Move Over Rogers Communications Inc.: There’s a New Game in Town

Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) and other cable providers are about to get a wake-up call. Here’s why.

| More on:
The Motley Fool

It was a love fest down at Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI) headquarters July 20 as newly minted CEO Joe Natale unveiled the company’s plan to improve its customer service while delivering strong second-quarter results.

Rogers’s stock is 27% higher year to date in anticipation of all the wonderful things the former Telus Corporation chief executive is going to do to reverse all the bad things former CEO Guy Laurence did to lose the trust of employees and, most importantly, the Rogers family.

Natale is the conquering hero to Laurence’s bumbling fool. However, before you start planning how you’ll spend all your capital gains, you might want to have a seat.

Goodbye, cable

U.K.-based Perform Group’s DAZN (pronounced “Da Zone”) live-sports streaming service announced — the very same day as Rogers’s good news — that it had acquired the Canadian rights to NFL Game Pass, the NFL’s premium digital subscription service that allows viewers to watch every NFL game.

Rogers and the other cable operators’ loss is DAZN’s gain. And it’s only getting going.

Some liken DAZN to Netflix, Inc. (NASDAQ:NFLX), that little video streaming service that’s grown into an $80 billion market cap, calling it the “Netflix of sports.” If that’s even halfway true, Rogers and company are soon going to be feeling the pain.

The cord-cutting tsunami

Ask any sports fan what holds them back from cutting the cord, and you inevitably get, “I can’t live without my live sports,” or some other equally honest answer.

Why do you think the show Ballers is so popular? Yes, everybody loves the Rock, but it’s really about our love of pro football and sports in general. We can’t get enough of live sports — the only programming on television where advertising is still growing.

“Your average fan should think this is like Netflix,” Alex Rice, DAZN’s managing director of strategic partnerships said when discussing its entry into Canada. “It will be available on all the major connective devices, including all the major TV manufacturers.”

That’s huge.

I’ve been a Washington Redskins fan since Joe Theismann left the Toronto Argonauts in 1973 to go to the NFL. I’m seriously considering the service’s $150 annual subscription for two reasons:

First, it’s almost impossible to see their games on regular TV. Second, to do the same thing with Rogers, for which I’m already paying too much, it currently costs $300 per year for Game Pass. Even at DAZN’s $20 per month, I’m saving 20%, and it’ll gradually show more sports (probably not hockey) on the streaming service for the same monthly price.

DAZN is providing Canadians with quality TV programming at reasonable prices. How strange.

Bottom line on latest development

Rogers and the rest of the cable operators have been overcharging and underdelivering for years. Thankfully, companies like DAZN understand that customer service is about more than a happy voice when you call to complain about your cable bill.

What’s the only downside to DAZN’s announcement?

The holding company, Access Industries, which controls the streaming service through its 85% interest in Perform Group, isn’t a public company.

If it were, I’d buy that, too.

What about Rogers stock? Not so much.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Will Ashworth has no position in any stocks mentioned. David Gardner owns shares of Netflix. Tom Gardner owns shares of Netflix. The Motley Fool owns shares of Netflix.

More on Investing

Canadian Dollars
Stock Market

Where to Invest $5,000 in April 2024

Do you have some extra cash to spare? Here are five companies to invest $5,000 in next month.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Up 53% From its 52-Week Low, Is Cargojet Stock Still a Buy?

Cargojet (TSX:CJT) stock is up a whopping 53%, nearing closer to 52-week highs from 52-week lows, so what's next for…

Read more »

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »