Blogs & Comment

Don't hold your breath for Bellflix, er... Bell's Netflix

Just because you’ve got the content, doesn’t mean you know how to run an online streaming business.

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This week kicked off the regulatory hearings into Bell Canada’s proposed $3.4-billion takeover of Astral Media, owner of a host of radio and television stations. Bell certainly didn’t hold back on the surprises, with chief executive George Cope announcing that the company intends to launch a video streaming service that will compete with Netflix.

In doing so, he waved the Canadian flag, criticizing Netflix for not paying Canadian taxes or paying into supporting the creation of Canadian content:

(It’s) a made-in-Canada service—available in English and French everywhere we have rights—to all Canadians through the cable, satellite or IPTV provider of their choice. Combining the unique pay TV strengths of Astral with Bell Media’s broad range of programming will create a Canadian service that truly stands apart from those of international providers… The Canadian system needs companies with the scale to compete against foreign content companies like Netflix, Apple, Google and Amazon.

Cope didn’t provide any details, such as what Bell’s offering will cost or when it will launch, although he did make it sound like the streaming service—I’m dubbing it Bellflix—is contingent on the CRTC approving the takeover. The company will, after all, need access to Astral’s content library to make it happen.

CRTC broadcasting vice-chairman Tom Pentefountas was right to be skeptical when he asked Cope if he was “pulling rabbits out of his hat” by making product announcements at a regulatory hearing. Bell’s CEO responded that he was forced into the announcement by critics of the proposed deal—he wants people to know about the positives that will result from it.

Optics aside, there’s no assurance anyone would want Bellflix even if it does happen. The main reason for that is something called core competency—just because you’ve got the content, that doesn’t mean you know how to run an online streaming business. Bell attempted to go toe-to-toe with iTunes a few years ago by launching a video download store. It quietly folded the effort only a year later after finding that consumers were simply more willing to use Apple’s vastly superior product.

The bigger obstacle to Bellflix is an amazing conceit that seems lost on Cope. Netflix’s tremendous success in Canada—snatching up about 10 per cent of broadband subscribers in less than two years, compared to six years in the U.S.—may just be because Canadians are looking to get away from traditional video providers such as Bell.

Would these same sorts of subscribers ditch Netflix and go back to Bell? The phone company might be able to offer better content, but given its track record in telecommunications, it’s unlikely to be at a better value. While it’s obviously way too early to declare Bellflix dead on arrival, it’s not exactly a service that anyone can’t wait to use.

By the way, if Canadian content is what you’re after, the non-profit First Weekend Club is planning on soon launching an on-demand streaming platform starring the best in Canadian cinema. No multibillion-dollar-takeover needed.