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Canada Talks TV: Preparing for A-La-Carte Cable TV; Providers Threaten Rate Hikes

alacarte

Does Canada’s Food TV need special protection when it made 53% gross profits on the backs of cable subscribers that pay for the network whether they watch it or not?

“If you cut your cable, then your Internet is going to go up,” predicts Gary Pelletier, president of the Canadian chapter of the Cable & Telecommunications Association for Marketing.

That is just one of several predictions many Canadian cable and phone companies are claiming will come from the “disastrous decision” to allow consumers the freedom to pick and pay for only the cable channels they want to watch. Amidst claims that over 10,000 jobs will be lost, chaos and bankruptcy will stalk minority and niche cable networks, consumers will pay much higher bills, and American programming will boycott Canada fearing a-la-carte could make its way into the United States, Canada is at least having an adult discussion about the future of television and where it fits in the country’s identity.

Big changes are coming as a result of the latest great soul-searching made by our good neighbors to the north, always concerned about the potential of the Canadian Experience being overrun, if not decimated by the United States’ entertainment hegemony. In a moment of clarity, regulators have just realized what the rest of English-speaking Canada already knew: protectionist content regulations don’t work on the Internet. Canadians routinely bypass geographical restrictions and Canadian content laws with virtual private networks that relocate them, online at least, to a home address in the U.S. so they can binge-watch the unrestricted American versions of Netflix, Hulu and other online video services.

Regulators have now adopted the attitude – “if you can’t beat ’em, join ’em,” encouraging Canadian entertainment producers to create fewer, but better shows that will not only attract Canadian audiences, but those abroad.

Only the exchange is supposed to be mutual. High quality Canadian television productions like Orphan Black, Schitt’s Creek, X Company, The Book of Negroes, This Life, 19-2, Vikings, Killjoys, Rookie Blue, and Murdoch Mysteries are all among Canadian critics’ top favorites. But relatively few Americans know these shows exist or assume they are co-productions owned by some American entertainment conglomerate. Only a brief glimpse of a Canadian flag during the warp speed end credits might clue viewers this isn’t the case.

Despite protectionist media policies that have endured since 1970, the Canadians are now boldly going where Americans have so far feared to tread. They are having the conversation about the future of television and online entertainment in all forms while American media barons remain in denial.

For average consumers, the biggest change will begin next spring when the era of Canadian a-la-carte cable television arrives, allowing consumers to take an ax to the expensive 120-300 channel television package once and for all. Starting March 1, all Canadian providers will be required to offer consumers a basic cable package priced at no more than $25 a month, containing Canadian and U.S. over the air stations and networks, educational, and public channels. If you want more, you can have it by buying channels or mini-packages of networks individually to create a personalized cable TV lineup of networks you actually care to watch.

Programmers across Canada, particularly those catering to sports fans, foreign audiences, religious viewers, and minorities are horrified by the idea. So are media critics that fear the change could help bring an end to Canada’s unique multilingual and multicultural identity.

special reportCustomers like James Rehor of Hamilton explains why.

“Why would I pay for it? Why do I get it? Why does it come on my TV?” asks the 60-year-old construction worker. He’s ready on day one to purge the large number of French and other non-English channels from his Cogeco Cable lineup. Rehor offers comfort to sports programmers, however. He’s a big fan of the Toronto Maple Leafs, so Leafs TV, Sportnet, and TSN will stay.

Non-sports fans are another matter. They can’t wait to ditch the sports networks that are always the most expensive channels in a Canadian cable package.

“Clearly the most expensive (channels) will always be sports,” Pelletier tells the Canadian Press. “At the end of the day, for sports watchers, their cable bill will probably stay the same or increase, maybe … In the case of someone who doesn’t watch any sports at all, their bill will probably decrease.”

