March 19, 2015 4:03 pm
Updated: March 19, 2015 7:44 pm

Canada to require a la carte television service by December 2016


WATCH: Jacques Bourbeau looks at what the newly introduced pick-and-pay model means for the industry and consumers.

GATINEAU, Que. – By the end of next year, Canadians will be able to pick individual television channels after subscribing to a “skinny basic” cable service costing no more than $25 per month.

The move to give Canadians more control over how they pay for TV they watch came Thursday in a decision from the national broadcast regulator.

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“Today’s decision reflects what we have heard from Canadians. More and more Canadians are watching the content they want when they want and on the multiple devices they choose,” CRTC chair Jean-Pierre Blais told reporters. “By March 2016 Canadians will have access to an entry level television service that costs no more than $25 a month.”

Last spring, the Canadian Radio-television and Telecommunications Commission launched the Let’s Talk TV hearings during which members of the public and broadcast distributors laid out their ideas for confronting the changing television landscape.

WATCH: CRTC chair Jean-Pierre Blais announced the regulator’s new Pick and Pay model which will come into effect by the end of next year.

The Harper government was pushing for the model the regulator revealed Thursday, allowing consumers to pick the channels they want to pay for.

The $25 basic service will include local and regional over-the-air channels, as well as little-watched educational and special interest services, such as CPAC and the Aboriginal People’s Television Network.

Blais characterized the decision as a way to prioritize local news and information programs.

However, unlike cable-only channels, local broadcast stations receive no compensation for the carriage of their signals and may be the most vulnerable to potential closure and job losses. The CRTC has recognized the tenuous state of local programming but deferred any decision on further supports for it until next year.

“This service will prioritize the local and regional news and information programming that so vitally connects viewers with their cities, their province, their territory, their country and the world,” Blais said.

WATCH: CRTC on potential job losses with Pick and Pay

Broadcast providers, including Shaw, Bell, MTS, Quebecor and Eastlink, opposed the idea of imposing a price cap on the basic service. They argued that doing so would limit their ability to improve services for their subscribers.

The changes to television subscription will come in a “responsible and measured” way, Blais said, referring to the staggered process detailed in the regulator’s ruling.

Come March 2016, providers will have to offer the “skinny basic” service and allow subscribers to augment that either through pick-and-pay or “small, reasonably” priced packages.

By December 2016, though, every provider will have to offer both options.

The regulator didn’t specify what it considers a “small” package, offering only an example of five or 10 channels, nor did it indicate what might constitute a “reasonable” price.

Providers were reluctant to support this change as well, citing studies predicting greater choice and flexibility for consumers would result in significant financial losses for providers.

WATCH: Shelly Glover, Minister of Canadian Heritage and Official Languages, says the government welcomes the CRTC’s Pick and Pay decision.

One such study, for example, forecasted that, in the worst-case scenario, unbundling could result in almost 11,000 job losses and an annual $1 billion loss in gross domestic product for the Canadian economy in 2020.

The regulator, however, decided that prediction was based on “highly subjective” assumptions and estimates.

“I won’t say that the results of this decision will mean that every service provider, broadcasting, programming undertaking will survive in this new environment. There may indeed be services that will not survive and there will be job losses,” said Blair. “Our view is, in this new environment, which is far more competitive good companies will find ways to innovate, compete and thrive if they are successful.”

With Thursday’s decision in the books, providers have more than a year and a half to get the infrastructure in place to provide basic skinny service, pick-and-pay and small bundles to their subscribers – enough time to minimize any impact on the national economy and jobs in the television industry, Blais said.

Canadian Heritage Minister Shelly Glover told Global News the government welcomes the decision, having previously advocated for pick-and-pay.

“We asked the CRTC in our speech from the throne to look at providing Canadians with more choice and that’s exactly what Canadians are going to get,” said Glover. “Canadians should not have to pay for television channels they don’t want, just in order to get the one that they do.”

Brad Shaw, CEO of Shaw Communications, said following the announcement “we support the Government’s direction and the Commission’s commitment to maximize choice for Canadians.”

“We are pleased that the Commission has built on the foundation of previous Talk TV decisions to support a bold yet balanced and orderly policy framework that will give Canadians increased choice, while providing producers, broadcasters and distributors more freedom and flexibility to innovate and create the next generation of content experiences for Canadians,” said Shaw.

“We commend the leadership of the CRTC Chairman and the opportunity to work with the Commission throughout the Let’s Talk TV process. While this new regulatory environment will not be without challenges, the Commission has provided real opportunities for Shaw to continue delivering the best content experiences possible for our customers and viewers within a healthy, dynamic and competitive environment.”

Global News is a division of Shaw Media.

*With files from Global’s Andrew Russell

© 2015 Shaw Media

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