Bell Canada wants to fight U.S. OTT invasion with 'made in Canada' service

Bell Canada (NYSE: BCE) has had enough of over-the-top (OTT) video competitors like Netflix (Nasdaq: NFLX) invading the Great White North and taking away customers. The telco's answer is a "made in Canada" service available "on demand on any device" that would showcase Canadian and international movies and leverage the assets of Astral Media, which Bell Canada hopes to buy.

The service would be available "to all Canadians through the cable, satellite or IPTV provider of their choice," Bell Canada CEO George Cope told the Canadian Radio-television and Telecommunications Commission (CRTC) during a hearing into the Astral acquisition, according to a story in The Telegram.

Cope did not give details about when the service might launch, how much it would cost or what consumers will get to watch. He instead focused on BCE's desire to pay CAD 3.38 billion (USD 3.41 billion) to acquire Astral and bulk up to compete with intruders like Netflix, to which reportedly more than 10 percent of Canadians subscribe.

"The Canadian system needs companies with the scale to compete against foreign content companies like Netflix, Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG) and Amazon.com (Nasdaq: AMZN)," he said. "With scale, Canadian companies can make the investments in Canadian content and technology required to go head-to-head with these well-financed global competitors."

As a further incentive to let a Canadian company rule the Canadian market, Cope pointed out that Netflix doesn't pay taxes in Canada or contribute to Canadian programming.

The pitch was met with some degree of cynicism by Commissioner Tom Pentefountas, who wondered if Cope was "pulling rabbits" out of a hat with the announcement. Tech analyst Mike Battista told the newspaper that BCE's proposed service would appeal to "cable cutters" but that it wasn't clear what it would bring to Astral's existing pay TV subscribers.

"The direction that TV is going is the Netflix model, the Apple TV model," Battista told the newspaper, noting that BCE must offer something similar or "they're going to fall behind."

The move also apparently didn't cool anti-acquisition Bell competitors like Telus Corp. (Toronto: T.TO), which claims BCE would control too much of the market--37.6 percent of the viewing audience--if the deal is allowed to go through. BCE claims that it will own 33.5 percent of the English language market, just under CRTC's 35 percent threshold.

For more:
- see this Telegram story

Related articles:
Telus protests Bell Canada's Astral Media acquisition
Bell Canada's Astral Media acquisition gets green light from shareholders

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