Roland Renner: Why can’t we get Hulu, Pandora, and other over the top Internet services in Canada?
By Roland Renner
Why can Canadians get some Internet video and audio services, but not others? With Rogers launching its over the top (OTT) service option on its Netbox 2.0, Canadian viewers will be wondering why they can get access to some services like Rogers Anyplace TV and Netflix, but not others like Hulu and Pandora.
Hulu is a website providing advertising-supported video services and premium subscription services. NBC, Fox, and Disney are all owners, which is why it has received so much publicity in the mainstream media. Pandora is an online advertising-supported audio service providing access to radio stations and other music sources. Individuals can adapt programming according to their subscriber listening history.
Hulu and Pandora aren’t licensed as Canadian broadcasting distribution undertakings. They could try to establish a business with sufficient Canadian ownership to meet the requirements and then launch service, but they would then run into another problem. They don’t own the Canadian distribution rights to the programming so U.S. and Canadian copyright holders will sue them unless they block access to IP addresses that they can identify as Canadian.
Access to programming content for video distribution is based on copyright, which is border-sensitive. Owners sell programming rights based on national boundaries and distribution methods. That’s why, for example, you can’t go to the video store or download (legally) a movie that just started showing in theatres. Distribution rights to rent the movie in video stores are sold with specified timing conditions.
Similarly, on television, a new U.S. comedy series is sold for first-run distribution to a network like NBC. NBC does not have Canadian television distribution rights. The Canadian television distribution rights must be sold to a Canadian network like CTV. This is why you see CTV ads when you are watching that show on NBC. The cable company is required to substitute the Canadian CTV ads into the NBC feed during that program. It’s called simultaneous substitution and it, too, is based on copyright.
The Internet distribution rights may be sold separately, but are becoming more expensive. At the beginning of Internet video distribution, rights holders saw it as minor incremental revenue opportunity that had little impact on their main revenue sources or they may not have even bothered trying to enforce these rights. Some viewed it as advertising for television. It now has changed.
When Netflix started, it obtained distribution rights at a very low cost, but when it became successful rights holders demanded more. Netflix had to raise its prices substantially and make wrenching changes to its business model that upset many customers. Netflix does hold Canadian distribution rights for the programming it delivers in Canada.
Internet distribution is now considered a major growth area and rights holders are charging more. As viewing patterns change, old deals are being renegotiated. In the U.S. rights holders have pulled major sports programming from cable and other distributors that weren’t giving holders what they wanted.
Canadians have tried to provide OTT service as early as the late 1990s. Inetcable.com was unable to get distribution rights and JumpTV became a niche programming provider.
Until there is a big change in the system of distribution rights, services like Hulu will not be available to Canadians. But there are other places to find alternative sources of television programming in Canada. If you live in a condo or apartment building in a large city you may have a competitive cable company like Novus in Vancouver.
Competitive distributors based on Internet technology have been licensed over the past year and are expected to launch soon in major markets. Driven by the technology, the CRTC has made packaging requirements more flexible.
From a pricing perspective, it was never going to be possible for Internet video to be free or cheap once large numbers of people started watching TV that way. The new technologies also enable pick and pay for those who have narrow, specific viewing needs. For others, though, Hulu, as well as traditional U.S. distributors show that big packages are still very popular with a large segment of the market.
Some Internet visionaries foresee a time when cable companies, networks, and television stations will disappear and consumers will deal directly with programming producers over the net. But we aren’t quite there yet, and it is going to take a while.
Roland Renner is a telecommunications consultant and is a research associate with the Frontier Centre for Public Policy.
Comments
7 Comments
steve tyler
Mar 9, 2012 at 7:55pm
steal it until they provide it
I'm not going to pay $100 a month for cable when I only watch 1 show.
steve tyler
Mar 9, 2012 at 8:10pm
furthermore, $100/mo is $1200/year.
Which is the same as a seasons pass to whistler or a new-to-me mountain bike.
cable can get f***ed
Larry Gritz
Mar 10, 2012 at 10:48am
Subscribe to a VPN service like TunnelBear, Witopia, or StrongVPN. For less than $10/month, you can have a secure encrypted connection that's great for use in hotels, cafes, airports, and the like, without worrying that people will be able to snoop your network packets even when using open wifi. But more importantly for this discussion, these services all have the ability to make your net connection appear to come from the US (and, depending on the exact service, sometimes dozens of countries) and thus access all the online streaming content you want without the services being able to detect that you are in Canada.
Globalization
Mar 10, 2012 at 12:58pm
The companies have not discovered globalization yet. Most movies and music are bought on the internet now but they still have these region restrictions on DVDs and Blurays. A small movie made in one country could increase sales if they could sell globally. The movie industry is losing a lot sales.
pirate party of canada
Mar 10, 2012 at 1:59pm
We don't get any of those streaming sites because of corporate contracts. Every region has their own media corporations who want full control over everything thus we have CTV in Canada streaming all the junk you'd see on Hulu.
Regional restrictions on media have always existed, enforced by the petty con men who milk millions from it.
But technology enables any Canadian to easily bypass the US IP restrictions and stream any content you want, or simply stream the pirated versions with all the ads cut out FTW.
Megaupload was said to doing 750 million per year in advertising. They didn't simply take the regular TV dinosaur method of inserting forced ads every 10 mins. They streamed uncensored content and instead had a completely different advertising method, which was way more profitable than anything Netflix/Hulu/CTV has come up with.
Media conglomerates cling to old ways of doing things, sabotage their own technology to restrict freedom, waste money hosting and streaming their own content when they could easily distribute it and then pour multi millions into lawsuits they hardly ever win suing everybody else for control.
They won't last past this decade. 2020 every middleman, agent, corrupt studio and producer will be out of a job. The art we make will still make money, just it will be an entirely different model eliminating the leeches.
Plum Duff
Mar 12, 2012 at 9:45pm
I just want to be able to view the Daily Show and Colbert Report clips that come up in the course of surfing.
Is that too much to ask?
Nalla
Mar 12, 2012 at 10:56pm
This is an issue that I have been talking about online for over a year now. The CRTC is so out of touch with the industry that it's DESIGNATED FOR! One of the biggest examples of this for me is Survivor. Survivor releases tons of deleted scenes, and extra interviews with the contestants that are never seen on tv, only online. Yet, they are blocked here through CBS, and Global does not provide them, so it's like basically saying that due to a geographic inconvinience you are not allowed to watch something that should be provided to you but isn't.
What really sucks is when you go to a site and they are posting Hulu videos and discussions and you can't get into the conversations because you can't watch the clips. As Canadians, weather it's cable or internet, we should at least be given the option to at the very least pay more to get all US service. Enough of the telecom companies acting like parents to their paying customers. Canadian telecom is severely broken, and as Canadians, we simply shouldn't take it anymore.