An Age of Abundance: Canadian telecom regulators are transforming media regulations in Canada, recognizing the way Canadians watch television has changed. Quality, not quantity, is now most important. CRTC chairman Jean-Pierre Blais discusses the new reality. (6:08)

Pelletier and his industry friends are on a mission to convince Canadians to leave well enough alone and not drop the current all-for-one price cable television package for a-la-carte — not realizing the potential consequences.

catnipSome in the cable industry have tried other scare tactics to no avail.

One industry-backed study predicted pick-and-pay could cost the economy 10,000 jobs. Consumers could care less. Unifor, a union that represents many in the television sector, seemed to agree Canada’s cultural heritage will be at risk with lowest common denominator programming dominating from St. John’s to Vancouver, much of it shoveled from the United States. But Canadians still want their House of Cards and Homeland.

Howard Law, a media spokesman for Unifor, predicts less profitable Canadian channels will fold under a pick-and-pay pricing model.

“The introduction of pick and pay will, in itself, lead to a major loss of revenues to Canadian broadcasting system, which ultimately plays out in less Canadian content and less Canadian jobs and less Canadian broadcasting,” he said in an interview on CBC’s The Exchange with Amanda Lang.

Minority interest and religious channels are also worried about their future. Most of those networks are classified as “specialty channels” by the Canadian Radio-television and Telecommunications Commission (CRTC). Legacy networks that have been around since at least the 1990s have been sitting pretty, protected by their designation as a “Category A” specialty station. Unlike in the United States, Canadian cable networks are licensed to operate by the CRTC, and at least 60 of those Category A networks also enjoy “genre protection,” a CRTC policy that guarantees their channel carriage on Canadian cable, satellite, and telco TV systems and protection from other cable networks that want to run the same kind of programming.

For decades, protectionist Canadian content regulations made certain Canadian television reflected its audience. But online video and the Internet has allowed Canadians to bypass traditional cable television to watch they want, not what the government hopes they will. New CRTC rules reflect that reality as Canadian TV rethinks how to get the viewer’s attention. From CBC-TV’s The National (4:16)

CRTC policies have allowed Canadian specialty channels to flourish despite operating in a smaller marketplace with fewer viewers than their American counterparts. That means networks like FoodTV and HGTV in Canada have profit margins ranging from 53-58 percent. Fashion Television and BookTV made an improbable $2.7 million in pre-tax profit, not so much from viewers but from the licensing fees every Canadian cable customer pays for the four networks whether they watch them or not.

From its inception, Canadian TV has always faced a looming shadow from the south. Protecting Canada's identity has been a priority for decades.

From its start, Canadian TV has always faced a looming shadow from the south. Protecting Canada’s identity has been a priority for decades.

“If you’re a specialty channel that’s lived within the protective cocoon of bundling for years, you’ve gotten used to having a full-time job with benefits,” independent technology analyst Carmi Levy told CBC News. “Contrast that with living outside the protective cocoon, you’re essentially a freelancer, you fight for every contract, you have no benefits, there are no guarantees that money will be coming tomorrow or next week.”

It probably won’t be coming from subscribers like Mr. Rehor, who won’t hesitate to drop channels if they go unwatched.

The CRTC is also doing some dropping of its own, starting with genre protection, which could lead many specialty networks to follow American cable networks that today depend on chasing ratings to justify their licensing fees. The unintended result in the United States has been questionable lineup changes like the appearance of Law & Order rerun marathons on WEtv, a network supposedly dedicated to women’s entertainment. Ovation, a fine arts independent cable network that is about a niche as a network can be, depended on weekend binges of PBS’ Antiques Roadshow reruns in 2012 just to attract enough viewers to show up in the ratings.

Lesser known networks like OutTV, Canada’s only network dedicated to lesbian, gay, bisexual, and transgender viewers, may face an uncertain future if it can’t charge a premium price to make up for expected subscriber losses from pick and pay. Other niche channels may have to merge with other networks or more likely relaunch with an online platform and deliver a reduced menu of content to audiences.

crtcLarge Canadian mainstream networks and programmers don’t expect too much change from pick and pay, as most Canadians will likely still demand a package with their programming included. But distributors – cable, satellite, and telco TV platforms, do expect some major changes. The average Canadian now pays around $50 a month for basic cable, a price that will be cut in half next spring.

