Nordicity develops specialty channel valuation model based on CRTC-suggested parameters
Posted by Nordicity in Ottawa on Apr 03, 2012

Ottawa – April 2012 –Throughout late 2011 and early 2012, Nordicity assisted a Canadian BDU with its wholesale carriage fee negotiations by identifying fair-market-value for specialty channels in a variety of categories using a customized Nordicity valuation methodology.

The CRTC's Regulatory framework relating to vertical integration [Broadcasting Regulatory Policy CRTC 2011-601] mandated BDUs and broadcasters negotiate wholesale carriage fees for programming services on a stand-alone basis, ending the past practice of multi-channel, "take one, take all" negotiations. The framework also suggested eight factors to be considered when "negotiating a wholesale rate for a programming service based on fair market value" including: historical rates; penetration levels and volume discounts; packaging; rates paid by other BDUs; rates paid for similar services; demand for the service; stand-alone retail rates; and package retail rates.

Based on broadcaster's CRTC financial filings and up-to-date subscriber information provided by the BDU, Nordicity developed a methodology that assesses, weighs and combines the most relevant six of the eight CRTC-suggested valuation criteria. The method has been customized to identify a fair market value for:

  • Canadian specialty channels – English- and French-language;
  • American and other foreign specialty channels;
  • Specialty channels offered in the basic package; and
  • Specialty channels not yet offered by the BDU.

For more information on this initiative, contact  Stuart Jack, sjack@nordicity.com