More than 40% of Telus TV subs don’t get sports channels: Gossling

Less than 60 per cent of Telus Corp.’s Optik TV customers subscribe to a sports specialty channel, the company’s chief financial officer said. “If I ask people in the hall, ‘What do you think sports’ take-rate is?’ they’d probably say 90 per cent,” John Gossling, Telus’ chief financial officer, said Friday at a CIBC investor conference in Whistler, B.C. “Well it’s actually lower than 60 ,” he said. Canada’s largest broadcasters BCE Inc. and Rogers Communications Inc. have invested heavily in sports content in recent years, in part to increase the value of their sports channels, which are among some of the most profitable specialty services in the country. The hope is that consumers will continue to subscribe to paid television services in order to view live sports events in an era in which other programming content is increasingly available through video-on-demand or over-the-top services shortly after it airs. According to CRTC data, BCE’s TSN sports specialty channel had 9.19 million subscribers in 2012, or about 76.8 per cent of the 11.97 million Canadian TV subscribers. The channel had $36.99 million in pre-tax profits that year and $374.83 million in revenues, including $185.77 million in subscriber revenues. Rogers’ Sportsnet station had 8.78 million subscribers in 2012, the most recent year for which data is available, and recorded $21.55 million in pre-tax profits and $233.97 million in revenues, including $114.97 million in subscriber-related revenues. Industry insiders say that both channels benefit from being placed on many broadcast distributors’ basic TV packages, which could change under a future pick-and-pay regime in which consumers have more flexibility to subscribe to the individual channels they want instead of larger bundles of packages. The federal government said in its October throne speech that it wants to see Canadian TV consumers have more flexibility to subscribe to channels on a pick-and-pay basis, and the CRTC has highlighted the need for increased packaging flexibility as part of its ongoing consultation on the future of the Canadian broadcasting system. Telus, which said in November that it had 777,000 TV subscribers as of Sept. 30, does not currently include any specialty sports channels in its basic TV package. Gossling said Friday that he expects the per-subscriber price broadcast distributors pay Rogers to carry its Sportsnet channel will increase after Rogers signed in November a $5.2-billion deal to gain the exclusive rights to nationally televised NHL hockey games for the next 12 years. He said he expects the rising costs of sports rights “will flow through” to broadcast distributors, and “will put pressure on customer rates.” BMO analyst Tim Casey said in April that he expects the per-subscriber wholesale rates broadcaster distributors pay to carry TSN and Sportsnet will climb “toward the $3.00 per month range” over the next few years, rising from $1.35 for TSN and $1.28 for Sportsnet. In an email statement Friday, Rogers spokeswoman Patricia Trott said she believes TV subscribers would continue to subscribe to sports specialty channels in a pick-and-pay environment. “We invest in sports so customers can enjoy premium content across all our lines of business: cable, wireless and media. Fans want to watch sports live. It’s one of the very few genres that is still appointment viewing,” Trott said. “As the industry moves towards a pick n pay model, the value of sports content becomes increasingly important; customers will pick and choose what they want and we know they’re passionate about sports.” — With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

More than 40% of Telus TV subs don’t get sports channels: Gossling

Broadcast | January 24, 2014

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More than 40% of Telus TV subs don’t get sports channels: Gossling

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