Cable subscribers’ ability to choose channels is closer, but at a cost.

Viewers will be able to cherry-pick after CRTC ruling

The option for a cable-television viewer to pick only the channels they want moved closer to becoming a reality for millions of TV subscribers Friday.

Bell Media, the country’s largest channel owner, said it will allow television distributors such as Cogeco Cable Inc. and Telus Corp. to unbundle its channels and offer them individually following a regulatory ruling.

It is a risky gambit that could dent revenues at Bell’s entertainment unit, but a necessary strategy given a marketplace in which consumers are increasingly enabled to seek out content from competing sources — most of them Internet-based.

“We’re trying to accomplish twin objectives: To give more choice to viewers while ensuring the broadcast system remains healthy,” Kevin Crull, head of Bell Media, said in an interview.

The Canadian Radio-television and Telecommunications Commission decided Friday to adopt a proposal from Bell to allow its channels to be unbundled, while rates for individual networks will fluctuate based on the number of subscribers who sign up.

The ruling rejected a bid by a group of smaller distributors that included Cogeco Cable Inc. and MTS Inc. to keep a fixed rate on channels.

A key reason in accepting Bell’s model was the telecom giant’s relenting on its demand that cable partners distribute all 29 of its networks, which include channels like TSN, Discovery and MuchMusic. Instead, Bell will allow operators to sell services individually.

Those networks each generate hundreds millions of dollars annually in subscriber fees. To offset potential financial losses for Bell’s broadcast arm — which like other broadcasters must fund an assortment of subsidies that go toward Canadian content production — Bell will charge higher rates per channel.

“Fewer channels will mean unit costs for those channels will be higher than if you buy a bigger package,” Mr. Crull said. “There’s a volume discount” for viewers who take bigger TV tiers with more channels.

If TSN, for example, costs a cable subscriber $2.50 a month in a bundled package, individually, that fee could soar north of $10. Still, by opening up channels, consumers who want fewer channels at a lower cost will get their wish, Mr. Crull said.

Asked whether the new model will lower bills, which are averaging about $60 a month nowadays, he said, “It will for some people for sure. You will now have the ability and choice to buy a package that very well could lower your overall bill.”

The Bell executive said it is up to each cable company to decide on how it will package — or unpackage — Bell’s channels.

With Bell shifting away from “tied selling,” other major channel owners such as Shaw Media and Rogers Media are likely to follow suit.

Alongside the Global TV network, Shaw owns about 18 specialty channels, including HGTV and The Food Network. Rogers owns Sportsnet as well as OLN and The Biography Channel, among other networks.

“I think it’s an evolutionary step,” said Ted Woodhead, vice-president of regulatory affairs at Telus. “It’s an affirmation that skinny basic cable is the way to go, an affirmation that consumers should have more control and choice.”