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$25 basic TV can’t stop customers from cutting their cable in record numbers

The lure of a $25 basic TV package has not helped stem the tide of Canadians cancelling their cable subscriptions. And critics believe the added pick-and-pay channel options coming next month may not help much either.

Canadians continued to cut the cord in record numbers following the launch of the CRTC-mandated basic TV plans on March 1.

This is according to Mario Mota, with Boon Dog Professional Services, an Ottawa-based research and consulting firm. Mota crunched subscriber numbers for Canada’s seven major publicly traded TV providers, including Bell, Rogers, Telus and Shaw.

He found they lost a combined total of 98,476 TV customers in their first two fiscal quarters during the period of March through September.

That’s a loss of 13 per cent more customers than the same period in 2015.

“I’m quite happy with Netflix,” said Krystyna Szafran, from Bath, Ont. She downgraded to Shaw’s basic package in March and soon after cut the cord. She decided she wasn’t happy with any TV plan on offer.

“I just don’t want to pay the cable bill anymore.”

Cord-cutting numbers remain relatively modest considering more than 11 million Canadians still subscribe to traditional TV. But Mota says the gap is shrinking.

He predicts Canada is on pace to lose almost 200,000 TV subscribers this year — an all-time high.

“They really have to find a magic formula to keep [cable] customers happy,” he said.

TV television remote clicker converter channel changer

According to the CRTC, 1.57 per cent of Canada’s TV subscribers had signed up for basic TV by June. But that’s much less than the five per cent expected. (Chris Ratcliffe/Bloomberg)

The $25 basic packages were supposed to be part of that magic formula — a way to provide discontented TV subscribers with more choice at an affordable price.  

The Canadian Radio-television and Telecommunications Commission (CRTC) had mandated that by March 1, cable companies must offer a “skinny” basic TV package for $25 or less.

According to the CRTC, 1.57 per cent of Canada’s TV subscribers had signed up for basic TV by June, well below the anticipated uptake of at least five per cent.

Many customers found that when they added fees for things like equipment rentals or extra channels, the package just wasn’t worth it.

“There was a whole bunch things that made that option very, very unattractive to a lot of consumers,” said Mota.

A second chance for basic TV?

Some potential customers may be holding out for phase two.

The CRTC has also mandated that by Dec. 1, TV providers must allow customers to top up their basic package with any specialty channel they want, either individually or grouped in theme packs — for a price.

But Mota believes part two won’t help quell the rise in cord-cutting either, unless TV providers start offering customers better basic deals.

“If they can’t save money by choosing those options, then they’re going to stick with what they have today or look at alternatives and cancel it all together,” he said.

Many TV providers, including Bell, Shaw and Telus, are already offering a large selection of pick-and-pay channels.

For example, Bell customers can top up their basic plan with extra channels largely priced at $4 or $7 each. That can add up pretty fast.

Rogers currently only provides extra channels grouped in theme packs. Along with all other providers, it will offer the full complement of standalone specialty channels come December. 

Rogers said that “in the coming months,” customers also will be able to get its basic plan in a bundle discount.

The move follows criticisms that many providers made basic TV less attractive by not including it with any routine customer discounts.

Not good enough?

It probably won’t be enough to sway current Rogers customer Andrew Hiscock. Earlier this year, he told CBC News he was hoping to switch to the basic package to cut down his TV bill.

But Hiscock backed out after discovering that if he topped up the deal with a few theme packs to get all the channels he wanted, his bill would soar by $40 a month.

Andrew Hiscock Skinny basic TV

Hiscock says even when pick-and-pay channels arrive, he will likely won’t sign up for basic TV. (CBC)

Hiscock, from Mount Pearl, N.L., thought his luck might change when Rogers starts offering standalone channels. But now he’s convinced he probably can’t do better than his current TV plan for $80 a month.

“I’m not holding out hope. It would be something I would look into, but I’m not expecting miracles.”

Neither is Szafran. She got rid of her Shaw basic plan soon after learning she couldn’t get a customer discount. “To me, the basic package wasn’t worth it.” 

CRTC basic tv

The CRTC wants Canadians to know that they ‘have choices’ and should ‘demand better’ when shopping for a TV provider. (CRTC)

She hasn’t technically cancelled her TV subscription but instead put it on hold.

However, Szafran says to reactivate her service, Shaw would have to offer her a better deal.

And if that doesn’t happen?

“They’ve lost me,” she said. “I don’t need it.”

The CRTC told CBC News it encourages customers to shop around if they’re dissatisfied with their current TV provider.

The commission recently posted comparison-shopping tips for Canadians, along with the slogan “You have choices. Demand better.”

Article source: http://www.cbc.ca/news/business/basic-tv-cord-cutting-cable-1.3847342?cmp=rss