October 17, 2016
Rogers President and CEO Guy Laurence is stepping down today, with Chairman of the Board Alan Horn taking the reins temporarily, and former Telus CEO Joseph Natale expected to step in as the new president and CEO in 2017.
Laurence's abrupt departure coincides with the announcement of Rogers Communications Inc. (Toronto: RCI)' third-quarter earnings results. The Canadian cable company is reporting total revenue of C$3.5 billion (US$2.66 billion) in the quarter, up 3% from a year ago, but cable revenue of only C$865 million (US$658 million), down 1% on the year due to a continued draining away of pay-TV subscribers. Rogers also took a loss of C$140 million (US$107 million) in Q3 related to the recent shutdown of its subscription video-on-demand service, shomi, which it operated with fellow Canadian MSO Shaw Communications Inc. .
While Rogers' wireless business and the Internet side of its cable division have performed well under Laurence, the pay-TV business has struggled. During the July Q2 earnings call, the company said it would launch an IPTV service before the end or 2016, but few details have emerged since. The lack of clarity around the IPTV offering combined with traditional subscriber losses and the shuttering of shomi are all a black mark on Laurence's record, particularly as competitive video pressures continue to mount.
On their earnings call this morning, Rogers executives sought to portray the abrupt leadership change as a tribute to the well regarded Natale, not a knock on Laurence's performance as CEO. "You should look at this as a move to secure the services of a Joe Natale," Horn told analysts. "It's a unique situation. It wasn't related to Guy's tenure."
But the timing and abruptness of the move seem to suggest otherwise, especially since Rogers officials are not even sure yet when Natale will be able to take over because he is still bound by the terms of his non-compete clause with Telus Corp. (NYSE: TU; Toronto: T). Natale left Telus this past summer in part because of a reluctance to move his family from Toronto to Vancouver, where Telus is based. As it so happens, Rogers is based in Toronto.
Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading. As background, Rogers and joint-venture partner Shaw announced the shutdown of shomi in September. That news was a surprise, coming just weeks after shomi was on the press circuit touting the service's new search and recommendation engine powered by ThinkAnalytics Ltd. Common wisdom holds that shomi simply couldn't gain enough traction against streaming rival Netflix Inc. (Nasdaq: NFLX). (See shomi Personalizes OTT Service with ThinkAnalytics.) Rogers is still banking on the upcoming launch of its IPTV service, but the company will have a lot to prove given the lack of success many of its fellow cable companies have had with IP video initiatives. Both Shaw and Cox Communications Inc. in the US scrapped their own IPTV services in favor of licensing Comcast's X1 platform, including IP video content. Recently, Comcast Corp. (Nasdaq: CMCSA, CMCSK) announced it's integrating Netflix into the X1 platform, opening up a new distribution route for the popular over-the-top video provider. (See Shaw Starts X1 Phase 2 and Comcast Binges on Netflix in New Beta.) For Rogers, temporary CEO Horn says, "During the [leadership] transition, it's business as usual." Former Telus Corp. (NYSE: TU; Toronto: T) CEO Natale, however, will have a lot on his plate when he joins the company next year. — Mari Silbey, Senior Editor, Cable/Video, Light Reading
About the Author(s)
You May Also Like
SCTE® LiveLearning for Professionals Webinar™ Series: Going to 10G & BeyondJul 26, 2023
Cable Next-Gen Business Services Digital Symposium 2023Jul 26, 2023
Open RAN Evolution Digital Symposium Day 2Jul 26, 2023
SCTE® LiveLearning for Professionals Webinar™ Series: Priming the Pump for Next-Gen PONJul 26, 2023