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Bell Media Looks to Expand Movie Network with HBO Deal

Bell Media, a division of Canada's leading communication service provider - BCE Inc.BCE - has struck a long-term licensing deal with HBO. This lends Bell Media the flexibility to offer all current, past and library HBO programming exclusively on its linear, on-demand and over-the-top (OTT) video streaming platforms like CraveTV in English and French across Canada.

Bell Media had previously announced that CraveTV will be offered with an Internet subscription in Canada from Jan 2016. Moreover, in Sep 2014, Bell Media had acquired the exclusive national multi-platform rights to the whole off-air library of HBO programming, which is now offered on CraveTV.

Bell Media's HBO contract lends it the right to all current HBO series for the first time. Meanwhile, the financial terms of the deal have been kept under wraps.

Additionally, Bell Media and HBO have inked an original deal to co-produce premium, made-in-Canada content for international markets.

Expansion of the Movie Network

Bell Media plans to expand its Eastern Canadian pay-TV channel - The Movie Network (TMN) - into a national one.

This decision was largely influenced by Corus Entertainment's decision to wind down its Movie Central and Encore Avenue pay-TV operations in Western and Northern Canada.

Moreover, Corus Entertainment will be giving up its HBO content rights in Canada, which will make Bell Media the sole operator of HBO Canada nationally, across all platforms.

Bell Media's movie network is thus set to operate as a national pay-TV platform starting from the first quarter of 2016, which will likely raise its customer base to roughly 2 million subscribers in the country.

Notably, BCE will be paying $211 million to Corus Entertainment for the expansion of The Movie Network and HBO Canada, nationally. Moreover, Bell Media and Corus Entertainment are working in tandem for a smooth shift of Movie Central and Encore Avenue subscribers to The Movie Network.

Our Take

Notably, the HBO deal positions Bell Media as the exclusive Canadian provider of all HBO programs.

Moreover, Bell Media will be the first company to solely deliver all HBO content, thereby expanding the reach of its lucrative suite of pay-TV channels which include The Movie Network and HBO Canada.

We believe that such positive developments will give a significant boost to Bell Media and result in higher revenues for the segment. Notably, in the third quarter of 2015, Bell Media generated revenues of approximately $529.2 million, up 4.1% year over year on higher advertising and subscriber revenues.

BCE presently has a Zacks Rank #2 (Buy). Other favorably ranked stocks in the sector include Ruckus Wireless, Inc. RKUS , AT&T, Inc. T and United States Cellular Corporation USM . While Ruckus Wireless sports a Zacks Rank #1 (Strong Buy), AT&T and United States Cellular hold the same Zacks Rank as BCE.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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