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Allarco (Super Channel) in bankruptcy protection

19K views 46 replies 20 participants last post by  Dr.Dave 
#1 ·
Allarco Entertainment 2008 Inc. and Allarco Entertainment Limited Partnership (Allarco) announced today, after consideration of all available alternatives, that it is initiating a Court-supervised restructuring process under the Companies' Creditors Arrangement Act ("CCAA") in order to facilitate a restructuring and refinancing of its business operations...Allarco will continue to operate under CCAA protection...
Source: Official Press Release

Allarco launched Super Channel in 2007 and previously operated under CCAA from June, 2009 to August, 2010 because it had difficulty gaining carriage on many TV providers.

I found an article in the Edmonton Journal where Allarco is based.
Company president Malcolm Knox said Friday their revenue has been hit over the last 18 months by subscribers dropping Super Channel...While lots of people still sign up, he said the $15 to $18 monthly price charged by many of the cable and satellite firms that offer Super Channel is too high....“We have been working with all of (the providers) to get us repriced to 10 bucks … We have found with those that have reduced us, the retention rate is higher.”

...

“It’s always a challenge, but we’re looking ahead to having a strong programming lineup in the fall, working at this in the summer and coming out the other side. A lot of companies in our industry have used this process.”
 
#2 ·
Although I'm a subscriber to both Superchannel and The Movie Network, I hope SC shuts down. It doesn't benefit Canadians to have two movie networks if all it does is split the good programming between the two. The quality of movies on TMN has really declined since SC launched but if I give up one it will be SC.

-Mike
 
#9 ·
If they drop their most popular series they might as well just shut down.

... some [series] are from non-premium channels in the US or overseas.
Why does that matter?

... Homeland would probably be on a regular specialty channel like Bravo or Showcase if SC didn't exist.
It is on Bravo, but much delayed. New episodes of Homeland would probably be on TMN like most Showtime series.

They really want to pitch this as being nearly twice as expensive as Netflix?
You didn't read the first post.
 
#4 ·
Superchannel is definitely not a good deal at $15. Many of their series are second run or air after the US showing and some are from non-premium channels in the US or overseas. In addition, they have fewer series than TMN/HBO. I subscribed a couple of times when it was half price. Since then, then the quality of programming seems to have gone downhill so I wouldn't even pay that.

I second the opinion that SC is draining good programming from other channels. Homeland would probably be on a regular specialty channel like Bravo or Showcase if SC didn't exist. The same goes for a number of other series. $15/mo is gouging for the variety and quality of programming that SC provides. I might pay $5 bundled with TMN if they pick up some new first run series.
 
#5 ·
I used to subscribe. Dropped the service after the Falling Skies series originally on TNT ended summer 2015. Just too many series intended for non-premium channels, 2nd and 3rd rate movies to pay $18 a month on Shaw. Even $10/month is pushing it for what's on there now. maybe $5 as suggested by ExDilbert.

I think they should have negotiated a deal to become Showtime Canada a few years back, but all Showtime programming is on TMN now.

I wonder if Corus or Bell Media would buy them out, or just let it circle the drain?
 
#7 ·
SuperChannel used to cover boxing matches that HBO wouldn't have. I haven't seen any boxing on their since maybe last year.
I keep it just for the rare gem that might be on it but when it goes, it won't be missed.
 
#11 ·
CSL, I don't see Corus getting in on bidding for Super Channel. They just barely got out of Premium Pay TV ownership with their closure of Movie Central.

Rogers would be the most likely to get Super Channel, if the bidding rights came up. If not, then I'd only see the rights to all their shows/movie catalogues being defaulted to Bell Media's TMN.

In terms of the financials surrounding Super Channel, I think that the Allards might be out of era in the current TV climate. Whatever they've tried to do the last 8 1/2 years doesn't seem to have worked out well, as a whole.

=P
 
#14 ·
I just looked at Super Channel's series web page and noticed they deleted a lot of series. I'm not sure how many were old series that they were no longer showing, but I see that TNT's RIZZOLI & ISLES (Final season returns Monday, June 6) and MAJOR CRIMES (Returns Monday, June 13) are gone from the series list and not on the schedule. I wonder if someone else will pick up the first run of these shows. Showcase airs the second run of RIZZOLI & ISLES about a year after Super Channel.

Homeland from Showtime is still on the series list, but it doesn't debut until January this year, so who knows what will happen.
 
#18 ·
I think the issue is that Canadian BDUs are less likely to discount Pay TV services as drastically as much as US based MSOs. When I worked for Convergys here in Winnipeg almost a decade ago, I supported Charter Communication and we'd frequently offer HBO, Starz and Showtime for $5/month per service for periods of upto 12 months. Here in Canada, I don't see Shaw Cable offering me Superchannel for $12/month for 12 months with a 33.3% discount.
 
