MONTREAL – Specialty media company Astral Media says foreign Internet competitors such as movie provider Netflix should be subject to the same rules as Canadian broadcasters, noting digital competitors don’t contribute to local programming or pay taxes.
“They come here and don’t spend a penny,” chief executive Ian Greenberg said after a speech that outlined the 50-year history of Astral, formed in 1961.
“They don’t have any rules whatsoever,” he said. “Taxes are another issue. All that money is leaving the country. It doesn’t help the economy. It doesn’t employ people.”
Astral provides pay TV services such as The Movie Network, which has almost two million subscribers.
Astral and most other Canadian broadcasters have pressed the federal broadcast regulator for stiffer rules on Netflix operations in Canada so all movie providers face a level playing field – no matter whether they broadcast over the airwaves, on cable or via the Internet.
The CRTC exempted new media services delivered over the Internet and mobile devices from regulation in 2008, but Astral is part of a 40-member group that has asked the Canadian Radio-television and Telecommunications Commission to hold public hearings on the matter.
Get weekly money news
Astral’s television services and radio stations contributed $170 million dollars to Canadian content last year, Greenberg said during his speech to Montreal’s Canadian Club.
The CRTC and the federal government must ensure that rules put all broadcasters, TV or Internet-based, on a level playing field, he said.
Netflix has about one million subscribers in Canada, but Greenberg said Astral can’t prove that it lost subscribers to the service.
Greenberg said Netflix Canada doesn’t have the same kind of first-run movies or exclusive content from cable companies HBO or Showtime, calling Netflix’s content “library product.”
However, Netflix is competing for licensing rights with TV networks and pay TV services for content.
Astral (TSX:ACM.A) also has lengthy deals with U.S. cable channels HBO and Showtime for exclusive programming to broadcast on its pay TV services such as The Movie Network.
Greenberg also said he sees strong growth ahead for Astral’s specialty and pay TV channels and said there doesn’t seem to be a “plateau” for pay TV.
“Even in the worst times of the economy, people come to appreciate that they need some diversion in life, that they need some entertainment.”
About 25 per cent of cable subscribers also take Astral’s pay TV services, he said.
In its recent financial results, Astral has said its third-quarter net income increased as advertising grew in both its television and billboard operations.
The company’s profits rose slightly to $49.3 million, or 87 cents per diluted share, from $48.5 million, or 85 cents per share a year ago. Revenue lifted to $268 million from $253.6 million.
Astral said its television advertising revenue grew 11 per cent in the quarter.
Astral is Canada’s largest pay and specialty TV broadcaster. It is also the largest radio company with 83 radio stations in 50 Canadian markets, and the third-largest outdoor advertising company.
Comments