What If…Skinny TV Bundles Are Mandated?
(note: a la carte programming was also addressed in our June 16, 2015 post)
Surprise, surprise, they now are…at least in Canada. On March 1, 2016 a new rule from the Canadian Radio-Television and Telecommunications Commission went into effect. The CRTC mandated that TV service providers offer a basic tier of channels for $25/month or less (cable box extra). “Skinny bundles” like these have been used in the US for the last year with limited success as a last line of defense against cord cutters. However, this also created an opportunity (or forced the issue depending on your POV) for channels to create their own direct-to-consumer offerings (like HBO Now, CBS All Access and recently announced offerings from Fullscreen, Newsy, Kevin Hart (Laugh Out Loud), etc).
In addition to skinny bundles, the CRTC also required cable and satellite companies to offer consumers an option to add individual and/or small groups of favorite channels aka “pick-and-pay” so consumers would essentially be buying only the ones they want. Welcome to a la carte television.
So how’s it going so far? CBC News reported that Bell Canada sales staff was directed not to promote their “Starter TV” package. The Bell training document states: “Do not promote the Starter TV package. There will be no advertising, and this package should only be discussed if the customer initiates the conversation.”
Consumers are also unhappy. One CBC reader commented, “Looked into all of them yesterday. It is still a ripoff.” And a Rogers Communications customer, after crunching the numbers with a customer service rep, said he discovered their $24.99 basic “Starter” pack and a handful of extra channels would cost him much more than his current deal with the company.
It’s also interesting to note that on April 1st, Rogers began offering its popular Sportsnet television station bundle (regional sports networks plus its One and 360 channels) as a stand-alone streaming service (SportsNet Now) for $24.99/mo sans contract. This strategy flies in the face of the traditional connection between live sports and standard cable plans given that consumers are not required to have an existing cable subscription to sign up. Rogers is taking a risk that it might encourage sports fans to cancel cable but one that may be necessary for survival in this cord cutter/shaver/never environment.
# # #
Update 8/4/16: Dish Network has announced their skinny bundle called “The Flex.” For $29.99/month, consumers get 50 channels including AMC, TNT, USA, HGTV, E!, Cartoon Network, History, A&E, CNN, Discovery, TBS, Food Network, FX and TV Land. For an additional $10/mo they can get one of eight channel packs built around themes including local broadcasters, kids’ channels, news, and different entertainment genres. There are also add-on services for $4-$10/mo like sports and news bundles as well as premiums including HBO, Cinemax, Showtime and Starz.