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Rogers Sportsnet‘s broadcast studio is seen in this file photo.

Fred Lum/The Globe and Mail

Rogers Communications Inc. will offer its popular Sportsnet television stations through a stand-alone streaming service, severing the ties that have bound live sports broadcasting to traditional television.

Starting on April 1, the company will offer Sportsnet Now – an app that streams the live feeds from Sportsnet's main regional TV stations, plus its One and 360 networks – as a separate online subscription costing $24.99 a month. Anyone can sign up, regardless of whether they get cable TV or are an existing customer with Rogers.

The decision to detach coveted and expensive sports programming from the traditional TV system – which remains the financial engine for broadcasters and media companies such as Rogers Media – is a leap of faith for the industry, and carries some risk. Many see live sports as the last bastion of stability in a broadcasting industry undergoing a digital upheaval. Sports are in high demand, watched live and command high prices.

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But it is also an acknowledgment of where the broadcast industry is heading, as streaming options change viewers' expectations, increasing numbers of TV subscribers ditch their subscriptions and some younger consumers never sign up in the first place.

"With other [over-the-top] offerings like Netflix, shomi and CraveTV already available, this development could further accelerate cord-cutting in Canada. Sports has generally been considered the mainstay of linear TV and this step marks a significant challenge to that thesis," Aravinda Galappatthige, analyst at Canaccord Genuity, wrote in a note on Thursday.

Sportsnet Now already existed, and is included with TV subscriptions to the Sportsnet channels. Yet, Rogers claims it is now the first major sports network in North America to offer its content live over the Internet to anyone willing to pay for it.

"This was clearly coming to a tipping point," said Scott Moore, president of Sportsnet and NHL properties for Rogers. "It's no secret that all the major networks have looked at this possibility. HBO has already gone there. So it was just a matter of time. We wanted to be first [for sports]."

The decision to open up its online Sportsnet comes as the Toronto Blue Jays begin a promising season, but also as Rogers's revenue is suffering from the fact that no Canadian team has qualified for the National Hockey League playoffs.

It also follows a similar move to offer shomi – the streaming service for movies and TV shows that Rogers co-owns with Shaw Communications Inc. – direct to anyone with an Internet connection last August.

But severing Sportsnet from the TV ecosystem comes with a greater measure of uncertainty. "It's our biggest [move], quite frankly," said Rick Brace, president of Rogers Media. "This is very experimental."

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The new stand-alone streaming service is aimed at so-called cord-cutters, who have ditched traditional TV, and cord-nevers, who have never subscribed to begin with. In that respect, Rogers hopes to tap a new audience. "We can't put our heads in the sand," Mr. Moore said, but the company hopes that the service will be "complementary," and not a replacement for TV to most.

After years of talks and negotiations with partners – including major sports leagues and TV providers – Rogers has crafted the streaming option carefully to try to ensure that it does not cannibalize the still-lucrative cable TV business.

To that end, Sportsnet Now's premium price tag is crucial. A Rogers TV subscriber who has the company's new $25 Starter package – the "skinny basic" bundle mandated by new federal rules – could add the Sportsnet channels for $18 a month, or Sportsnet and rival TSN together for $25, plus the cost of a set-top cable box.

"We're not undercutting our biggest partners," Mr. Moore said.

Mr. Brace was more blunt: "We wouldn't have done this if we thought it was going to materially hinder the current distribution that is vitally important to us."

For the time being, Sportsnet Now streaming customers will see the same feeds as TV subscribers, including the same ads. That means some regional NHL games will be blacked out. (Rogers is looking at bundling Sportsnet Now with its GameCentre Live service, which gives streaming access to out-of-market games).

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The company has bargained on and off for years to build the ability to offer programs outside traditional TV packages into its rights deals with sports leagues, and has renegotiated some contracts to make it work. The last major partner yet to sign on is the National Football League, but Rogers hopes to have a deal in place by September for its Thursday Night Football broadcasts. "We haven't had push-back," Mr. Brace said.

For now, Rogers is not expecting the new service to add substantial advertising revenue. "There's not enough scale there yet," Mr. Moore said. But the company has the potential to insert "dynamic" ads in future, targeting specific regions or demographics.

"Given the pricing of the product, it is being advertised mainly to sports fans that do not want to pay to watch other TV content, or even other sports channels such as TSN," Maher Yaghi, an analyst at Desjardins Securities Inc., said in a research note. "We note that for those who already subscribe to cable TV, and pay [$45 to $50] per month and get both Sportsnet and TSN, this product is probably not good enough for them to cut their cable subscription."

It also has the added benefit of putting pressure on archrival TSN, which is fighting to keep pace after losing most of its hockey broadcasting rights to Sportsnet. "Everyone is looking at different ways to attract new subscribers," Mr. Brace said.

"I think that what we're talking about here, if not innovative, it's progressive. It's modern thinking."

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