Rogers Cable already knows what is coming. It ran a trial in 2011 in London, Ont., with 1,000 customers who were given the choice of picking and paying for the channels they wanted. It didn’t take long for the cable company to discover customers loved it and TV stations and cable programmers hated it.

“We found that customers like bundles, but want to build their own. They want a basic package and an extra package they create,” Rogers spokesman Kevin Spafford told the Toronto Sun. “We did get push back from TV stations. There was concern about offering this service. They did not want us to proceed with that model.”

After the trial ended, Rogers allowed the pilot project participants to keep their pick and pay packages, something they’ve held tightly for over four years.

Rogers’ pilot offered something like what the CRTC is demanding be available to all Canadians:

rogers logoROGERS PICK AND PLAY PILOT

  • $20 a month for “skinny basic” TV package of Canadian stations. (The CRTC plan mandates no more than $25.)
  • 15-channel package for $27 a month. Other packages of 20 and 25 stations also offered, for more money. (The CRTC wants networks to offer channels individually or in mini-bundles.)
  • U.S. major networks offered for $3 a month. (Under the CRTC policy, these stations may appear under the basic or a-la-carte tiers.)

REGULAR ROGERS

  • Basic: $40 a month, 190 channels
  • Digital Plus: $63, 220 channels
  • Sports packages: $77, 230 channels
  • VIP TV: $77, 270 channels
  • VIP Ultimate: $119, 320 channels

The upcoming changes are probably the biggest in Canadian cable television history, but they still may not be enough to attract cord-nevers — those who have never subscribed to cable TV. Most are under 30 and already watch all their favorite shows online. Some budget-minded Canadians who want to cut their cable bill may consider joining them by cutting the cord altogether or slimming down their cable packages, but Pelletier warns that cable operators will not leave their money on the table.

cablecordSupplementing a slimmer cable package with a streaming service or two could increase data charges, Pelletier warns. Plus, you may have to surrender any discounts you get from bundling cable with home phone, Internet and/or wireless service.

Usage capped Internet is also still an effective deterrent for cord-cutting and whether your television entertainment comes over the cable or online, providers will still make a run for your wallet. Some observers predict providers will dramatically increase the retail prices of a-la-carte networks to limit potential savings while also continuing to raise broadband prices.

A 2014 national PIAC poll found 90 per cent of 1,000 consumers polled were willing to pay an additional $1 a month per channel, while 54 per cent would be willing to go $3 a month, and 21 per cent would be willing to pay $5 a month for an extra channel of their choosing. Many don’t realize under the current system the wholesale rate for many channels is under 50 cents a month. Considering what Canadians are willing to pay, it is likely cable companies will price channels according to what the marketplace will tolerate, which could be around $3 for each channel a month.

Suspicion about any cable company offering a New Deal is something Americans and Canadians have in common. Mr. Rehor is already keeping a wary eye.

“I think it’s a good idea, I just don’t know how they’re going to really work it,” he says, fearing it could ultimately end up costing the same amount he pays now.

CBC News offers this extended discussion about the implications of “pick and pay” cable television. (10:11)

Cogeco Buys MetroCast Communications of Connecticut; Added to the Atlantic Broadband Family

metrocast-logoAtlantic Broadband will be the new name of MetroCast Communications of Connecticut, as Montréal-based Cogeco Cable, Inc., takes ownership of the small cable operator and its parent Harron Communications, L.P., in a $200 million deal.

MetroCast Connecticut’s network passes close to 70,000 homes and businesses across nine communities in eastern Connecticut including New London, Waterford, East Lyme, Montville, Plainfield, Killingly, Sterling, Griswold, and Putnam.

