TORONTO – An increasing number of Canadian households are opting to cut the cords from their television services providers and landline telephones, according to two new reports from Convergence Consulting.
The Battle for the North American (US/Canada) Couch Potato: Online & Traditional TV and Movie Distribution predicts that Canadian TV cord cutter households will reach 665,000 (5.7%) by year-end 2014, a significant jump from the 380,000 estimated at the end of 2013. Based on its ‘TV Cord Cutting Model’, which takes into account annual subscriber additions, economic conditions, and the digital transition, the report estimated that 458,000 (3.9%) Canadian TV subscribers cut their TV subscriptions from 2011-2013 to rely solely on Netflix, over-the-air, online, etc., with 193,000 (1.6%) in 2013 alone.
The report also estimated that only 2,000 Canadian TV subscribers were added in 2013, a sharp decrease from 37,000 TV subscriber additions in 2012, and forecasted a TV subscription loss of 32,000 for 2014. Annual Canadian TV subscriber additions averaged 220,000 from 2007-2011, the report added.
The report also examined full-episode television shows that Canadian broadcasters and specialty networks made available online for free (not requiring a TV subscription, iTunes, Netflix, etc.) in 2013. It estimated that 18% of the weekly viewing audience watched on average two to three episodes at a broadcaster or specialty network website, the same as in 2012, and forecast 18% for 2014. The leveling of growth was attributed to the popularity of Netflix, increasing PVR penetration, online advertising loads, and more authenticated online full episodes available through TV service providers’ walled gardens.
The Battle for the Canadian Couch Potato: Bundling, Television, Internet, Telephone, Wireless predicted that by the end of 2014, 26.3% of Canadian households will drop their landline phones in favour of wireless service only. That is up from 22.5% in 2013.
Canadian annual wireless subscriber additions continue to be moderate, and wireless subscriber smartphone penetration, which was at 65% at the end of 2013, is predicted top 72% by the end of this year. Weighted ARPU is forecast as 1.4% for 2014, the same as it was for 2013.
Residential broadband subscriber additions in 2013 were estimated at 337,000 and revenue grew 8% to $6 billion. The Telcos are now adding more subscribers per annum than cable, and the report forecasts a 1% drop in cable market share versus the telcos from 2013 – 2106.
Led by Bell and Telus, Canada’s telcos will continue to grow their Canadian TV market share, ending 2014 with 19%, up from 15% at the end of 2013, the report continues. Cable had 63% and satellite had 22% last year, and those shares are predicted to drop to 61% and 20% by the end of this year.
The report estimated that 2013 Canadian cable, satellite, and Telco TV access provider subscription revenue grew 3% to $9.2 billion last year. At the end of 2013, 50% of Canadian TV subscribers had PVR and 69% had HD.
