Cable TV Unbundling Coming to Canada, in 2016

Cable TV channel unbundling--though not complete unbundling--is coming to the Canadian market. By the end of 2016, subscription TV customers in Canada will be able to buy many channels they want, one by one or in small packages, the Canadian Radio-Television and Communications Commission has ruled.

By the end of 2016, TV subscribers will have the option to add those networks to a “skinny” basic cable package that will cost no more than $25 a month. But consumers can buy a traditional bundle of channels if they choose.

Distributors must have the “skinny” basic service announced Thursday in place by March, 2016.

That tier must include all local and regional stations, public interest channels such as the Aboriginal Peoples Television Network (APTN), education and community channels, plus provincial legislature networks.

If distributors wish, they can add national over-the-air stations such as CTV, City and Global, or U.S. networks ABC, CBS, NBC, FOX and PBS. But they cannot raise the price beyond $25 a month.

By December of 2016, other channels must be available a la carte. But those channels also can be sold in a small bundle of perhaps five or 10 channels, which might be built by the viewer or the distributor.

It isn’t yet clear what the impact will be, as consumer can buy the traditional bundles or the skinny bundles, plus a la carte channels. At some point, the traditional bundle is cheaper, so many consumers will not switch.

One issue might be how many non-subscribers will find the skinny bundle--with or without a la carte channels--attractive. Another issue is the extent of downgrades to the skinny bundle.

Some of us would not expect significant changes in subscription rates. But to the extent there are changes in average revenue per account, the pressure has to be to the downside.
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