Cogeco Cable serves mostly suburban customers in parts of Québec and Ontario. Cogeco’s American cable operations are branded as Atlantic Broadband. The company serves customers in western Pennsylvania, South Florida, Maryland/Delaware and South Carolina.

The deal will add another 23,000 TV, 22,000 Internet, and 8,000 phone customers to the Atlantic Broadband family during the third calendar quarter of 2015, if the sale is approved by regulators.

 

Cogeco Won’t Lower Your Bill; Warns Customers Not to Be “Victims” of Landline Cutting

Phillip Dampier April 14, 2014 Canada, Cogeco, Competition, Consumer News Comments Off on Cogeco Won’t Lower Your Bill; Warns Customers Not to Be “Victims” of Landline Cutting

cogecoDespite growing competition from Bell’s fiber-to-the-neighborhood service Fibe, now expanding into many of Cogeco’s outer suburban service areas, Cogeco will not negotiate a better deal for customers, preferring to emphasize its customer service and “right-sizing” bundles of services to best meet customer needs.

As a result of higher prices, Cogeco’s earnings and profits are up for the second quarter of 2014. In the quarter profits rose to $58.5 million — up from $48.9 million during the same quarter a year ago. Revenue rose to $518.4 million from $458.5 million.

“We don’t like competing on price,” said Cogeco CEO Louis Audet said. “I’m not saying it’s zero, but we really don’t like competing on price.”

Audet

Audet

Customers have been offered sign up discounts from Cogeco’s most aggressive competitor on pricing – Bell. But when customers in parts of Ontario and Quebec call Cogeco to negotiate for a lower price, they are largely being turned down.

Audet said Cogeco instead emphasizes that customers will receive better customer service from the cable company, and customer retention specialists are trained to adjust packages to emphasize the services customers want without cutting their cost.

“It’s a right-sizing exercise,” Audet said. “Maybe the person wants a little less video, but they want higher Internet speeds.”

Cogeco isn’t winning the battle to keep its price-sensitive customers, however. The company lost 10,305 subscribers in the second quarter, nearly double the amount lost in the same quarter a year ago. Cogeco now serves 1.96 million Canadian cable television customers.

Customers are also dropping their Cogeco phone service, a decision Audet said makes them “victims” of cell phones. Cogeco permanently disconnected 6,000 landlines in the quarter, up from 5,550 a year ago. It still serves 473,000 phone customers.

The company lost almost 6,000 telephone customers in the quarter compared with additions of 5,550 in the same quarter last year. It had more than 473,000 residential phone customers left.

Despite the customer losses, rate increases more than made up for lost revenue, giving the company a nearly $10 million boost in profits during the second quarter alone.

HissyFitWatch: Canadian Telecom Companies Annoyed Consumers Getting The Upper Hand

Phillip Dampier February 12, 2014 Bell (Canada), Canada, Cogeco, Competition, Consumer News, HissyFitWatch, Internet Overcharging, Online Video, Public Policy & Gov't, Rogers, Shaw, Telus, Vidéotron Comments Off on HissyFitWatch: Canadian Telecom Companies Annoyed Consumers Getting The Upper Hand
Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

As the United States battles back against the introduction of usage caps and rising prices for broadband service, increased competition and regulated open wholesale access to some of Canada’s largest broadband providers have given Canadians an advantage in forcing providers to cut prices and improve service.

Canadians can now easily get unlimited broadband access from one of several independent ISPs that piggyback service on cable and phone networks. Some large ISPs have even introduced all-you-can eat broadband options for customers long-capped by the handful of big players. As customers consider switching providers, cable and phone companies have been forced to cut prices, especially for their best customers. Even cell service is now up for negotiation.

The more services a customer bundles with their provider, the bigger the discount they can negotiate, say analysts who track customer retention. Bell, Rogers, Telus, and others have a major interest keeping your business, even if it means reducing your price.

“It’s far more lucrative for the telecom company to keep you there for the third or fourth service,” telecom analyst Troy Crandall told AP. It cuts down on marketing, service and installation calls, he added.

