CEO Laurence talks cable, wireless, media, and hockey, at AGM
TORONTO – Rogers Communications will launch its IPTV service at the end of the year, CEO Guy Laurence told shareholders at the company's annual general meeting in Toronto on Tuesday, which "will take your TV viewing to a whole new level."
Meeting later with reporters, he refused to go into more details other than to say "It looks great, I'm excited about it."
But he also said IPTV wraps into the company's recent efforts in upgrading its cable network to offer 1 Gbps Internet speeds to every home and small business in its footprint and vastly increase the amount of 4K broadcast content. “You should think of (IPTV) as a much more intuitive user interface that is very much personalized to your own needs in terms of the content you want to watch and how you watch it," he told reporters.
There will be a revolution in Canadian households, he predicted: "They're going to replace their TV set, they're going go to 4K with HDR (high dynamic range, soon to be added), they're going to need 1 gig speeds because of the number of (Internet connected) devices in their house and they're going to want the kinds of TV offerings that include Shomi to Netflix to YouTube to traditional linear channels and all the rest of it in a user interface that's very attractive."
IPTV – television delivered via internet protocol rather than cable’s radio frequency – is the way Rogers' TV competitor in Ontario, Bell Canada – has been luring away TV customers through its Fibe offering. Kaan Yigit, president of market research firm Solutions Research Group, said in an interview that Bell is gaining customers not necessarily because of the technology itself but by very aggressive pricing on its TV service.
In its latest quarterly report on Monday, Rogers reported losing 26,000 cable subscribers in the three month period ending March 31. In 2015, according to the annual report, Rogers lost 128,000 cable TV subscribers after losing 119,000 the year before (Bell’s Q1 report comes on April 28).
In the report, Rogers blames cord cutting, which is aided by the increased adoption of over the top (OTT) services such as Apple TV, Netflix and Android-based TV boxes.
But while Rogers has high hopes for its IPTV solution (which will give customers the option to access Netflix via the box), one shareholder warned Laurence during a question and answer session at the annual general meeting the company has to do better than what he called the bug-filled Navigatr software interface used on Rogers' NextBox personal video recorder for digital cable TV.
Neil Palmer, who said he works for a computer server reseller, called Navigatr "lipstick on a pig" and a "disaster" that is "poorly tested, untested code."
"Who is responsible? How much did Rogers pay for this disaster? Are they seeking their money back? Who is responsible for the poor testing of the code," he asked.
"It seems to me you've had the worst of the worse," Laurence replied. On the other hand, he added, 78% of customers say they like Navigatr, although he acknowledged there were many initial complaints.
"In terms of who's responsible," he also said, "I'm responsible, because I run the company."
He pointed out a company executive Palmer should speak to after the meeting.
Earlier, in a speech to shareholders, Laurence said 2015 had been "a good year. We re-established momentum in wireless and Internet, began our journey to fix TV and media and made good progress on customer experience."
“Trust me; it makes money, we're happy with it." – Guy Laurence, Rogers Communications
The primary Rogers Wireless brand "had lost its way," so Fido was aimed at millennials, Chatr at those looking for basic cell services, and Rogers Wireless as a premium brand shortly after Laurence’s arrival. The Roam Like Home program offered more roaming options, and coverage in Western Canada and southern Ontario was expanded by buying startup carrier Mobilicity.
Cable, which he admitted has been struggling, was boosted with the Rogers Ignite Internet service and the addition of 1 Gbps service last fall.
Spending on improving customer service went up last year by $100 million and the hiring of 600 new people.
Meanwhile the company continued to grow its sports and digital media divisions, he said. "We're starting to win again, and whilst there's a lot more work to do we're on the right path."
During the session with reporters, Laurence fielded a wide range of questions:
- On how he'd like to see the 600 MHz wireless spectrum auction structured (no date has been set yet) and if there should be set-asides for smaller competitors: "The structure of the industry has changed since the last time, so that needs to be recognized in whatever comes out in the rules this time."
- On news reports that the Rogers is unhappy with the poor ratings NHL hockey games have had in the two years since it took over production in Canada: "People just make stuff up and write it … there is no truth to it." Hockey Night in Canada "makes a profit (now)," he said. Last year Rogers said it made in excess of 10% on the broadcasts. He guesses it will be around 10% this year because there are no Canadian teams in the playoffs. "It will absolutely, definitely, without any shadow of a doubt make a profit (this year). Period."… You get a lot of people writing garbage about this …Trust me; it makes money, we're happy with it."
- On whether Rogers will close print publications, whose revenues are declining: "I don’t think that's where we’re focused right now. My view is you don’t go there first. Where you go first is take every dollar your spending and look whether you can make it more efficient."
Earlier this year, the company said it would cut 4% of its Media employees, about 200 people, in television, radio, publishing and administration.
"If you've got a systemic decline in revenue in things like publishing, then you look to how much you invest in those businesses, and if you decide to save money on one side you then take that cash into areas that are growing, because they need feeding. So digital and sports are prime examples of where we're putting money in… You have to cut your cloth according to your revenues"
The reason Rogers launched its Texture digital magazine platform was to put company magazines online, he said, so readers can find "fine journalism."
"There is a future for journalism on line, it's finding the right model in order to make it attractive to advertisers and/or subscribers in order to make sure you've got a business,” Laurence added.
But, he admitted, no one has found the right financial model yet. Neither free content or a paywall have worked well, he said, and suggested the answer is "in the middle. We just have to keep experimenting until we find it."
