PICK AND PAY A GO
Cable choices to expand
Canadians are about to get more choice when it comes to the television channels they pay for, but a lot of them will probably stick with what they know, analysts say.
On Thursday, the Canadian Radiotelevision and Telecommunications Commission announced it will require cable companies to allow customers to pick and pay for only the channels they want, or only the small bundles of channels they want, on top of a stripped- down, $ 25 basic package by December 2016.
The announcement was highly anticipated because it’s expected to have the biggest impact on Canada’s cable companies of all the decisions related to the Let’s Talk TV hearing into the future of television held in the fall.
One rationale for the pick andpay decision is that cable companies need to start off ering consumers more choice if they’re going to stop them from cancelling their subscriptions and signing up for online- only services like Netfl ix Inc. instead. Edward Jones analyst David Heger said the announcement probably isn’t enough to convince young people who have never bothered to pay for a cable package to sign up now, however.
“We’ve seen subscriber levels decline for several years,” he said. “I think we’re going to continue to see paid TV households dwindle off .”
Heger pointed out that just because consumers will be able to pick and pay for the channels they want doesn’t necessarily mean they’ll be saving money.
Because the CRTC decision allows customers to keep the cable packages they have now, a lot of people may decide it doesn’t make sense to pay the same amount of money or more for fewer channels and take a pass on pick and pay, he said.
Maher Yaghi, an analyst with Desjardins Securities, said the fact the decision doesn’t fully come into eff ect for a year and a half will likely mean a larger share of cable customers will keep their existing packages out of inertia or lack of knowledge about the option. He said the long time frame was important to allow the cable companies time to fi gure out what to do about their existing commercial contracts, but a lot will change by the time pick and pay comes into full force.
“By then, you’re going to have so many other options as a consumer — Sony, AppleTV, Netfl ix, Hulu, Amazon,” he said. “Probably the December 2016 time frame is too long for them to wait for.”
This is both good and bad news for the major cable companies.
The decision may have a limited impact on stemming subscriber decline, but the CRTC could have implemented measures that would have hit profi tability a lot harder, such as requiring them to include U. S. channels in a low- cost skinny basic channels, Yaghi said.
In a statement, Shaw Communications chief executive Brad Shaw was mostly upbeat about the announcement.
“While this new regulatory environment will not be without challenges, the Commission has provided real opportunities for Shaw to continue delivering the best content experiences possible,” Shaw said in the statement.
Rogers Communications Inc. spokeswoman Patricia Trott said the decision would not be a major departure from the company’s existing strategy.
“We know consumers want more fl exibility and we started down this path several years ago,” she said in an emailed statement.
Bell Media declined a request for comment.
Public Interest Advocacy Centre ( PIAC) legal counsel Alysia Lau said even if consumers don’t choose pick- and- pay she was glad the regulator was at least off ering them the option. Consumers have been frustrated by the available cable packages for a long time, she said.
“PIAC, obviously, would like to see these kinds of choices as soon as possible so consumers can access them,” she said.
“We’re just happy to see new steps that will allow Canadians to choose how they want to access their TV service and how much they want to spend on it.”