The media has been buzzing over the last few weeks with the announcements from HBO and CBS.
In case you missed it HBO announced that starting in 2015 they will offer users the chance to purchase a direct subscription to their digital service called HBO Go. Up until now users have required a valid traditional cable subscription to use the service.
On the heels of HBO’s announcement, CBS announced that they will also launch a streaming service called CBS All Access. The service will cost users $5.99 (US) a month. CBS says that it offer thousands of episodes from many of CBS’ current programs and classic series from its library.
Much of the cord cutter world has been a buzz with this news. There has been a steady request of people asking HBO to move in this direction for several years. Their HBO Go service is considered one of the premium streaming services for a few reasons. First and foremost is the content. HBO has some of the top rated programming with shows like Game of Thrones, Boardwalk Empire, True Detective, Girls, The Newsroom, Veep and Last Week Tonight with John Oliver.
The unique aspect of HBO Go is that shows are live streamed. So when the latest episode of Game of Thrones is broadcast at say 9pm (EST) on a traditional cable TV channel, users who have HBO Go can watch the episode as well with the digital service at 9pm (EST) as well.
It’s unique because with many other streaming service like Hulu, Amazon Prime or Netflix users have to wait until the next day to watch episodes. In some cases they may have to wait until the entire season has been broadcast before episodes are made available to watch.
At the same time HBO Go offers users the ability to watch much of it’s popular content from over the years with full seasons of shows like Sex and the City, The Sopranos, Curb Your Enthusiasm, Entourage, The Wire and Band of Brothers available to enjoy.
HBO’s service has resulted in many people borrowing logins from friends and family to use the service and earlier this year HBO’s president made it clear that he had no issue with this. The service has been so popular that at times it’s crashed. Social media was a blaze with the finale of True Detective this past season and with the Game of Thrones premiere when users were unable to log into HBO Go (source)
HBO will clearly have some work to do to staff up on this side of the business, but it obviously they are well aware that there is an opportunity here to create a whole new line of revenue. They have a vast library of quality content that they own and that users are willing to pay for.
What remains to be announced yet is what the price point will be.
With both announcements it will be interesting to see what this means for Canadians.
I’ve seen a lot of friends in Canada post about both announcements on various social media platforms talking about how change is coming in the TV industry. Unfortunately we’ve seen this before and if history is correct Canada will be shut out of these services once again.
The CRTC has yet to make any announcements after holding their recent two week “Let’s Talk TV” hearings and they aren’t expected to make their recommendation until December this year.
Two things became abundantly clear with the hearings though. First off it’s clear that the CRTC really has no place in this day and age. The Globe and Mail wrote in an editorial "Watching CRTC commissioners questioning cable-company executives and other stakeholders about whether Canadians should be able to choose which channels they pay for made it painfully clear that the commission’s usefulness is being outstripped by technology” - source
There was a ton of coverage of the hearings and while I applaud the CRTC for trying, I don’t have much hope that the hearings will result in any real change for Canadian consumers. According to the 2014 edition of the CRTC’s Communications Monitoring Report released earlier this week reports that in 2013, the average Canadian family spent $191 per month on communications services, a 3.2% increase from $185 per month in 2012. (http://canadajournal.net/technology/canadians-spend-cad-190-per-month-communications-crtc-report-17348-2014)
All through the hearings Bell, Rogers and Shaw pushed back on a consistent basis on the CRTC proposed changes. Two of the big items Canadian consumers clearly stated that they wanted the CRTC to address were the cost and size of the basic cable package along with channel un-bundling. All of the big media companies presented nothing but doom and gloom when it came to these subjects.
Much of the defence on both subjects from the folks at Rogers and Bell included the argument that the majority of their customers through their own research indicated that customers didn’t want change. Of course no proof was provided. There was also constant warnings that from the providers that any change would be disastrous and result in increased prices, loss of jobs and the death of Canadian content.
Of course there is little to no proof of any of these predictions would come true, and it’s very hard to believe that any of these companies have anything but their own vested interests in mind. Instead there was intense push back from all the providers on what has become their major competition, the internet.
It was proposed that the CRTC begin mandating Netflix to comply with Canadian content rules and at the same time Canadians start paying a ‘Netflix Tax’ that would go towards the subsidization of domestic programming.
The notion that in this day and age Canadian content needs protection is laughable and worse that this suggestion is coming from the Canadian media companies who besides CBC are hardly in the business of producing any real Canadian content makes it even more of a joke.
All you need to do is look at the show lineup of any of the Canadian networks. If you look through the gallery below you can clearly see that 95% of the prime time shows that these Canadian networks are promoting are American series.
It was clear throughout the hearings that the big Canadian players are scared of the future. That future is the globalization of media. Netflix is the first entrant of this new world into Canada. A recent study by Sandvine indicates that Netflix accounts for 34.9% of all North American bandwidth traffic. Rogers and Bell are well aware that the tide is shifting. This article recently published indicates that Rogers and Shaw lost close to 200,000 cable subscribers in the last year. In 2013 this CRTC report indicates that that average adult streamed 1.9 hours of TV content which was up 45% from the previous year.
To try and combat this trend Rogers, Shaw and Bell have tried to jump on the Netflix bandwagon launching their own streaming services.
Rogers and Shaw have teamed up to launch Shomi. Two things stand out about this launch. First the fact that Rogers and Shaw have teamed up to launch a service that has required them to spend millions of dollars in purchasing the content rights for various content. Despite this upfront cost and what one would think the final goal would be to capture additional audience who are clearly leaving traditional cable behind for streaming services, the rules of getting Shomi baffle us. This brings us to the second stand out point. The amazing thing about Netflix is that for a simple $8 a month you get access to large volumes of TV and movie content with zero contract.
Rogers and Shaw though for some reason have decided that for a service that brands itself as "a new kind of video streaming service" that at launch only people who are actual Rogers or Shaw internet or TV customers can actually use the service.
It's a curious tactic. Even more curious is the fact that these users get a 30 day free trial but then after the 30 days are expected to pay $8.99 a month. So in essence Rogers and Shaw customers are expected to have traditional cable or internet service with them and then on top of that pay an additional $8.99 a month for a service that is still in beta. Not a great way to reward your existing customer base and one that in most cases is looking for cheaper alternatives. It's also rather bizarre that if you were trying to win market share back from Netflix why you wouldn't allow users who have already left Rogers and Shaw a chance to try the service and compare it in hopes to win customers back. Again, odd since it bills itself as "a new kind of video streaming service"
Bell is poised to launch their service entitled 'Project Latte' although no official date has been given yet. We'll see if they launch with the same tactic.
In the meantime it's worth noting that the Canadian media companies continue to simply try and duplicate innovation that others design and launch all the while they point the finger at these original companies as being a threat to 'Canadian content' rather than their own traditional declining business models.
Are we really going to remain behind the times in terms of choice while we wait for Rogers, Bell and Shaw to catch up?
It's Kutko's belief that Canadians should have full access to everything out there and will continue to do our best to help every one of our customers navigate this new world.