Videotron launches original content for Club Illico streaming service

MONTREAL — Quebecor Inc.’s Videotron hopes that producing original content exclusively for its Club Illico streaming service will help the company attract and keep subscribers, said Videotron CEO Manon Brouillette. At a Monday press conference in Montreal, the company announced it would launch Blue Moon, the first original series for Club Illico. The scripted series, about a woman taking over her father’s private security firm, will premiere in 2016 and, a press release emphasized, was designed to be binge-watched. Brouillette said in an interview that while Videotron’s traditional business is TV distribution, Club Illico, as a subscription video-on-demand service, allows the company to “acquire new types of customers; customers who are not well served by the traditional model.” Brouillette said that the company must make sure to target loyal TV subscribers who wouldn’t consider getting rid of traditional service, as well as cord-cutters, cord-shavers and cord-nevers. “We have to be there for everybody,” she said, adding that while the company feels it’s strong among those loyal to traditional TV and cord-shavers, it needed a service like Club Illico to appeal to those customers who have never had TV service. Videotron has to be able to play in all the different domains, she said, “to make sure that we are able to leverage those types of subscribers and be there for them.” The company is hoping that original content will help drive revenue by bringing in more subscribers, she said. “Also, it works on the churn, because the consumer wants new stuff every week. In the new era, people get bored easily, so we need to be really active in the content platform, to make sure that we keep our subscribers,” she said. “So definitely, it will bring new subscribers on board, and it will help retain the subscribers we’ve gained so far.” She said the “major portion” of the funding for Blue Moon comes from Videotron, but would not specify the amount. She noted that Club Illico has been around for two years and now has almost 200,000 subscribers, “and leveraging that enables us today to finance” productions. “We now have the customer base, we have the revenue stream that enables us to put back money in the system,” Brouillette added. While Club Illico has been offering streaming content to a French-speaking audience for two years, it’s only in recent months that similar services have been launched by TV providers outside of Quebec, with Rogers Communications Inc. and Shaw Communications Inc. releasing Shomi, and BCE Inc. following with CraveTV. She said that while “everything is competition,” those services aren’t a big threat in the short term, because of the company’s niche in French content and local productions. “But you have to look at everything that’s on the market, and make sure that you will be there for your subscriber, and you’ll have a differentiator to make sure that people choose your product rather than the competitors’.” While Shomi is only available to Rogers and Shaw’s Internet or TV customers, and CraveTV to TV customers of Bell, Telus Corp., Northwestel Inc. and Eastlink, Club Illico is available to all residents of Quebec or Ontario, regardless of whether they are a TV subscriber or Videotron customer. Brouillette said the company decided to make the service available to anyone because “it’s a new era, and you have two choices in business. You stick to your model or you embrace the new reality.” Shomi announced last year that it will team up with Netflix Inc. to produce an original show, though that will also be broadcast on Rogers’ conventional network, City. The Wire Report reported in November that the opportunity streaming services offer to creators of Canadian content remains unclear. Netflix, which began producing original content in recent years, said in January that it plans to release triple the amount of original programming in 2015 as it did in 2014, and noted that its original content costs “less money, relative to our viewing metrics, than most of our licensed content.” During the CRTC’s two-week hearing on the future of television in the fall, Quebecor CEO Pierre Dion said Netflix has recently become a bigger threat in the Quebec market. Broadcasting consultant Peter Miller said in a phone interview that successful original content can provide “brand lift and a strong reason for people to subscribe to your services.” He said there is likely to be more original content produced for streaming services in Canada, though he doubts originals “will be a major part of their offering in terms of hours of content.” That’s because a broadcast licence is necessary to access funding for Canadian content from organizations such as the Canada Media Fund, Miller said," and over-the-top (OTT) services don’t count for that." A Videotron spokesman said, in an emailed response to a follow-up question about whether its new series will access tax credits or funding from organizations such as the CMF, that "Blue Moon has access to the same funding source as productions for conventional television." Because of broadcasting licence requirements for funding and tax credits, Miller thinks “we’re still going to be talking about relatively lower-budget series. So you may start seeing a handful in English Canada.” “It’s hard to justify the economic model,” Miller said. “So if you’re unable to access tax credits or the CMF, the financing becomes very difficult.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Videotron launches original content for Club Illico streaming service

Broadcast | February 2, 2015

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Videotron launches original content for Club Illico streaming service

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