Canada’s broadcast regulator has been pushing cable and satellite companies for cheaper “skinny basic” TV packages. But executives from Shaw Communications Inc. believe they’ve already slimmed down enough, thank you very much.
Shaw president Peter Bissonnette said on a conference call with investors on Thursday that the Calgary-based company is not planning to offer more of its channels on a “pick-and-pay” basis, whereby customers are given more choice in which channels they buy. He said consumers are not asking for it and prefer to buy their TV services in bundled packages.
That statement appears to contradict a ruling made last month by the Canadian Radio-television and Telecommunications Commission. The regulator said that by April, television distributors would have to tell the CRTC what they have done to give customers more control over which channels they pay for.
Shaw’s chief executive officer, Brad Shaw, took a more conciliatory tone later Thursday, saying in an interview that there may be “some steps to be made” to offer more choice to its TV subscribers.
Mr. Shaw defended the progress his cable and satellite divisions have already made.
“We’ve taken some strong steps to provide more choice and flexibility,” he said, citing smaller channel packages and the new Shaw Plan Personalizer as examples. “We feel we’re in a bit of a different spot than others.”
For many in the industry, there is an economic incentive for resisting the move to completely custom-built TV packages. Distributors rely on offering tiered packages of channels to subscribers to maintain their profitability.
The exception is Quebec, where Vidéotron Ltée. began offering more à la carte channels in a bid to gain market share. There is customer demand for such an offering; Vidéotron has seen many of its customers choose pick-and-pay channels. Its competitor, BCE Inc., responded by doing the same. (Bell’s satellite service does not offer similar packages outside Quebec.)
“[For]the companies – when you move from packages where you have themes of multiple channels bundled together, to offering channels one by one – the tendency is to not make the same profit,” said Desjardins Securities analyst Maher Yaghi.
Mr. Shaw said cable and satellite players want to offer more pick-and-pay options, but it is sometimes made difficult by the deals they have made to carry specialty channels. That’s because broadcasters often insist on terms whereby they are carried in a favourable tier of channels, guaranteeing them more subscriber fees.
The company had net earnings of $82.5-million or 18 cents per share in the three months ended Aug. 31, it reported Thursday, a decline of 32 per cent due to losses from its decision to abandon plans to launch a wireless phone business.
Its revenue was $1.18-billion, up from nearly $938.9-million in the same period a year earlier.