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Quebecor president Pierre Karl Peladeau, right, and Robert Depatie, president and CEO of Videotron (Paul Chiasson/THE CANADIAN PRESS)
Quebecor president Pierre Karl Peladeau, right, and Robert Depatie, president and CEO of Videotron (Paul Chiasson/THE CANADIAN PRESS)

Vidéotron subscribers can now watch TV online Add to ...

In the United States, it's called TV Everywhere. But just one year ago in Canada, paid online TV wasn't anywhere.

Now, the strategy lauded by TV distributors like Comcast and Verizon is making its mark here: cable and satellite companies across Canada are launching online TV services limited to their paying subscribers.

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Another company joined the fray Wednesday: Vidéotron Ltée announced a new service for its customers to watch television on the Internet.

Illico Web offers access to 32 television channels - 24 are in French - but only to customers who subscribe to both cable television and Internet through Vidéotron. Customers log on to the Website to watch shows and movies, listen to music, and program personal video recorders (PVRs) remotely.

For television distributors such as Vidéotron, the benefit of offering the service is to prevent subscribers from giving up pay cable TV as more video becomes available for free (often illegally) online.

"Illico Web gives us a high-performance service … that is an alternative to piracy," said Pierre Karl Péladeau, the president and chief executive officer of Vidéotron parent company Quebecor Inc.

Piracy is a problem for companies whose revenues come from making or distributing shows. In Canada, the market for legitimate online content is still small: on average, 16 per cent of the viewing audience watched one or two full episodes on sites run by channels or their distributors in 2009, according to research by Convergence Consulting Group Ltd.

Viewers who do watch online are mostly young. Alternative viewing is on the rise: according to Solutions Research Group, Canadians' online TV viewing has doubled in the past three years. As mobile phones evolve, there are more opportunities to watch TV beyond the living room.

"They're not going to allow cord-cutting to ebb away at their base," said Brahm Eiley, principal at Convergence. "If you want to watch this content online, you're going to have to be a subscriber. That's the trend we're seeing across North America."

Bell TV and Rogers Communications Inc. launched similar online television offerings last fall. When Shaw Communications Inc. agreed in May to buy all of the TV assets of CanWest Global Communications Corp., chief executive officer Jim Shaw said the Western cable giant was preparing to offer more content on-demand and on other devices.

Web TV platforms require the partnership of content providers, such as Astral Media Inc., which owns channels such as HBO Canada and French-language women's network Canal Vie.

Illico Web will allow media partners such as Astral to sell advertising on the online platform, but there is a greater benefit: keeping subscribers happy means the most profitable part of the business - cable subscriptions and televised advertising, not online revenues - stays intact.

"They're making their money from cable subscriptions right now," said Iain Grant, an analyst with Seaboard Group in Montreal. "To make that cable subscription more valuable is a glue to bind you."

John Riley, president of Astral Television Networks, said "it's only a matter of time" before all distributors across Canada offer a similar Web TV service.

"If we don't offer our service on all the kinds of devices on which you're able to receive content, you won't be able to choose us and therefore you might go somewhere else," he said. "We've got to be there."

Vidéotron is hoping to expand the Illico Web service to offer more content so that it acts as a "mirror" of its TV offerings, said Robert Dépatie, Vidéotron's president and chief executive officer.

"We know there is a debate in progress about the distribution of content on the Web," Mr. Dépatie said, adding that the company will work to preserve the television system in Canada. "That for us is a priority."

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