Getting the best deal often depends on your services, payment history, and how long you have been a customer. Cellphone discounts are the hardest to win, but customers are getting them if they have been loyal, carry a large balance and almost never pay late.

telus shawBigger discounts can be had for television and Internet service — cable television remains immensely profitable in Canada and broadband is cheap to offer, especially in cities. Americans often pay $80 or more for digital cable television packages, Canadians pay an average of $60.

Internet service in Canada now averages $45 a month, but many plans include usage caps. It costs more to take to the cap off.

Because of Canada’s past usage cap pervasiveness, online video is not as plentiful in Canada as it is in the United States. There has been considerably less cord-cutting in the north. Despite that, Canadians are ravenous online viewers of what they can find to watch (either legally or otherwise). As usage allowances disappear or become more generous, online video and the Internet will continue to grow in importance for service providers.

Customers should negotiate with their provider for a better deal, particularly if Bell’s Fibe TV is in town. Bell has been among the most aggressive in price cutting its fiber to the neighborhood television service for new customers ready to say goodbye to Rogers or Vidéotron.

Shaw and Telus battle for market share in the west and also have room to cut customer bills and still make a handsome profit.

Quebec’s Cogeco Shopping for U.S. Cable Companies to Buy

Phillip Dampier February 6, 2014 Atlantic Broadband, Canada, Cogeco, Competition Comments Off on Quebec’s Cogeco Shopping for U.S. Cable Companies to Buy

cogecoWith the Canadian cable business locked up by Shaw, Rogers, and Vidéotron, Ltd., suburban Ontario and Quebec cable operator Cogeco announced intentions to acquire at least one small U.S. cable company later this year after it pays down more debt.

CEO Louis Audet told shareholders that cable operators in Canada are large, very profitable, and absolutely not for sale. That leaves few growth opportunities for the fourth largest cable operator in Canada. Instead of spending money to expand its current footprint into unserved areas, the company will look south of the border for buying opportunities.

Audet

Audet

“What you see is pretty much what you get unless something really special comes out of left field,” Audet said. “The potential exists in the U.S. where it doesn’t in Canada.”

Cogeco’s financial resources are too limited to challenge the three largest cable operators in the country, and Audet said Cogeco has no intention of selling its own business. In eastern Canada where Cogeco provides service, Rogers Communications would be the most likely to buy Cogeco. Rogers tried, and failed, to acquire Quebec-based Vidéotron in 2000 — losing out to media conglomerate Quebecor. But Rogers did succeed in picking up Shaw’s Ontario-based Mountain Cablevision, Ltd. last January.

Cogeco has pursued other cable companies outside of Canada in the past. Its acquisition of Portugal’s Cabovisao in 2006 was widely panned, and after Portugal’s economy crashed in the Great Recession, Cogeco ended up writing off its net investment, taking a $56.7 million loss. Cogeco acquired Cabovisao for $660 million and sold it to ALTICE six years later for the fire sale price of $59.3 million.

atlanticIn 2012, Cogeco acquired rural and small city cable operator Atlantic Broadband for $1.36 billion. Atlantic offers service in Pennsylvania, Florida, Maryland, Delaware, and South Carolina — mostly in communities ignored by Comcast and Time Warner Cable.

Possible Cogeco acquisition targets include Cable ONE, WOW!, Wave Broadband, SureWest/Consolidated Communications, Midcontinent Communications, Buckeye Cable, and/or Blue Ridge Communications, to name a few.

In the meantime, Cogeco is following the lead of U.S. cable operators by intensifying service expansion in commercial areas, particularly industrial parks and office complexes. Selling larger businesses cable broadband could net Cogeco $600-1,200 a month per account.

