Skinny Basic TV Comes to Town

As of March 1st, 2016, all subscription TV (cable, IPTV, satellite) providers in Canada will have to offer a ‘skinny basic’ package, and the option to add on, at least, smaller packages of up to 10 channels or, at their option, à la carte pricing of channels – known as “pick and pay” (true pick and pay for all TV service providers will be required in December 2016). The ‘skinny basic’ is an entry level basic television package featuring local broadcasts, as well as cultural channels, the weather network, and the CBC. The capped price for this service is $25 (it does not include terminal rentals (set-top boxes, PVRs) or taxes).  The CRTC has summarized the skinny basic and pick and pay rules in a recent Bulletin.

Skinny basic, with or without pick and pay, is something we at PIAC have been pushing towards for over 10 years. Our research repeatedly has shown that Canadians were eager for the opportunity to have a ‘basic’ service option that isn’t bloated with channels or at a high price point.

With 1 in 3 Canadian households now subscribing to Netflix, and rising subscriptions to competing services “CraveTV” and “shomi”, the direction of the industry appears to be moving away from the massive pre-selected packages of programming and more towards viewing what you want, when you want. The decision by the CRTC may seem like a blow to subscription TV providers but, in fact, switching to a more choice-based interface appears inevitable – and may even increase demand and convince consumers who wanted certain channels but were turned off by the packaging schemes to stay in the subscription TV system.

We believe this is a great opportunity for both consumers and subscription TV providers. There are a growing number of cord-cutters and “cord-nevers” who, perhaps, could be enticed back into ‘plugging back in’ or plugging in for the first time, at a cheap price point and with some amount of freedom of choice. However, within the TV industry some do not see it that way. The CBC has cited sources saying that Bell is “…making the basic package simply unbuyable.” According to the article “The Bell training document states: “Do not promote the Starter TV package. There will be no advertising, and this package should only be discussed if the customer initiates the conversation.” Shaw has named their package “Limited TV”, which seems somewhat uninspiring for prospective subscribers. Rogers and TELUS, as of February 29, 2016 still have nothing on their site about the basic $25 package.

It’s unfortunate that this new product seems to be treated more as a burden than a blessing. There are some organizations that have embraced the basic package. VMedia touts the first skinny basic package offering “TheSkinny” for $17.95 (coupled with their required set-top box rental and internet service subscription, however).

Speaking of extra charges, during the CRTC’s consultation on a Television Code to protect consumers, PIAC and the National Pensioners Federation told the Commission that set-top box policies were a source of consumer frustration because they were often unclear and unfair. Additional charges for the box or applications weren’t always spelled out, customers renting their set-top boxes could ultimately pay far more than the value of the box without knowing who was responsible for replacing or repairing them, and customers still had to pay the same price to rent or own even as the value of set-top boxes depreciated.

The CRTC did not address PIAC’s concerns with such equipment charges when it issued the finalized “TV Code” early this year. However, the implementation of the new skinny basic package and the FCC’s proposal in the United States to open up competition for set-top boxes show that the equipment issue will remain relevant for some time.  Now it appears that set-top box charges and other disadvantages (like loss of or no offer of, bundle discounts and downgrade charges to move from higher cost TV packages to the new skinny basic plans) are plaguing early offers of skinny basic service.  PIAC will be watching these developments.

We hope that after the March 1st starting point TV service providers will push the basic package for what it is: an opportunity for consumers who have sworn off subscription TV, were considering it but hesitating, or who just couldn’t afford an expensive cable, IPTV or satellite TV package to get basic local television at an affordable price.

We’d also like to make sure that consumers who were anxiously awaiting these packages have a smooth transition either into the package or moving from their high priced package into the skinny basic. If you run into any problems with your provider while subscribing to or making a change to your cable/IPTV/satellite TV package, or you face high or unfair equipment charges, downgrade charges or loss of discounts, please contact us at piac@piac.ca and share your story with us.

We look forward to more affordable package being made available to consumers and the true pick and pay channel subscription service coming to all cable subscriptions in December 2016!

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