Shares of BCE Bell Media (TSE:BCE) (NYSE:BCE) were trading 0.54% higher today as CIBC World Markets reiterated its “sector perform" rating for the company, setting a target price of C$57 for the next 12-18 months.
The analysts saw an upside as BCE, or Bell Media, announced that its internet TV streaming service would become accessible to all consumers in January 2016. In other words, it will not be necessary to be a Bell customer to take advantage of CraveTV; everyone will be able to subscribe.
"As our business model has continued to evolve, the time is right to also offer CraveTV as a stand-alone product. We are pleased to provide TV lovers across Canada with full access to the thousands of hours of premium television programming available on CraveTV," said Bell Media’s president, Mary Ann Turcke.
Analyst Robert Bek says CraveTV was originally launched as a “defensive” tactic to support the company's television channels and not to attract more traffic.
Bek suggests that BCE has since changed its strategy, deciding to position itself as a leader in the niche Internet TV market such as others like Apple and several cable companies have done with their virtual cable services in the United States. BCE may decide to increase its rate of C$4 a month.
Bek believes that the decision is a message to TV broadcasters, noting that the latter’s profitability has continued to erode except where sports programming is concerned. But, in his view, TV broadcasting will continue to drop in popularity due to ever growing audience fragmentation.
Only the companies providing Internet access will be able to offset the phenomenon.
Bek says he expects earnings to be C$3.15 per share and a dividend of C$2.60 per share (4.8%).