Cable providers readying for full pick-and-pay with theme packs

Some companies are adding more selection to their cable TV packages by going the theme-pack route in preparation for the mandatory full pick-and-pay rules coming into effect this winter. The CRTC laid out the rules for unbundling cable packages last year. In March, the regulator required companies to provide skinny-basic packages for no more than $25 per month and give customers the choice of pick-and-pay for channels or smaller, reasonably priced packages. By Dec. 1, however, companies will be required to offer all of these options. Last week, Rogers Communications Inc. launched three new TV packages with select channels to accommodate the new rules. "These new packages follow the launch of our Starter package and the introduction of standalone channel selection coming by December, bringing even more flexibility," Andrew Garas, a spokesperson for Rogers, said in an email. He added that "starting Sept. 15, customers will be able to add Starter Theme packs to these new TV packages, offering even more choice and we'll be launching full stand-alone channel selection later this year." The themed packages, titled Select, Popular and Premier, will offer a limited number of channels — based on categories including primetime TV and sports, family time and the TV buff — and will include bonus channels. Prices vary with the number of channels on offer. "We offer some à-la-carte options and theme packs and will be launching full à-la-carte selection later this year," Garas said. In February, Rogers introduced theme packages — including ones based on game shows and religion — that cost between $3 and $18. Last year, Telus Corp. surpassed one million customers since launching Optik TV six years ago, a service that offers customers in British Columbia, Alberta and Quebec pick-and-pay with small theme packs and à la carte channels, Shawn Hall, Telus spokesperson, said in an email. "Telus offers 25 theme packs and 140 à la carte channels, allowing our customers to create their own programming setup tailored to their unique viewing interests," Liz Sauvé, a Telus spokeswoman, added in an email. She added that Telus will be launching more à la carte channels in the future. "We made both individual channels and small packages available when we launched our Starter TV offering in February, which we believe put us ahead of our TV competitors," Caroline Audet, BCE Inc. spokesperson, said in an email. Bell's Starter TV was a 26-channel skinny-basic offering with the option of add-on channels, starting at $4, or in a now-$20 10-channel package. Other options include HBO Canada and The Movie Network package for $20 and a seven-channel sports package including Bell's TSN and Rogers' Sportsnet for $25. And Shaw Communications Inc. launched its Limited TV, also in February, offering small theme packs with existing TV packages. "For companies that will not have an à-la-carte service, smaller packages will not solve the age-old problem of, ‘yea, I really want two of those eight channels, but unfortunately I can't get those two without having to buy the six that I don't want, whether they're in the same theme or not,'" Troy Crandall, an analyst at 3Macs, said in a phone interview. In a March research note, analyst Drew McReynolds of RBC Dominion Securities said that the new skinny-basic options provided by TV providers are designed to protect profitability and/or incentivize households to largely stick with existing channel bundles, which in some cases have improved. A June report from PwC found that over-the-top (OTT) video services had an impact on traditional subscription TV, with costumers cancelling part of their subs to supplement more basic channel packages with OTT video services. Shomi, the OTT service from Rogers and Shaw, reported on Monday that it had more than 143 million video plays since Aug. 20, 2015. Sauvé said, "during a period of cord cutting, Telus' TV offerings have proven very attractive to our customers." In light of the trend toward OTT services, Crandall said cable TV providers are "trying to increase the attractiveness of the packages. I think they realize that a lot of people are getting a lot of their content in alternative ways." He added: "I think what they're doing is just paring it down so they can be more competitive on price, also maybe going for the more-watched channels." Big data and analytics are being used more and more in telecom and in almost every industry, Crandall said. "I think they're using more and more data to see what people are doing and what are the trends if these guys are absorbing a lot of online content, what are they still watching… and maybe, more importantly, what are they not watching." It's best that the new services on offer from cable providers be complementary to OTT, Crandall said. "If it were me, I would try to tone down what people are getting a lot of already from Netflix because chances are, you won't get a lot of uptake on that," he said. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Charelle Evelyn at cevelyn@thewirereport.ca

Cable providers readying for full pick-and-pay with theme packs

Broadcast | August 23, 2016

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