Corus deal paves the way for an ultra-premium service, but consumer demand for it is unknown.
Bell’s HBO Now:
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To the innocent onlooker, Bell’s announcement last week that it was buying out Corus Entertainment’s stake in HBO Canada might seem like a dull, complicated exchange of licensing rights, but the deal has a high likelihood of changing the streaming landscape in Canada.
HBO Canada has, until now, been a strange beast. Prior to the deal, it was co-owned by Bell and Corus, with the two companies carving up Canadian distribution. New York-based HBO had no ownership stake in the Canadian satellite network at all, and it still doesn’t.
Bell handled Eastern Canada and provided HBO programming for TV subscribers via TMN. Corus took the west and north, where HBO was offered through Movie Central.
Online streaming of HBO content, meanwhile, was complicated and tied to TV subscriptions. Which app you used depended on where you were in the country and who your television provider was.
The age of the content was also a factor. Newer HBO shows such as Game of Thrones or Boardwalk Empire could be viewed through TV-tied apps such as TMN Go, but series that have run their course such as The Sopranos or The Wire could only be had through CraveTV, a separate streaming service from Bell, which also holds the rights for HBO’s older library.
The good news is that with Bell now being the sole rights possessor to all of HBO’s content, new and old, the company can unify those fragments into one cohesive offer. At the very least, Bell is planning to expand TMN to TV subscribers nation-wide.
Bell is also now capable of offering a Canadian version of HBO Now, the standalone streaming service launched in the United States by HBO itself. The $14.99 (U.S.)-a-month service, which doesn’t require a TV subscription, is proving to be very popular. Some analysts estimate between one and two million subscribers have signed up since the April launch.
The question is: Will Bell do it? And if it does, what will it cost subscribers?
Company executives themselves admit the market has changed quickly. CraveTV, when it launched last year at $4 a month, was intended solely as an add-on for TV subscribers. But Bell was forced to change tack after rivals Rogers and Shaw unbundled their streaming service Shomi from TV and internet subscriptions this past summer.
Bell is doing the same with CraveTV in January, but the company hasn’t yet announced what its standalone price will be. That may be because the HBO-Corus deal was in the works and Bell was considering adding the full, new HBO content – Game of Thrones et al – to CraveTV when it opens to the general public.
“We’re reviewing the HBO overall strategy with an understanding of where the market is going,” Mike Cosentino, senior vice-president of programming for CTV Networks and CraveTV, said in an interview a few weeks ago.
A full HBO offering would certainly make CraveTV more enticing to consumers, but it would also move the price for such a service upward considerably. Add in the fact that CraveTV also has a wealth of Showtime content – including shows such as Homeland and Masters of Sex – and it starts to look like an ultra-premium offering.
That could get tricky. Polling data from trend tracking firm Solutions Research Group shows Canadians are willing to subscribe to multiple streaming services on top of Netflix, but there’s less information on the maximum they’re willing to pay for all of them.
Based on HBO Now’s price in the U.S., Bell could make a case for charging around $20 for a CraveTV service that offers both Showtime content and full HBO. Another option is the company could offer tiers where, say, $10 gets you basic CraveTV with older content, while another $10 gets you the new stuff.
There’s no evidence yet from anywhere in the world that suggests people are willing to pay that much, and it does start to resemble cable – the anti-thesis of the Netflix age – but that’s not to say it can’t be tried.