VICTORIA – Canadian households are still cutting the cord from their television services providers while residential broadband subscriptions spike, say two new reports from Convergence Research.
The Battle for the Canadian Couch Potato: Online and Traditional TV and Movie Distribution estimates that 220,000 Canadian TV subscribers opted to cut the cord in 2016, compared to a 190,000 decline in 2015, and predicted that another 247,000 would eschew a paid TV subscription in 2017. Hence, Canada’s TV subscriber base is declining by 2% per annum, and the report forecasts a 3% drop in 2019.
As of year-end 2016, the report estimated that 3.8 million Canadian households (26% of HHs) did not have a traditional TV subscription with a cable, satellite, or telco TV access provider, up from 3.43 million (23.8% of HHs) at YE2015, and forecast that number would rise to 4.18 million (28.4% of HHs) by the end of 2017. In addition, 2015 saw 333,000 cord cutter/never household additions, 2016 saw 362,000, and the report forecasts 388,000 for 2017.
Canadian residential broadband subscribers surpassed Canadian TV subscribers in 2015, continues the report. In 2016, Canadian residential broadband subscriber additions were estimated to be 409,000 and revenue grew 9% to $7.48 billion. In 2017, the report predicts those numbers will dip to 381,000 and 8%, and forecasts that Canadian residential broadband access revenue will exceed Canadian TV access revenue in 2019.
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 2016. It estimated that 19% of the weekly viewing audience watched on average four episodes at a broadcaster or specialty network website, and that figure will remain at 19% for 2017. The lack of growth was attributed to the rise of OTT services, increasing PVR and TV Everywhere penetration, and online advertising loads.
The company also estimates Canadian OTT subscription access revenue (based on 16 OTT providers, not including Amazon, and led by Netflix) grew 35% to $651 million in 2016, and forecast $827 million for 2017 and $972 million for 2018.
The Battle for the Canadian Couch Potato: Bundling, TV, Internet, Telephone, Wireless estimates that Canadian residential wireline telephone lines declined 6% in 2016 and forecasts an additional 6% drop in 2017.
Canadian wireless-only household are predicted to be 37% YE2016, and will rise to 42% by YE2017 and 49% for YE2019, continues the report.
Almost 1 million Canadian wireless subscribers were added in 2016, and wireless subscriber smartphone penetration is predicted top 79% by the end of this year, up from 76% at year-end 2016. Weighted ARPU is predicted to grow 1.7% for 2017, down from 2.4% growth in 2016.
New Canadian wireless entrants Eastlink, Shaw, and Videotron are expected to capture a 7.3% share of the market by YE2017, up from 6.6% year-end 2016, the report adds.
Cable, telco, and satellite will have a 56.4%, 26.3%, and 17.3% respective share of the Canadian TV market share by the end of 2017, compared to a 57.6%, 24.2%, and 18.2% share at YE2016.
The report estimates that 2016 Canadian cable, satellite, and telco TV access provider subscription revenue fell 1.3% to $8.97 billion. At the end of 2016, 65% of Canadian TV subscribers had PVR and 84% had HD. As well, TV access provider revenue forecasts are $8.92 and $8.85 billion for 2017 and 2018.
