How to woo the free-TV crowd
The over-the-air, free-TV crowd are a tough bunch.
At more than one million strong, they’re a pretty big audience who like their viewing freedom. They’re more than content without cable, or a satellite dish, vocal about their preferences and jealously guard their turf as the CRTC, the broadcast regulator, discovered during hearings last fall. They’re the goodenough-TV crowd, happy with the handful of channels they get from hoisting an antenna onto the roof and maybe bundled with an Internet streaming service.
Will they ever come back? No way, they say.
Well, that will be put to the test soon when Bell Media, Rogers and Shaw begin offering them an interesting proposition.
Instead of paying Netflix $8.95 a month and combining that with an antenna, why not pay the same for Bell’s CraveTV or Roger’s Shomi homegrown services?
Crave was launched in December and is currently only available to Bell and Telus customers, plus select cable company customers outside of Ontario for $4 a month.
Crave includes HBO’s entire off-air library, hundreds of hours of Showtime, a comedy lineup and first-run Canadian shows. At launch Shomi offered more than 1,200 hours of films and 11,000 of television.
As of Jan. 1, 2016, Bell will make CraveTV available to anyone who wants it. The price has yet to be determined, but the betting is it will be near to, but less than Netflix.
Shomi is only available to Rogers and Shaw customers, but soon to any Canadians who want access. Shomi says that will happen by late September, matching the Netflix $8.99 price.
The decisions are smart because these customers are either long gone in the case of older light-TV users, or never going to sign up, in the case of 20- and 30-somethings.
Anything that brings them into the house is a bonus even at a reduced rate. It follows similar moves south of the border, where broadcasters are looking at ways to leverage the Internet access they provide — with new services people want.
At a meeting of U.S. television executives hosted by Fortune magazine last month, the message was that the industry is developing new strategies to “surgically go after those that don’t already subscribe,” as one Comcast executive put it.
Comcast is America’s biggest cable company and chief business development officer Sam Schwartz told the meeting it is launching a streaming service slowly and cautiously. The pitch would be a $60 U.S., all-in, which includes a few networks, a movie channel and streaming rather than the traditional $40 Internetonly subscription.
Peter Miller, a Toronto communications lawyer and former executive with the Canadian Association of Broadcasters, says the irony is that as broadcasters are being forced to unbundle, they’re trying to rebundle in a new way. (The CRTC has approved a $25-a-month, skinnybasic, pick-and-pay package starting in March 2016.)
Miller says these new bundles are ways for the broadcasters to get at the 20 per cent of Canadians who don’t want a traditional service, but do want the Internet. The other 80 per cent are either heavy TV watchers or want the sports programming unavailable through streaming. They’re unlikely to cut the cord.
“With this, they don’t cannibalize their existing customer base. It’s a different demographic,” Miller says.
The broadcasters may get a lot less money from a traditional package, but they gain customers. And the profit margin supplying Internet connections is a lot higher than traditional programming, Miller says.
The question is, would you go for it? Adam Mayers writes about investing and personal finance on Tuesdays and Thursdays. Have a question? Reach him at