Netflix poses threat to Bell, Rogers, and Shaw
(Caption: Peter Vogel writes about his colleagues who have decided to drop their cable packages in favour of online streaming services. Photo credit: Bryan Gosline / Wikimedia Commons)
Hands up if you've had it with those ever-increasing cable TV bills. Have you reached the point where you plan to become a cord-cutter, someone who no longer subscribes to a TV package?
Since the early '70s, when cable TV first appeared in the Greater Vancouver area, the service has been a figurative licence to print money. I seem to recall my parents paying around $5 a month in those days for admittedly limited cable service.
The service, of course, spread rapidly, and within a decade most of the forest of Channel Master antennas on Vancouver rooftops had gone.
Today a typical TV and Internet package bill can easily top $150. Nothing fancy for that $150 either: fairly pedestrian Internet speed, or bandwidth if you prefer, no pay TV channels, but a full range of HD channels with perhaps a sports channel or two thrown in.
After all, what good is that 72" TV with just basic, mostly non-HD, content?
With those hefty TV and Internet monthly bills, why might a provider such as Shaw Communications be worried about the future? Consider secondary school teacher Jacqueline Spence, who has never signed up for cable and says she likely never will.
"It's an unnecessary cost for me" she said. "I can find shows that I would regularly watch on their network's site. I also subscribe to Netflix. The only thing I sometimes miss is live sports, but I can always go out to watch games."
She went on to note that she watches most Netflix content through a Playstation 3 console connected to her TV, although she prefers the desktop interface. As for savings, TV coverage would add from $35 to $75 per month to her Shaw Internet-only bill. This she notes amounts to from $420 to $900 a year, money the cable company will never see.
Ms. Spence is a prime case study of the unclear future that faces the companies bringing digital content into our homes. She is a never-corder, distinct from a cord-cutter, someone who is fed up with high bills for TV service and drops the service completely.
Never-corders are unlikely to ever sign up with the likes of a Shaw or Telus. They are content to use streaming services, perhaps viewed on a laptop or other portable device, and may not even own a TV.
Colleague Monica Pasta provides a different rationale that has to concern television programmers and the telecom companies. "We used to pay about $160 per month for cable and high speed Internet" she noted.
"About two years ago we decided to drop cable and started subscribing to Netflix. Now we pay about $90 a month for these services. Aside from the significant savings, another bonus is that our young children are not bombarded by numerous television commercials, especially toy commercials!"
Of course the telecoms are not blind to the changing landscape of television viewing. Rogers Communications and Shaw Communications have joined forces to create Showmi, a streaming content service designed to compete with the fast-growing Netflix service.
Bell Media has launched CraveTV, a streaming service focussed on TV content. The service has secured Canadian rights to HBO and Showtime content. CraveTV is available through service providers or through a website and apps.
Clearly carriers such as Shaw and Telus are spooked at the thought of losing customers to other platforms. Shaw finds itself in a bit of a Catch 22 situation, being both a content creator through its ownership of numerous media properties (e.g. Global, HGTV Canada), and being a carrier through its cable business.
Shaw's cable business has had layoffs recently as well as cost increases for Internet services. As customers drop their TV packages Shaw will surely attempt to make up the difference on the Internet side. Telus is already addressing that side of the equation by imposing fees for over-cap data consumption.
So, gentle BCC readers, have high TV costs driven you to change your service subscription? Have you become a cord-cutter? Are you a Netflix subscriber? Do you use a streaming platform such as Chromecast, Apple TV, or Roku? Let's hear from you and we'll post a summary in a future column.