Bell’s Kevin Crull happy with ‘business case’ for $4 CraveTV

The $4-a-month price tag for CraveTV, Bell Media’s new streaming service, is part of the company’s attempt to differentiate itself from competitors, according to Kevin Crull, president of BCE Inc.’s media division. “We’re not duplicating what you currently get from your TV subscription. We’re bringing something that isn’t there,” he said in a phone interview. “We thought $4 was the right price point in order to encourage Canadians to sign up in droves and to really get a very high adoption rate of this product.” Bell announced Wednesday it would launch the new service — which was previously known by the code name “Project Latte” — on Dec. 11. Wednesday’s announcement follows the launch in November of Shomi, a streaming service from Rogers Communications Inc. and Shaw Communications Inc. that costs $8.99 a month. When asked whether the service can be profitable at $4 a month, Crull responded that it’s a question that “keeps me up at night. But no, we really like our business model. “We absolutely think that this is the right product to meet a need for Canadian distributors, and that the price point is the right price point.” Crull added that while the company is “very pleased with this business case,” the service was designed to be flexible and adapt to a changing market and consumer behaviour. Richard Paradis, president of media consulting firm Groupe CIC, said in a phone interview that the $4 price point is “a little bit suspicious.” “How can they afford to get the kind of programming they’re going to need to try and compete, let’s say, with Netflix?” he asked, noting that Bell could increase the rates at a later time. At the $4 price point, Bell would “need a lot of subscribers to be able to get” quality programming, he added. Crull said there’s “absolutely” room for both Shomi and CraveTV in the Canadian market, noting that there’s currently hundreds of TV channels available and Canadians consume an average of 29 hours of TV a week. “There is almost an insatiable appetitive for great television,” he said. He said other streaming services are duplicating content customers can get through their TV subscription, such as movies, while CraveTV is “hyper-focused on premium television.” Paradis said that the various streaming services in the market are “going to cause a lot of clutter and a lot of difficulty for consumers to know where to go. Because are you going to stop being a subscriber to Rogers to subscribe to Bell to get CraveTV? Or are you going to quit Bell TV to go with Rogers to get Shomi?” “And in reality, why would I want to do that if I’ve already got Netflix?” he asked. Paradis added that there’s also “a limit to the content that you can actually get your hands on.” Unlike Shomi, which allows Rogers’ and Shaw’s Internet-only customers as well as TV subscribers to sign up, CraveTV will only be available to subscribers of Canadian broadcast distributors. Crull said part of the reason for that move is that about 90 per cent of Canadian households subscribe to TV, “and the vast majority of the 10 per cent who don’t sign up, they’re not TV lovers.” While cord-cutting gets a lot of attention, “there are not many people who are TV lovers and who are cutting the cord,” he said, and by targeting the nine million Canadian households with TV service, Bell is “going after the biggest base of potential customers that’s possible.” In a press release Wednesday, Bell said Eastlink TV customers will have access to the service when it launches, while “ Northwestel and other Canadian Cable Systems Alliance (CCSA) members will also provide the service soon.” It has already announced the service would be carried by Telus Corp.'s IPTV service, as well as Bell's satellite and IPTV services, and Bell Aliant's FibreOP TV. Crull said that he thinks other distributors will jump on board in the next two or three months. “We designed the product to be really friendly to the distribution model. We have an attractive wholesale margin that they make. We’re giving them the freedom and flexibility to package it and promote it how they want. We’re really supporting their core business,” he said, adding he also expects customer demand to prompt service providers to get onboard. Content watched through CraveTV will count against users’ data caps if they watch online, but not if they watch through the set-top box, which is also how Shomi works. And like Shomi, the service operates under the CRTC’s digital-media exemption order but abides by Bell’s VOD licences, Crull said. When it comes to the question of why customers would take CraveTV if they are satisfied with their VOD service, Crull said it’s because “there’s a ton of content that’s just not available .” “I think CraveTV is a real foundation for the future of Bell Media,” he said. “I think that on-demand services are increasingly going to be the way that Canadians consume television.” CraveTV will be available on devices running Apple Inc.’s iOS and Google Inc.’s Android operating systems though apps and via a website, Bell Media said in its press release Wednesday, adding that “early next year,” it will also be available through Xbox consoles, Microsoft Corp.’s Windows 8 and devices running on Windows Phone software, Samsung Smart TVs and Google’s Chromecast. At launch, almost two-thirds of the content will be exclusive to CraveTV, and in its first year, it will “feature more than 10,000 hours of premium, non-kids, TV content, representing more than 600 unique titles,” it said. That will include HBO series that are no longer on the air, including The Wire and The Sopranos, and content like episodes of Monty Python’s Flying Circus, comedies including Seinfeld and 30 Rock, as well as series like Star Trek, Doctor Who and Homeland. It has also said that it will sign a deal for several new series that will only be available on the streaming platform, and that its customers would get a 24-hour head-start on regular TV watchers when it comes to original Canadian programming. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Bell’s Kevin Crull happy with ‘business case’ for $4 CraveTV

Broadcast | December 3, 2014

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