Specialty TV company Astral Media Inc. has long-term deals in place with most U.S. movie studios, giving it exclusive content to help counter competition from internet movie provider Netflix, chief executive Ian Greenberg said today.
“We have long-term arrangements with the majority of the Hollywood studios,” Greenberg said on a conference call, after Astral reported a 2% increase in its quarterly profit.
Greenberg noted that Astral also has deals with U.S. cable channels HBO and Showtime for exclusive programming to broadcast on its pay TV services such as The Movie Network.
“So the fact that we’ve been able to secure all of this content on an exclusive basis, I think, puts us in a position that we’ll be able for the foreseeable future to offer consumers a very valuable pay TV package,” he said.
Netflix is competing for licensing rights with TV networks and pay TV services for content. It had 23.6 million subscribers in the U.S. and Canada at the end of March, double the amount from the same period two years ago.
Greenberg said whenever Astral buys programming rights it also includes digital rights to show the content online, on demand and soon on Apple’s iPad tablet.
Astral also repeated its message that it wants the country’s federal broadcast regulator to examine the operations of Netflix and similar providers.
“It’s just not a level playing field,” Greenberg said, adding that Astral and other Canadian broadcasters contribute financially to support home-grown content.
“They’re not even paying taxes,” added Astral chairman Andre Bureau. “Obviously the Netflix of this world think that the current exemption is the best thing that has happened.”
Astral is part of a 40-member group from the telecommunications, broadcasting, cable and satellite and production sectors, along with unions, that has asked the Canadian Radio-television and Telecommunications Commission to initiate public consultations on the matter.
“We don’t think it’s fair. It’s not fair competition. We’re just saying whatever you do, let’s have a level playing field,” Greenberg said.
In its financial results, Astral said its third-quarter net income increased as advertising grew in both its television and billboard operations.
The company’s profits rose slightly to $49.3 million from $48.5 million a year ago. Revenue lifted to $268 million from $253.6 million.
Astral operates several media properties, including pay and speciality television, radio, advertising billboards and other out-of-home advertising, and digital media.
The company says its television advertising revenue grew 11% in the quarter.
Its radio revenues increased 1%, while revenues for its out-of-home advertising business grew 22%.
During the quarter, Montreal’s transit system awarded Astral a 10-year contract the company was awarded a 10 year contract to manage advertisements aboard trains, in train stations, at park-and-ride facilities as well as metropolitan terminals.
The results included $5 million in restructuring charges in the radio segment that the company recorded in the third quarter, but Astral said its plan to cut costs will lead to a savings of $8.5 million per year.
“I am also proud that recent efforts to optimize our radio cost structure are already yielding obvious benefits, enabling us to offset the copyright tariff increases enacted in fiscal 2010,” Greenberg said.
With its 21 television services, Astral is Canada’s largest pay and specialty TV broadcaster. It is also the largest radio company with 83 radio stations in 50 Canadian markets, and the third-largest outdoor advertising company.
It has almost $1.9 million subscribers to its pay TV services, such as The Movie Network and French-language Super Ecran.
