that did not have the benefit of it before, I believe that that contributes to Canadian policy objectives," senior vice-president of regulatory affairs Ted Woodhead told commissioners. "One of the biggest threats the Canadian broadcasting system has is that pretty much, on any given day, any Canadian can walk into their living room, turn on their TV, go straight to Netflix, go straight to Amazon Prime video, go straight to Disney, and completely bypass the Canadian broadcasting system," Bruno said. "One of the most important things about IPTV is that it actually takes those over-the-top giants, it takes Canadian content, and it seamlessly integrates all that information, and it presents it together." CRTC chair Ian Scott noted a disparity between Rogers' average revenue per user (ARPU) of roughly $72, while Shaw's ARPU was roughly $61, and asked Rogers representatives what would happen with the lower-spending Shaw customers, and what the company's strategy was. "When you take a customer-first approach, we don't have, necessarily, an ARPU strategy for customers," Bruno said. Asked what assurances Rogers could provide that the rates of Shaw customers would not rise after a merger, Bruno pointed to Telus. "We've got to compete with Telus and anyone else in that marketplace. So the expectation is that we will compete at rates that it takes to win," Bruno said. Rogers also offered to share set-top box data with independent programmers for use on a platform called CYNCH, until a new reporting system is launched by Numeris, a media data company developing technology that will share the data. CYNCH is a "self-serve ad-buying platform, that allows advertisers to plan and purchase their advertising campaigns online," according Rogers vice-president for cable Pam Dinsmore. "Independent programmers who choose to participate in CYNCH will benefit from Rogers providing set-top box data free-of-charge as this data is required to build the audience segmentations used in booking advertising campaigns," Dinsmore said. The regulator also asked Rogers to include details of the severance package with ousted CEO Joe Natale in Rogers' calculation of the value of the Shaw transaction, if Natale's severance includes a consultant's fee on the Shaw merger going forward. Edward Rogers replied that the details of Natale's severance package are still being worked out, while Woodhead pushed back and questioned the relevance of the information. The company ultimately agreed to an undertaking, and will provide the details of the arrangement with Natale to the CRTC by Nov. 29, if such an agreement exists by then. — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Rogers needs Shaw to sell CanCon alongside OTT services

News | November 22, 2021

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Rogers needs Shaw to sell CanCon alongside OTT services

News | November 22, 2021

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