CBC VIES FOR ONLINE STREAMING CUSTOMERS WITH $4.99 MONTHLY SUBSCRIPTIONS.
Plans $4.99 per month ad-free streaming
The Canadian Broadcasting Corporation will stream its live television stations online for free, a move that could further erode the value of traditional TV subscriptions in an era where many consumers are already cutting the cord.
On Tuesday, CBC TV started streaming its 14 regional linear television channels for free and launched a paid over-the-top TV subscription service for $4.99 per month. The premium service includes on- demand episodes without advertisements and CBC News Network, which was previously available as a stand- alone for $ 6.95 per month.
“Many Canadians are getting more and more of their content from digital overthe- top services like Netflix. We need to ensure our audiences can get CBC in the same way,” executive vicepresident of English services Heather Conway wrote in a memo to staff Monday.
CBC’s live TV stations have always been free overthe- air using an antenna, and are also included in the recently mandated skinny TV packages for $ 25 per month. But making them free online is a relatively new endeavour.
CBC has increasingly experimented with live streaming over the past year after previous success in live streaming major events such as the Tragically Hip’s final concert and the Olympics, Richard Kanee, CBC’s executive director of digital strategy, said in an interview.
“The reality is that an enormous portion of Canadians still enjoy live, linear television … that notion of being part of an event is really critical,” Kanee said.
Online viewers will have access to high-profile content including Hockey Night in Canada, the rights to which CBC sub- licensed from Rogers Communications Inc. after the cable giant bought exclusive NHL broadcast rights in a $ 5.2- billion, 12- year deal. Sports programming is widely seen as a way to keep people locked into their TV packages given the desire to watch games as they happen.
“( Rogers) understood the audience experience we were trying to deliver and it’s only a benefit to them that Canadians can engage with their favourite sport however they choose to do it,” Kanee said.
Viewers will occasion- ally see a title card or blank slate if CBC doesn’t have the rights to broadcast content online. For the most part, CBC will substitute commercials on its live TV feeds with ads tailored for the digital experience. Premium subscribers will also see these ads, as it didn’t make sense to replace them with blank slates during live streaming, Kanee said.
CBC sees its service as a complement to existing services such as Netflix, BCE Inc.’s CraveTV or Amazon Prime Video, especially as consumers increasingly subscribe to multiple services. CBC TV’s digital service is already popular, with more t han 1.1 million unique visitors in November, according to Conway.
Consultant Brahm Eiley of Convergence Research is cautious on how many paid subscribers will actually sign up for the service, which he said positions CBC for the future. But he believes free access will help CBC bring in more online advertising revenue.
“We believe t hat millions will ultimately sign up for the non- paying version which will be very helpful for advertising revenue,” he said.
The service is a great option for cord- cutters and cord-nevers who want access to live TV that’s often local, said Kaan Yigit, president at Solutions Research Group. But making one of Canada’s most popular channels available without a cable package may hurt the paid TV ecosystem, he said.
“It chips away at the value proposition for cable, IPTV and satellite TV offers if anchor tenants are also available fully outside of their ecosystem,” Yigit said.
“It’s not big or catastrophic by any means but it’s yet one more challenge being added to others already present.”
Prime- time ratings are down five to 15 per cent this year, Yigit added.
Approximately three quarters ( 76.2 per cent) of Canadian households subscribed to TV packages in 2016, down from 82.8 per cent five years prior, according to the federal broadcast regulator. Total revenue for TV services dropped to 8.7 billion in 2016, down two per cent from the previous year.
Meantime, 83.9 per cent of Canadian households subscribe to high-speed internet service. Total revenue for retail internet services hit $ 10.2 billion in 2016, up 10 per cent from 2015.
Approximately 44 per cent of Canadians subscribed to online video services in 2016. That proportion jumps to 64 percent for those aged 18 to 34.