OTTAWA-GATINEAU – Canadians appetite for content continued to grow last year in all media including TV, radio and Internet. But increasingly that content is being purchased primarily through the five largest communications companies (Astral, Corus, BCE, Newcap, Rogers) who together captured 83% of revenues. In comparison the next five companies captured 10%.
This according to figures released in the CRTC’s Annual Monitoring Report that provides an overview of the Canadian communications industry. Given the level of industry consolidation, the commission says it has acted to ensure these companies “do not harm their competitors or restrict consumer choice.” For example, it says in cases where businesses both produce programming and distribute content it has issued a vertical integration policy that ensures:
- fair treatment for independent broadcasting distribution and programming services that must compete against strong vertically integrated competitors;
- protection of commercial information; and
- timely resolution of disputes between parties in the Canadian broadcasting system.
The policy also prohibits companies from offering television programming on an exclusive basis to their mobile or Internet subscribers.
In 2011, companies that operated in multiple markets collectively had 9.4 million subscribers (6.4% more than in 2010) who bought discounted ‘bundled’ services. On average Canadian family spent more than $180 per month on communications services.
"Canadians are enthusiastic consumers of creative content, whether it is offered on television, radio or through digital platforms. The fact that they are spending more time watching or listening to programming is good news for Canadian creators," said Jean-Pierre Blais, Chairman of the CRTC in a statement.
On a weekly basis, Canadians watched an average of 28.5 hours of television, up from 28 hours in 2010. Internet television watching also spiked, from 2.8 hours a week from 2.4 the previous year. The number of wireless subscribers also jumped by 6% to 27.4 million or more than 78% of households.
Despite the concentration of revenues within the largest companies the CRTC maintains competition is improving. It reports that the share of total wireline revenues claimed by alternative service providers increased from 37.3% in 2010 to 38.4% in 2011. This group’s market share included the incumbent telephone companies operating outside their traditional territories (relatively unchanged at 6.5%), other facilities-based providers such as cable companies and hydro utility companies (up from 24.5% in 2010 to 25.6% in 2011) and resellers (which remained the same at 6.3%).
Overall, competitors experienced strong growth in the number of residential local lines (which increased 5.7% to 4.7 million) and business lines (which increased 24.7% to 1.4 million). Cable companies, in particular, have become important competitors in this market reports the commission. Since they began providing local telephone service in 2005, these companies have captured 33% of local residential lines.
Voice over Internet Protocol (VoIP) offers an alternative to the traditional circuit-switched telephone system. In 2011, there were 4.4 million retail VoIP local telephone lines, representing 24% of retail local lines. Approximately 350,000 of these lines were access independent, allowing consumers to access local service remotely with an Internet connection.
Cable companies are also major providers of high-speed Internet service. In 2011, they served approximately 57% of high-speed residential Internet subscribers.
New wireless entrants captured approximately 4% of wireless subscribers and 2% of revenues in 2011. Overall, the number of wireless subscribers increased by 6.0% in 2011 compared to 8.5% in 2010. Average per-subscriber revenues increased 0.2% (from $57.86 to $57.98 in 2011) due in large part to increased data usage.
The overall revenues for the communications industry climbed to $59.3 billion in 2011, a 3.3% increase from $57.4 billion in 2010. Broadcast revenues climbed 5.5 per cent to $16.6 billion from 2010, and revenues from telecommunications services increased by 2.5 per cent to $42.7 billion. Overall, the communications industry accounted for about 4.6 per cent of Canada's gross domestic product in 2011.
In 2011, the broadcasting industry contributed $3.1 billion to the creation and promotion of Canadian programming, an increase of $132 million from the previous year.
In 2011, revenues generated from the provision of Internet services increased by 6.3%, or from $6.8 billion to $7.2 billion. Internet services accounted for 17% of all telecommunications revenues.
Television
Overall revenues for commercial television services experienced a 5.6% growth, from $6.05 billion in 2010 to $6.39 billion in 2011. Private conventional television stations generated $2.15 billion in revenues in 2011, the same as 2010. Specialty, pay and pay-per-view television and video-on-demand services saw their revenues increase 8% from $3.5 billion in 2010 to $3.7 billion in 2011.
In 2011, private conventional television broadcasters invested $562.9 million in Canadian programming, $118.3 million less than the $681.2 spent the previous year. During the same period, spending on Canadian programming by specialty and pay television services totaled $1.2 billion, a slight increase from 2010.
The CBC's conventional television stations reported $500 million in advertising and other commercial revenues, an 11.1% increase from $450 million in 2010. The national public broadcaster invested $709.8 million in Canadian programming, a 3.9% increase from the $683.4 million spent in 2010.
Radio
Canadians still found time to listen to the radio, average 17.7 hours of radio a week, up from 17.6 hours the previous year. Additionally, 22% of anglophones and 17% of francophones streamed the signal of an AM or FM station over the Internet.
Private radio stations captured 77.4% of the weekly radio tuning share, the Canadian Broadcasting Corporation (CBC), 13%, and other stations, 9.5%. The revenues of private commercial broadcasters increased by 3.9%, from $1.55 billion in 2010 to $1.61 billion in 2011.
In total, 1,183 radio services and 702 television services were offered to Canadians last year.
Wireless
New wireless entrants (WIND, Mobilicity, Public Mobile, Videotron) have doubled their market share in 2011 with approximately 4% of wireless subscribers and 2% of revenues. In 2011, Canadians paid on average $57.98 per month for wireless services, which was roughly the same amount as the previous year's monthly total of $57.86.
In 2011, telecommunications companies allocated $9.4 billion for capital expenditures, which are used to maintain, improve or expand networks. This amount represents an increase from the $8.4 billion spent in 2010.
The number of subscribers to home telephone services continued to decrease in 2011, falling by 2.7% to 12.2 million. The average monthly bill of a telephone line was slightly lower, from $31.35 in 2010 to $31.23 in 2011.
About 78% of Canadian households had Internet service in 2011, and the number of subscribers of wireless services grew by six per cent, with newer competitors doubling their market share to four per cent. Canadians continued to migrate to faster Internet services: the percentage of households with download speeds of at least 5 megabits per second rose from 51% in 2010 to 54% in 2011. The average monthly bill for broadband Internet services increased by $1.80, or from $36.99 in 2010 to $38.79 in 2011.
In 2011, 38% of Canadians aged 18+ owned a smartphone and 10% owned a tablet. Four per cent of Canadians watched television programming on a smartphone and 3% on a tablet.
Cable
The number of Canadian households that subscribe to basic television service increased by 2.2% to 11.8 million, equivalent to 89.6% of all households. Cable companies served the majority, or 69.9% of subscribers, while satellite companies served 24.5% and companies that deliver television programming through telephone lines (known as an Internet Protocol Television service) served 5.6% of subscribers. The average television subscriber paid $61.86 per month, an increase from $59.73 in 2010.
