Astral plans mobile streaming service
Customers will be able to view programs on their tablets, smartphones
TORONTO — With a merger with BCE Inc. stuck in limbo, Astral Media Inc. is forging ahead on its own, saying Thursday it plans to introduce a new online and mobile streaming service in the “coming weeks” that will serve as a linchpin to the payTV operator’s strategy.
Montreal-based Astral has worked for more than a year to introduce the service, which lets subscribers view programming from HBO Canada and other Astral properties on tablets and smartphones.
Plans may have been disrupted or pushed back by a drawn out $3-billion takeover bid by telecom and media giant BCE Inc. But with an uncertain fate hanging over the deal — regulators are weighing a second offer now after rejecting an initial proposal in October — Astral is poised to launch the streaming service shortly.
“The official announcement of the launch of the Go service is expected in the coming weeks,” Ian Green- berg, Astral’s chief executive, said on a quarterly earnings call.
Analysts say launching such a product, which is modelled on Time Warner’s popular HBO Go platform in the United States, will serve as a deterrent to subscribers who may otherwise elect to drop pricey pay-television subscriptions in favour of cheaper online alternatives, like Netflix Inc.
The service, which has been deployed by Corus Entertainment Inc. which co-owns HBO Canada with Astral among other assets, comes at no additional charge to subscribers while providing far more viewing convenience.
Corus has l aunched the product with western Canadian cable giant Shaw Communications Inc., whose controlling shareholders and founders, the Shaw family, also control the Toronto media company. Though Shaw saw a dip in overall subscribers in the first quarter, senior management said this week the platform was helping to retain higher-value cable customers.
“They (Shaw) expressed some positive sentiments with respect to churn reduction,” Adam Shine, a media and telecom analyst at National Bank, said.
Astral has faced the more difficult and time-consuming task of having to iron out launch plans with multiple TV distributors, including Bell, Cogeco Cable Inc., Rogers Communications Inc. among others.
“We have a different challenge here. We have to make it available for all our (broadcast distribution partners),” Greenberg said. “The work we do for Bell is not the same as the work we’re going to do for Cogeco or Eastlink, as an example.”
Fuelled by promotional activity in the period, Astral added 11,000 television subscribers in the first quarter ended Nov. 30, as the Montreal firm posted a seven per cent rise in net earnings to $59.6 million. Earnings per share were $1.05, beating analyst estimates by a penny.
In regulatory hearings held by the Canadian Radio-tele- vision and Telecommunications Commission last fall, BCE’s chief executive said a successful acquisition would allow his firm to launch a similar service to compete directly with Netflix and future online competitors — and warned that without such scale, the Canadian sector risked being overrun.
“Combining the unique pay TV strengths of Astral with Bell Media’s broad range of programming will create a Canadian service that truly stands apart from those of international providers,” BCE chief George Cope said. “The Canadian system needs companies with the scale to compete against foreign content companies like Netflix, Apple, Google and Amazon.”
The CRTC rejected the argument, instead, ruling that BCE’s initial bid for the whole of Astral, which owns 24 special and pay channels, concentrated too much domestic market power in Bell’s hands.
BCE and Astral submitted a second bid on Nov. 19, which analysts say likely contemplates certain divestitures. Greenberg said Thursday the broadcast regulators would release details of the bid to the public within weeks, while another round of hearings is likely slated for the spring.