TORONTO — Competition between Canada’s broadband companies and OTT video streaming services continues to intensify, according to a new report from Moody’s Investors Service.
Canadian television distributors will be able to counter some of the competition from Internet-based OTT programming by using both their traditional distribution channels as well as the Internet, and by offering a range of subscription options that balance fees against advertising support, according to the Moody’s report, titled “Over-the-Top Heats Up Broadcasters’ Battle for Subscribers and Advertisers”.
The increasing popularity of OTT television programming from Internet-based service providers could result in consumers’ cancelling of cable subscriptions in favour of Internet subscriptions supplemented with programming from companies such as Netflix, Moody’s said in a news release.
In addition, just as Netflix bypasses traditional cable television distribution, companies such as Google also bypass the traditional television broadcasting system with their advertising services.
“Since most of Canada’s television broadcasters are owned by its broadband companies, which also own the country’s television distributors, the programming and advertising effects are concentrated, but we think the broadband companies will be able to manage the growing encroachment,” Bill Wolfe, senior vice-president at Moody’s Canada Inc., said in the news release.
In Moody’s view, advertising will continue to sustain television news and entertainment programming for quite some time to come. Additionally, because broadband companies offer Internet services, they will always have subscribers and an ability to generate income. While their business models are in transition at this time, their survival is not in question, according to Moody’s.