Cogeco Asks New Tenant to Cover Old Renter’s $1,500 Cable Bill Before Connecting Service

Phillip Dampier February 28, 2013 Canada, Cogeco, Consumer News Comments Off on Cogeco Asks New Tenant to Cover Old Renter’s $1,500 Cable Bill Before Connecting Service
Cogeco red-flags addresses where its deadbeat customers live.

Cogeco red-flags addresses where its deadbeat customers live.

An Ontario cable company is refusing to hook up service for a new renter until the former tenant’s $1,500 past due balance is paid in full.

Cogeco Cable told its would-be customer it could not install his broadband, phone, and cable-TV service, even though the renter offered to provide a letter from his landlord asserting he had no relationship to the earlier tenant.

The cable operator’s “skip” policy, which flags accounts disconnected for non-payment, can make life difficult for the new renter or property owner. Cogeco’s policy is designed to stop disconnected customers from restarting service under someone else’s name.

In some cases, Cogeco has reportedly even disclosed personal details about the owner of the past due account, along with a detailed breakdown of the services and charges they incurred.

Customers who have encountered a red flag from Cogeco when attempting to sign up for service have been asked for a notarized letter, preferably from a personal attorney, disavowing any relationship to the former account-holder, along with copies of property transfer documents.

A Cogeco representative tells Stop the Cap! the potential customer was misinformed. Cogeco will not hold a new customer accountable for another customer’s past due balance.

Customers who encounter problems because of “flagged” accounts or addresses should ask to speak to a supervisor. Some supporting documentation may be required in some instances. But usually the supervisor can approve the order and help the customer set up service over the phone.

Cogeco Boosts Speeds, Monthly Usage Allowances for Customers in Québec

Phillip Dampier February 11, 2013 Broadband Speed, Canada, Cogeco, Internet Overcharging 3 Comments

cogecoCogeco customers in Québec will find faster speeds and a larger usage allowance for most of the company’s broadband packages.

The changes took effect Feb. 1. Customers can get the new speeds by briefly unplugging their cable modem, resetting it.

  • Express 5 now offers 5/1.5Mbps service with a 25GB monthly cap;
  • Express 10 now offers 10/1.5Mbps service with a 60GB monthly cap;
  • Turbo 14 now offers 14/2Mbps service with a 80GB monthly cap;
  • Turbo 20 now offers 20/2Mbps service with a 100GB monthly cap;
  • Ultimate 60 now offers 60/2Mbps service with a 300GB monthly cap.

“Internet needs are rapidly evolving,” said Ron Perrotta, vice president of marketing and strategic planning at Cogeco Cable. “We have taken into consideration the feedback received from our current residential customer base, and made the necessary changes in order to meet the needs of the vast majority of our customers and provide them with more competitive internet offerings.”

If Cogeco surveyed their customers regarding getting rid of usage caps altogether, the answer would likely be yes. But that is a question Cogeco does not seem willing to ask.

Cogeco offers different plans for customers in Ontario:

cogeco plans

Canada’s Cogeco Cable Buying Atlantic Broadband in USA

Montreal-based Cogeco Cable has announced it is acquiring Atlantic Broadband, a cable operator serving small communities in Pennsylvania, Florida, Maryland, Delaware and South Carolina for $1.36 billion, raising investor fears the company is once again on a spending spree.

Cogeco’s tarnished record of cable acquisitions was highlighted last year when it was forced to write off almost $250 million in losses racked up by its Portuguese acquistion Cabovisao. The company finally sold the money-losing operation at a loss in February.

Cogeco stock plummeted more than 17 percent on today’s news, and investors are concerned Cogeco’s entry into the U.S. market is competitively risky.

Atlantic Broadband’s cable systems were acquired from Charter Communications in 2003. Charter was consolidating its operations into larger markets, and the systems along the eastern seaboard were deemed too small to create the kind of large, regional clusters cable operators prefer today. Atlantic only serves around 252,000 customers nationwide, almost all in smaller communities and cities. That mirrors the way Cogeco operates in Ontario and Quebec — primarily in smaller cities bypassed by larger operators Rogers Cable and Vidéotron.