#19 ·
Even TMN's pricepoint of around $20/month is a ripoff when compared to online streaming options. Most BDU's didn't even offer discounts if you took both Super Channel and TMN. Super Channel came to little to late. If the CRTC truly wanted Pay-TV competition, they should have opened that up in the late 90s/Early 20s Super Channel already is not very viable even at $10/month. TMN may still have lots of subscribers but I bet even their numbers are in decline and will likely meet the fate of Super Channel if they don't adjust their business model.
 
#22 ·
The reason TMN is doing well is because they offer most HBO programming plus major Showtime series, both simulcast with HBO US and Showtime. Superchannel, even with its high price, does not carry the same quality series nor do they show them simultaneously. The best I saw was 2 days after the US showing. That doesn't play well at $15/mo. There are too many spoilers on the internet for that. Ironically, I found the most programming to watch while Superchannel had their free preview just after launch. I subscribed and found the quality of programming went downhill rapidly. It didn't take long before I cancelled.
 
#23 ·
Considering how often I get offered free two month trials of TMN these days, I suspect it's not doing so hot either. As mentioned though, it's got HBO with it, and that sure helps. For movie purposes, it makes far more sense at that price to get Netflix and one of Crave/Shomi.
 
#24 · (Edited)
Super Channel | 2010 | 2011 | 2012 | 2013 | 2014
Revenue | 25,456,902 | 31,244,670 | 35,163,330 | 36,559,372 | 38,468,067
Subscribers | 336,095 | 457,296 | 410,074 | 453,483 | 432,411
Avg. per sub/month | $6.31 | $5.69 | $7.15 | $6.72 | $7.41
Profit | -16,668,782 | 11,378,865 | -2,016,077 | 1,126,714 | 2,617,048
Profit per sub/month | | | | | $0.50
TMN/HBO | | | | |
Revenue | 136,536,094 | 138,748,064 | 136,706,702 | 127,766,895 | 124,480,286
Subscribers | 1,220,869 | 1,226,465 | 1,187,520 | 1,181,772 | 1,152,851
Avg. per sub/month | $9.32 | $9.43 | $9.59 | $9.01 | $9.00
Profit | 30,349,904 | 26,895,289 | 26,511,793 | 15,785,751 | 26,579,407
Profit per sub/month | | | | | $1.92

Source: Individual Pay Television, Pay-Per-View, Video-on-Demand and Specialty Services 2010-2014

Those are the most recent figures available from the CRTC. The reports for August 31, 2015 should be available soon.

I'm actually surprised that Super Channel had as many subscribers as they did, although the press release hints the number is dropping significantly.

Note that there isn't one single wholesale price for a channel. The rate cards are confidential, but typically charge more for smaller BDUs and give BDUs a lower price if they guarantee a minimum percentage of subscribers, although I don't know if that applies to the premium movie channels.
 
#26 ·
Super Channel's average revenue per sub/month in 2014 was $7.41, which in turn would be the average wholesale rate to the BDU.

Super Channel's profit worked out to be $0.50 per sub/month before income tax.

Before anyone jumps to the conclusion that the BDUs were charging exorbitant rates, the cost of programming is only one of the many expenses they have. The average operating margin for Cable & IPTV in 2014 was 16% and that was before interest, taxes and depreciation.

Source: Financial Summary (Basic and Non Basic Services) - Cable & IPTV - Canada
 
#27 ·
According to the Edmonton Journal, Allarco owes creditors $115 million - about $72 million of debt is secured by company assets, and the rest is unsecured. My guess is that most of the unsecured debt is owed to program suppliers and local service companies. The program suppliers have stopped providing new content since Allarco is in breach of contract for non-payment. The suppliers will probably be paid pennies on the dollar for the amounts owing.

Super Channel updated their FAQ since I last checked. I checked Versailles, Rizzoli & Isles and Major Crimes on Zap2it and none of them are airing new episodes on another channel. Super Channel "sincerely apologize" in every response (removed for brevity.)

Excerpts from Super Channel FAQ
Programming changes on Super Channel
Due to circumstances beyond our control, some previously advertised programming is no longer available on Super Channel. Check the Super Channel website for up-to-date program schedules and other great viewing choices.

What happened to 11.22.63?
Due to circumstances beyond our control, Super Channel no longer has the broadcast rights to 11.22.63. The series is unlikely to return to Super Channel so unfortunately the only way to finish the series is to watch it online via iTunes on your computer or tablet:
https://itunes.apple.com/us/tv-season/11.22.63-season-1/id1098774846

What happened to Versailles?
Due to circumstances beyond our control, Super Channel no longer has the broadcast rights to Versailles. At the moment we are uncertain who will acquire the rights in Canada.

What happened to Rizzoli & Isles and Major Crimes?
Due to circumstances beyond our control, Super Channel no longer has the broadcast rights to Rizzoli & Isles and Major Crimes. At the moment we are uncertain who will acquire the rights in Canada.
 
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