A new era of choice for TV customers officially begins today, but instead of empowering consumers, some may feel tricked — even cheated.
The new $25 "skinny" basic TV package may look like a deal. But, in many cases, when customers add on extras and pick-and-pay channels, the price can soar to even more than what they're paying now.
"If Canadian consumers thought this was the way for them to save money, they were mistaken," says Mario Mota with the Ottawa-based media research firm Boon Dog Professional Services.
"Unfortunately, a lot of consumers are going to wake up to the reality on March 1 that there isn't a heck of a lot in this for them," he added.
Costs add up
The Canadian Radio-television and Telecommunications Commission has mandated that by March 1, service providers must offer a pared down TV package for $25 or less plus added pick-and-pay channel options.
"These changes will ensure Canadians have the ability to choose the television content that meets their unique needs, budgets and realities," the CRTC told CBC News in a statement.
But for Rogers cable customer Andrew Hiscock, that's not proving to be the case.
He says after crunching the numbers with a customer service rep, he discovered Rogers' $24.99 basic "Starter" pack and a handful of extra channels would cost him more than his current deal with the company.
"I am disappointed, because I was hoping this would be an opportunity for me to cut down on my bills," says Hiscock, who lives in Mount Pearl, N.L.
He currently has a Rogers bundle deal, paying $160 a month for phone, internet, and a big TV package of channels — most of which he never watches.
So he looked at getting the basic "Starter" pack which contains mandatory Canadian channels plus a few U.S. networks. To top it up, he wanted to add some favourites like HGTV, CNN, sports, and Treehouse for his children.
But once he added up the costs, he discovered his bill would soar by more than $40 a month.
"It was very unappealing when the total was racked up," he says.
Part of the problem is that Rogers doesn't offer the "Starter" pack in a bundle deal, where customers receive a discount if they get multiple services with the company.
Rogers employees have told CBC News that there are no deals or discounts connected with the new basic package.
Plus, at this point, Rogers is only offering channels in small bundles, which means that Hiscock has to shell out for multiple bundles just to get the channels he wants.
"There was a lot of hope when the CRTC announced they were going to mandate the skinny packages," says Hiscock. "But it's not turning out to be the deal that everyone is hoping it's going to be."
Bell features add up
Bell Canada is already offering individual pick-and-pay channels along with its $24.95 basic "Starter" pack. They are priced at either $4 or $7 each, or 10 for $37.
But that may still not translate into big savings for some customers. According to an online Bell customer service rep, subscribers choosing the Fibe TV basic "Starter" package will also have to get Bell internet service, plus pay a $15 a month PVR rental.
Fibe is Bell's high-speed fibre optic network. The company also offers separate plans for satellite TV.
According to an internal Bell document obtained by CBC News, Bell will not be offering any deals or discounts with its basic package. The company would not comment on the document.
The Bell customer service rep says that a Fibe "Starter" pack plus unlimited internet and PVR would total $119.90 a month. Pick-and-pay channels would cost more on top of that.
It's a far cry from the original $24.95 price tag for basic TV.
CRTC says it's watching
CBC News asked the CRTC for its take on the potential high costs of the cheap basic TV package.
"Cable and satellite companies should not view this change as an opportunity to replace business practices designed to maximize profits," says CRTC spokeswoman Patricia Valladao.
She added that the CRTC will be keeping an eye on TV providers and "we will not hesitate to act if we see some companies disregarding the wishes of Canadians."
But analyst Mota says it's understandable that providers would jack up the price of the $25 basic package with add-ons.
"That's just a competitive market," he says.
The problem with the new CRTC regulation is that it has set customers up with great expectations — that they will save money and get more choice, Mota says.
But he added that that's not how it works in the marketplace where buying in bulk offers more value.
"I'm not trying to suggest it's a nefarious way of doing business. The fact of the matter is, choice costs money, so if you want to be able to choose individual channels, it will cost you," he says.
Mota predicts the new CRTC regulations will lead to many frustrated and angry customers once they add up the hidden costs of pick-and-pay TV.
"Is it something that 99 per cent of TV subscribers are going to find beneficial or take advantage of?" he asks. "No."
Consumers can make own deals
Instead, customers need to empower themselves by calling their cable companies and trying to negotiate better deals, Mota says.
Cable customer Hiscock has done just that. He got no enticing deal out of Rogers' new CRTC mandated offerings. But he did manage to get the cable company to waive the $9 a month increase he was facing for his trio of services.
But he still finds himself a dissatisfied cable customer, and so may many customers even now that new CRTC rules have come into play.
"The fact that I'm still paying the same amount is good, but I was looking forward to some cost savings," Hiscock says.
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