BUSINESS

Cord-Cutting Ramps Up, While Cable Providers Ready For Pick-And-Pay TV

10/09/2015 08:14 EDT | Updated 10/09/2016 05:12 EDT
David Stevens loves his Rogers cable TV package. "We are able to customize the channels that we watch and only pay for those channels," says the London, Ont., resident.

If you're hoping for the same type of pick-and-pay deal, sorry to disappoint you — it's not available — at least not yet. Stevens was part of a small Rogers pilot project launched in his city four years ago to test pick your own channel packages.

"A package like this, exactly what we have, if it was offered to Canadians, I think that a lot of people would stick with cable or possibly return to it," he says.

Stevens is referring to the growing number of viewers who are fleeing traditional television in favour of cheaper, more tailored video streaming services like Netflix.

Canada's major TV providers combined lost almost six times more customers in the first half of 2015 compared to the same period in 2014. This according to new numbers crunched by research firm, Boon Dog Professional Services.

The Ottawa-based company looked at Canada's eight publicly traded TV providers including Rogers, Bell, and Shaw. It found that, overall, they lost 113,000 subscribers in the first six months of this year.

Boon Dog co-founder Mario Mota notes the losses are still a drop in the bucket at this point. However, unless customers are offered more attractive deals, he predicts cord-cutting will continue to accelerate to the point where "it definitely is going to hit the bottom lines of traditional TV providers."

Pick-and-pay please

Canadians have long been campaigning for deals where they can get more tailored television packages. Back in 2011, the Canadian Radio-television and Telecommunications Commission (CRTC) "strongly" encouraged TV providers "to give Canadians more flexibility in choosing the individual services they want."

But there was no seismic shift. So some viewers expressed their disappointment by cutting the cord and embracing the growing variety of streaming services entering the marketplace. Now, big changes are finally coming thanks to new rules.

The CRTC has mandated that by March 2016, Canada's television providers must offer customers a pared down "skinny basic" core package of channels capped at $25. Customers will also be able to top it up, at an extra cost, with some kind of pick-and-pay deal that will increase in options by the end of that year.

Rogers won't confirm if the deal Stevens scored will be similar to what customers will be offered come March. "We'll be announcing more details in the new year," spokesman Aaron Lazarus told CBC News in a statement.

Sweet selection

Stevens believes if what he has resembles the upcoming packages, customers will be pleased. "I think people will really enjoy this way of watching television," he says.

The Rogers pilot project ended in 2012 but, so far, Stevens has been able to keep his deal. He says he gets to view all the channels he needs for $46 a month. Stevens calculates he saves about $30 monthly compared to his previous Rogers deal where he paid for 300 channels just to get the ones he wanted.

"Wouldn't it be great if there was a TV package made of all your favourite channels?" reads the Rogers brochure Stevens received when he signed up for the test project.

He has a "Digital Starter Pack" consisting, he says of about 30 core Canadian channels for $19.99 a month. On top of that, he was offered different pick your own packages. He settled on a bundle of 15 channels of his choosing from a vast selection for $25.99 a month.

Stevens says he can switch any of his channel picks at any time, a handy feature during major televised events. "We're not large sports fans but we did sub in some of the sports channels for the Olympics and Tour de France," he says.

He adds that when he calls Rogers to trade channels, even the customer service reps he speaks with envy his deal.

"There's always a little bit of a pause," he says. "They start looking at our package and they go, 'This is a great package. I wish I could have this.'"

Will the price be right?

Stevens believes the big sticking point for the new pick-and-pay packages will be price. He pays $1.73 for each of his 15 extra channels. He predicts a higher charge could drive customers away if they don't see any real savings.

Mota with Boon Dog agrees. He says the new rules could help turn the tide for traditional TV providers — if viewers like what they see. "That might be a point where we see cord-cutting level off a bit."

Or, adds Mota, the opposite could happen if the price isn't right. In that case, he says, some viewers may decide,"'You know what, enough's enough,' and they just cut the cord entirely."