In November, television industry insiders who gathered in Toronto for the annual CTAM Canada Broadcaster Forum were treated to a panel of real-life “cord-cutters” and “cord-nevers” – consumers who have cancelled their TV service, or never subscribed in the first place – bravely explaining why they felt traditional TV was no longer a must-have. The session was declared “off the record” so all involved would speak freely.
So-called cord cutting, and how to contain it, will be top of mind for many TV executives in 2016, as viewers will be given new choices. The federal broadcast regulator has promised rule changes to let customers choose which channels they pay for, and will require companies to shrink the size of basic cable and satellite bundles.
At the same time, and perhaps more importantly, new streaming technologies and online competitors built in the mould of Netflix Inc. are expanding, giving viewers a wider range of relatively low-cost alternatives, in turn causing some to rethink the value of their monthly TV bill.
In a year that could reshape TV, here are three things to watch for:
Skinnier channel bundles
The most talked-about change in 2016 will be the arrival of pick-and-pay – new rules from the Canadian Radio-television and Telecommunications Commission (CRTC) compelling cable and satellite providers to let customers add only the channels they want to a small basic package. The option must be in place industry-wide by Dec. 1, though with the CRTC also scaling back Canadian content quotas and opening up competition in channel genres, some companies may choose to move faster.
On March 1, viewers will get access to the $25 “skinny basic” bundle – made up of local and regional public-interest stations, and in some cases U.S. networks like ABC, CBS and PBS – which will be square one for those who want to build their own channel lineups.
So far, TV viewers have mostly stayed put. Canada’s major cable and satellite providers lost about 1 per cent of subscribers in the first three quarters of 2015, according to consulting firm Boon Dog Professional Services Inc.
But about a third of those surveyed by Charlton Strategic Research Inc. say they would consider adding pick-and-pay channels to a skinny basic bundle. And even a modest shift in viewers could put a big dent in the TV industry’s bottom line.
Streaming goes mainstream
In January, Bell Media promises to open its CraveTV service to anyone with an Internet connection in Canada. Since it launched in December, 2014, CraveTV has only been available to TV subscribers with certain providers, including Bell, Telus Corp. and Sasktel, among others.
The move, announced in July, was an about-face for Bell, which had previously argued streaming should support the existing TV ecosystem rather than bypassing it. But it was necessary to stay on par with its competitors, Shomi and Netflix. What that will mean for pricing remains to be seen: CraveTV costs $4 a month, tethered to a TV subscription, or “about as much as a latte,” as the company said in early promotions. But Bell will raise the price to $6 on Feb. 1.
What Bell hasn’t said yet is how much CraveTV will cost for those who don’t subscribe to its TV services. Shomi charges $8.99 per month, and Netflix has hiked the price for its standard package to $9.99 for new customers.
Bell also expanded its rights deal with popular network HBO in November, taking over as the channel’s national provider and locking up long-term rights to sought-after shows such as Game of Thrones and True Detective. It also ensured the new streaming service HBO Now won’t be coming to Canada to compete with CraveTV any time soon.
Local TV’s gut check
If broadcasters’ dire warnings are to be believed, 2016 could prove a pivotal year for local television.
Though almost no one disputes the importance of local news and programming to Canadian communities, or the deep attachment viewers have to their local stations, the business model sustaining these networks is in peril.
Total revenue flowing to private conventional TV stations in Canada dropped by nearly $141-million between 2013 and 2014 alone, due in large part to national advertisers pulling back on spending and the axing of federal funding.
Earlier this month, the parent company of Hamilton’s CHCH-TV cut more than half the network’s staff and pushed a subsidiary to file for bankruptcy. At the same time, the 30 local stations owned by Bell Media, the largest local provider, have collectively been bleeding money of late, and the company has warned some channels could be shuttered altogether without a new revenue stream to support them.
The CRTC has scheduled an eight-day hearing into local television starting Jan. 25, and it is increasingly clear something needs to change.
Editor’s Note: An earlier version of this story incorrectly said since the launch of CraveTV in December 2014, only Bell subscribers were able to sign up. In fact, since that date, CraveTV has only been available to TV subscribers with certain providers, including Bell and Telus Corp. This online version has been corrected.Report Typo/Error