For BCE Inc., the London Olympics aren’t about who can jump the highest or win the most points in the modern pentathlon.
The Games of the XXX Olympiad are a critical test of the company’s two-year, multibillion-dollar makeover and its “watch anywhere” strategy that delivers television broadcasts not only to the living room, but to smartphones, tablets and any other sort of screen a customer happens to be watching at the moment.
The company is using London as its stepping-out party for this plan, with which it hopes to steal thousands of customers from its rivals. It will offer about 1,100 hours of the games to wireless subscribers. By the time the Olympic flame is extinguished, its executives will have a much better idea of how many Canadians actually want to watch television on their phones, and whether BCE’s wireless network is up to the task.
“We expect to see an incredible explosion in adoption and absorption for every kind of content,” said Bell Mobility president Wade Oosterman in an interview. “The truth is a wireless device is available to everyone more often than anything else.”
The “pick a screen and fill it with goodness” strategy was set at the 2010 Vancouver games, when chief executive officer George Cope watched the women’s gold medal hockey game on his cellphone as he travelled to Vancouver from Whistler and was convinced the company’s future was in delivering content to consumers on devices other than television sets.
BCE is spending $3-billion a year to upgrade its cell network and has built a fibre network to hundreds of thousands of homes to deliver high-quality television and Internet connections that can compete with the best the cable carriers have to offer.
But to gain access to content, BCE agreed to buy broadcaster CTVglobemedia Inc. in 2010 for $1.3-billion in a controversial deal that some analysts felt would distract the company from its core mission of serving cellphone and satellite television subscribers. The company doubled down earlier this year, spending $3.3-billion to acquire Astral Media and its television and radio stations.
Now, the company’s dream of convergence faces a real test as it waits to see if Canadians will watch the Olympics on the mobile devices. The company owns a majority stake in the broadcast consortium that will air the Games in Canada (competitor Rogers Communications Inc. is the other partner, is not offering Games broadcasts to its wireless subscribers.
The goal is to steal subscribers from competitors using the lure of high-quality programming that is available on both its television and mobile networks. It’s already had some success with its relatively new Fibe TV service, which has 120,000 users after adding 33,443 in the last quarter.
One opportunity for revenue is the company’s mobile television offering, which allows its customers to pay $5 a month to watch 10 hours of television. Every additional hour costs $1 more. It’s already paying off, with Desjardins Securities analyst Maher Yaghi saying BCE is seeing 3.7 per cent year-over-year growth in average revenue per user – the best rate of growth in Canada.
“If we can get increased utility out of any device, then people will use it more and that tends to mean an uptick in average revenue per user,” said Mr. Oosterman. “Prices don’t have to go up if people are using their devices more, and we also get the benefit of higher retention because people say ‘I love this thing so I’m not going anywhere.’”
If the strategy is going to work at the Olympics, the company may need a little help from the country’s athletes. While consumer research by Charlton Strategic Research Inc. shows that most Canadians are interested in the Games – 51 per cent plan to watch some coverage every day – the amount of interest increases exponentially when there are compelling storylines, such as underdog victories and personal triumphs.
During the Vancouver Olympics, 90 per cent of all viewers watched on television, 64 per cent on computers and 22 per cent used a mobile device. Charlton president Gord Hendren said those numbers will likely be much higher for the London Games.
“We are projecting that online and particularly mobile will be up substantially again in 2012,” he said. “The most passionate Olympic fans are above-average users of digital media and tend to use all of them to have an enriched Olympic experience.”
The carriers' toolbox
Although BCE Inc.’s Bell Mobile TV is the only service offering live Olympic content over a mobile network, all wireless carriers are expecting a bump in data usage during the London Games as consumers stream video from sites including YouTube and Facebook. The number of people served by each cell tower varies depending on its size, design and the overall area it serves. The mobile video experience can also be affected if users are moving around or located in places such as underground garages.
Here’s what carriers have in their toolboxes to prevent their networks from crashing during high-profile events:
Carriers are constantly monitoring usage, including geographic hot spots, and adding extra capacity to their networks. They also model popular events such as the Olympics, royal wedding or FIFA World Cup.
Using load sharing if certain parts of the network are busier than others.
If there isn’t enough bandwidth, this type of video automatically reduces its picture quality to prevent stalling.
Carriers could give a higher priority to mobile video over other types of data traffic.
New users can be blocked if a cell sector is close to hitting capacity.
--Rita TrichurReport Typo/Error
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- Updated May 6 10:45 AM EDT. Delayed by at least 15 minutes.