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Vidéotron (Canada)

Quebec-based pay TV operator Vidéotron, owned by Quebecor Media Group, launched its French-language focused OTT service illico in February 2013.

Operations and Figures:

Vidéotron ended 2016 with 1.69 million cable TV customers, a loss of 146,000 in a year.

The Club illico OTT service has 314,700 subscribers, up from 257,500 at the end of 2015.

Revenues for Club illico increased 22% to C$8.6 million in 2016.

Total revenues for 2016 for parent company Quebecor Media reached C$4.02 billion, up 3.2% from the previous year.

  

 Technology Suppliers:

Samsung set tops.

Cisco conditional access.

Alcatel-Lucent (Nokia) Motive Customer Experience Management (CEM) system.

S3 Group handles set top and network testing.

Tversity cloud browser.

NetCracker OSS/BSS.

OTT Video Offering:

Vidéotron illico is a free TV Everywhere service for pay TV subscribers. Club illico is the standalone SVoD service, available to existing and non-subscribers, centered around French-language movies and TV, costing C$9.99 a month.

Technology Detail:

Vidéotron’s first 4K UHD DVR came out in August 2015, built by Samsung, running a Broadcom chip, and using Alticast’s GEM (Globally Executable MHP) stack. The device allows for 8 recordings at once, will record 320 hours of HD content or 115 hours of UHD content in 2 TB storage, and claims to be a 12x speed improvement on the previous device.

Vidéotron selected the Motive CEM from Alcatel-Lucent in December 2015, allowing it to remotely diagnose issues with subscribers’ WiFi routers, apply automatic device updates, and activate new services more quickly. In addition, Vidéotron picked the Motive Home Device Management (HDM) to manage the CPE, the Motive Service Management Platform (SMP) and Motive Customer Service Console (CSC) to provide its service agents response workflows and back-end system views.

 S3 Group’s StormTest Development Center system is used for automated set top and network testing – measuring the performance and delivery of video to CPE, to help scale and validate network operations.

 Israeli firm Tversity had a win at Vidéotron a few years back, for its HTML 5 cloud browser which is aimed at companies looking to upgrade legacy set tops.

Trends and Analysis:

The uptake of illico has been relatively slow, from 58,200 after its first year in 2013, to 314,700 at the end of 2016, considering Vidéotron says 2.84 million homes can access the service.

 Competition is tough in Canada, with pure play OTT threats that have resulted in Shomi being shut down at the end of 2016 after just two years, which was a joint SVoD service launched by Canadian operators Rogers Communications and Shaw Communications.

Bell Canada’s CraveTV is the main operator-run SVoD service in the country following Shomi’s closure, both of which were launched with ambitions of stealing some market share away from the dominant Netflix, which now has 5.2 million Canadian subscribers.

However, at the end of last year, Bell Canada admitted defeat by integrating the Netflix app onto its set tops. We have said on a number of occasions that pay TV operators, using early movie exclusives to drive a Netflix style experience, usually end up running a profitable business, but it does nothing to prevent Netflix taking hold, and we think this is such a case. Netflix tends to get movies later in each territory, leaving room for a “premium” early market movie service, with less choice, but more recent titles.

Vidéotron hasn’t yet taken the plunge to integrate Netflix into its pay TV set tops, but we suspect it will eventually follow suit, or perhaps opt for a French language pure play OTT integration, such as Molotov.

Canadian IPTV provider Telus also decided to offer Netflix as well as

CraveTV last year, and the SVoD service is now available directly on the Apple TV and Chromecast.

Canada has strict laws about using exclusive content to tie customers to pay TV operators and the initial positioning of Shomi as a service only for Rogers and Shaw customers, was vacated last year in favor of an open SVoD service.

Rival Canadian cable Cogeco has already abandoned its own shift to IPTV last year, and opted for TiVo instead, due to performance issues.

In April 2017, the Canadian Radio-Television and Telecommunications Commission (CRTC) ruled to block Vidéotron’s Unlimited Music service due to net neutrality infringements. The service allowed mobile subscribers to access select music streaming services without counting towards data allowances.

 

Deals tracked:

  • January 2016 – Acquired Fiber-optic connectivity company Fibrenoire for $125 million.
  • April 2016 – Signed a content distribution deal with NBCUniversal for Club illico.
  • September 2016 – Launched an open-air smart living laboratory in partnership with Ericsson, École de technologie supérieure and the Quartier de l’innovation.

 

Links to related stories:

Vodafone Spain and Videotron in Canada join the 4K brigade

No time to mourn Shomi, Rogers focuses on Eclipse IPTV

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