Cogeco CEO Louis Audet believes growth opportunities in Canada are limited at best. He defended the acquisition as an entry point in the United States, signaling Cogeco was going to continue shopping for other small U.S. cable operators.

Cogeco is paying about $5,400 per subscriber, according to Bloomberg News. That compares with $4,418 Time Warner Cable paid per subscriber for Insight Communications, and $5,486 for each Knology customer acquired by WideOpenWest LLC.

Cogeco acquired Atlantic Broadband from private-equity firms Abry Partners and Oak Hill Capital Partners.

Cogeco’s ‘Value Plan’ Doesn’t Offer Much Value: $19.95 for 4Mbps With 15GB Cap

Cogeco Cable is mailing flyers to residents in eastern Canada promoting the company’s ‘value’ option:

  • 4Mbps download speed
  • 12 Month Contract with $75 early termination fee
  • Increases to $32.95/mo off contract
  • “Generous” 15GB usage cap with $1.50/GB overlimit fee (maximum penalty: $50)

Cogeco calls this plan ideal “for anyone who uses the Internet to exchange emails with friends, search sites and download pictures.”

In other words, it’s barely broadband for those who barely use the Internet.

Many Ontario and Quebec phone companies can offer even faster speeds through traditional DSL service. In Bell Fibe areas, for $6 more a month, customers can get a 15/10Mbps package for $26.97/mo for six months, which includes a safer 75GB allowance. At the end of six months, threaten to walk and Bell will extend the offer an extra six months.

Customers bundling services with either Bell or Cogeco may be able to negotiate for a package with better speeds and a more generous allowance. While Cogeco has cracked down on promotions, Bell has not, so customers served by Cogeco are advised to ask about all available deals before committing to either provider.

 

Shaw, Cogeco Customers Exposed to Gay Porn During CHCH-TV’s Morning News

Phillip Dampier April 26, 2012 Canada, Cogeco, Consumer News, Shaw Comments Off on Shaw, Cogeco Customers Exposed to Gay Porn During CHCH-TV’s Morning News

CHCH-TV in Hamilton, Ontario.

The cable industry seems to have an increasing problem keeping adult entertainment on the right channels.  Just a week after Colorado viewers were treated to an XXX-rated wakeup call during Good Morning America, cable viewers across western Canada and parts of Ontario got an eyeful of gay hardcore porn for several minutes Friday during CHCH-TV’s News Now AM morning news.

The unwanted programming, which also turned up in public viewing areas such as airports and diners, caused more than a few to put down the Tim Horton’s coffee and pick up the phone.

The Hamilton, Ont. television station initially got the blame. So many Canadians were talking about it, the station became a trending topic on Twitter.

“Just eating some pancakes this morning watching #CHCH … I no longer like pancakes or the news,” wrote Twitter user @derek1913.

“We were stunned at first, and those of us who could see it just stopped talking and tried to absorb what we were seeing,” says Joan Kelling, a Stop the Cap! reader who saw the spectacle on an airport restaurant’s televisions. “A few moments later, people were pointing and laughing nervously, everyone was getting on their phones, and some employees were hurriedly trying to switch off the sets.”

Kelling says the scene she saw was particularly explicit.

“It went on and on,” Kelling says. “Gay or straight aside, parents will be answering questions over this one.”

So will Shaw and Cogeco Cable, who were responsible for treating viewers to the racy movie in the morning.  CHCH didn’t wait for a blow by blow explanation from either company before taking to the air with an apology.

“First of all, we would like to apologize to our viewers,” said CHCH news director Mike Katrycz. “This was a problem that originated, not at CHCH, but at a cable company. Apparently some cable lines had been cut, and in the splicing back together some inappropriate content went to air. Again it was beyond the control of CHCH, but we do apologize to our viewers.”

Cogeco, Shaw Cable, and the Canadian Broadcast Standards Council have all launched independent investigations into the matter.

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