THE CORD-CUTTING ANALYSIS in Friday’s Summer Numbers: CRTC TV data dump highlights, lowlights says that 11.12 million households subscribed to cable, satellite or IPTV service in Canada in 2016, down only slightly – 3.5% – from 11.5 million in 2016.
I agree this doesn’t seem like a big drop over four years especially given the market changes in that period.
But when we look at the numbers relative to the total number of households in Canada, we see a different story emerge.
In 2011, there were 13.32 million occupied households in Canada per the census and 11.5 million of those subscribed to cable, IPTV or a satellite service, which meant a healthy penetration rate of 86% as the CRTC noted in its Monitoring report back then.
The 2016 Canadian census is just out and it shows the new Canadian household count at 14.07 million – or a net gain of three-quarters of a million households. And if 11.12 million of these occupied households are subscribers to TV services per CRTC report in 2016, that means we now a national penetration number of 79%.
To put these numbers another way, the number of households without paid TV increased by about one million nationally in the space of four or so years! That’s a huge number and represents nearly $1 billion in annual revenue that’s no longer available to BDUs and, by extension to specialty channels, producers and Canadian creators.
So the 3.5% loss to cord cutting is only the visible tip of a big iceberg. What’s really worrisome is the dynamic of a large number of new households being formed in Canada where the occupants are simply not bothering with a TV subscription.
Even using conservative assumptions, it’s not far fetched to project that that the number of households with paid TV can drop below 70% in five years, unless the industry really focuses on delivering innovation and the kind of value for money the consumer is seeking.
It’s a big challenge but there are good signs as of late: Cogeco’s consumer-friendly pick-and-pay options, Shaw’s value-add BlueSky TV service, Bell’s Alt TV for example, are all initiatives in the right direction.
Kaan Yigit is president of Toronto research firm Solutions Research Group.
