Bell Media's new video-streaming service Cravetv comes loaded with hit shows such as Seinfeld and The Sopranos, but also an eye-catching price tag: It will cost $4 a month, or less than half what subscribers pay to its main competitors.
Like most bargains, it comes with a catch. Cravetv's library of 10,000-plus hours of streamable television shows – which is planned to double within a year – will be available only to those who already have a TV subscription with a partnering provider. Bell's most basic Fibe TV bundle currently costs $41.95 a month.
The new video-on-demand service from the media arm of BCE Inc. is tailored both to keep customers in the traditional TV system, and to undercut competitors such as U.S.-based Netflix Inc. and the recently-launched Shomi, owned by Canadian cable giants Rogers Communications Inc. and Shaw Communications Inc., which both charge between $8 and $9 a month. BCE owns 15 per cent of The Globe and Mail.
Bell Media president Kevin Crull said in an interview that he believes Cravetv can be sustainable at $4 a month, but he sees it as a complement to traditional TV, not a replacement. And while the service will be ad-free at launch, Mr. Crull left the door open to introduce ads in future.
"The television that's on other streaming services, and that's on Cravetv … wouldn't exist if you didn't have the traditional TV system. So you really can't sustainably have one without the other," Mr. Crull said.
When it launches on Dec. 11, Cravetv will be available to TV subscribers with Bell, Bell Aliant Inc., Telus Corp., Eastlink and Northwestel.
But the $4 price point may also have pitfalls, according to Kaan Yigit, president of Solutions Research Group. Many TV consumers already think they are paying for unused channels and some might balk at forking over even a few dollars more on a $70 monthly bill, he said. At the same time, a service priced too far below the industry benchmark will lead some to question its quality.
"When it's reasonably well known that Netlix is $8 and Shomi will come in around that price, $4 may paradoxically signal to the consumer that it's really not in the same league as those, even if it actually may be," he said.