Just in time for the Toronto Blue Jays’ season opener, Rogers Media is making a new pitch to Canada’s growing number of cord-cutters and “cord-nevers.”
The company announced Thursday it is expanding its Sportsnet Now service, creating a live-streaming product that will be available to all Canadians, even if they don’t subscribe to its linear TV service.
Rogers is charging $24.99 a month for Sportsnet Now, which grants access to all of the content on its six Sportsnet channels (with some regional restrictions). The service remains free for current Sportsnet subscribers.
Rogers Media president Rick Brace said Sportsnet was the first mainstream sports service in North America to be made available on a direct-to-consumer basis, which comes with both advantages and pitfalls.
“The distinct advantage is that we’re targeting a niche group that either doesn’t have a cable subscription, or the cord-cutters and cord-shavers who are leaving the cable environment,” said Brace. “We’re really focusing on new customers.”
A potential negative implication, he said, is that the service could hasten the amount of cord-cutting/shaving, which could also adversely impact Sportsnet’s own subscriber revenues. Rogers worked with BDUs – including sister division Rogers Cable – to determine a suitable price that ensures it appeals primarily to “pure play” sports fans.
Kaan Yigit, founder and president of Toronto research company Solutions Research Group, said it was important for Rogers to be clear about the service’s value proposition and the quality and reliability of its streaming capabilities. “The price point is pretty steep, and many sports or pro leagues are partially available on Sportsnet,” he said.
Brace said the launch is the latest step in the company’s ongoing transformation into a digital media company. “Everything we’re focused on is getting to digital in a more meaningful way [and] making sure we’re on all platforms,” he said. “This is just another move along the road.”
Scott Moore, president of Sportsnet and NHL properties with Rogers, said the product launch was timed to coincide with the arrival of what is expected to be a “really exciting season” for the Blue Jays. “This will give all sports fans a chance to watch Sportsnet, wherever they are and whatever their situation with cable or satellite.”
Yigit said the platform could also help further monetize Rogers’ 12-year, $5.2 billion NHL rights deal, particularly with the playoffs just days away. “[Those rights] are already paid for, and whatever incremental audience they can build [via Sportsnet Now], it’s a good thing for Rogers,” he said.
According to Yigit, about 2.5 million of Canada’s 14 million households don’t currently have paid TV. “If they can capture a fraction of that, it’s a worthwhile initiative,” he said.
Moore said much of the learning for the Sportsnet Now product came from its live-streaming NHL product GameCentre Live, which he said has been “very successful” since its debut two years ago.
“[GameCentre] has beaten our revenue expectations for two years, and substantially I might say,” said Moore. “One of the reasons it’s growing is that we’ve gotten much better at targeting individuals who are looking for different ways to subscribe to their entertainment products.”
While the subscription price for Sportsnet Now is significantly higher than that of a Netflix or Shomi, Moore said it reflected the product’s niche nature.
“If you’re a sports and movie fan, you might decide you want a skinny basic [cable] package, a Shomi subscription and a Sportsnet Now subscription. Most consumers will do the math and figure out if that’s a better deal than a full cable subscription.”
Moore said Rogers had modest expectations for consumer uptake of the service in the early going. “We expect subscribers to be in the thousands to tens of thousands,” he said. “We’re not looking for millions.”
Sportsnet Now arrives at a time when a growing number of Canadians are ditching their traditional cable and satellite subscriptions in favour of over-the-top services. According to a November report from Boon Dog Professional Services, Canada’s major TV providers lost a record 153,000 subscribers in the first nine months of 2015, up from 22,000 in the corresponding year-earlier period.
Moore said Rogers’ Sportsnet One and Sportsnet 360 services have experienced modest growth in recent months, while its main Sportsnet service has seen moderate declines. However, he said those declines were nothing of the magnitude of its U.S. counterpart ESPN, which has lost a reported 7 million subscribers in the last two years.
Moore said Sportsnet Now subscribers would see the same commercials featured on its linear TV service. Asked if consumers might balk at seeing ads in a premium-priced service, he said preliminary research suggested people expected to see ads.
He said Rogers received complaints from GameCentre Live subscribers when the service went dark during commercial breaks. “Viewers want a continuous viewing experience, and we want our advertisers to be able to reach all manner of viewers, whether they’re watching on a 65-inch TV or a phone,” he said.
