Canadian over-the-top subscription revenue grew 14 per cent to $3.73 billion in 2023, compared to the previous year, and is forecast to grow an additional 14 per cent in 2024 to $4.24 billion, according to a new report from the Victoria, B.C.-based Convergence Research Group.
Based on analysis of more than 55 OTT services (from over 35 providers), led by Netflix, Convergence Research’s The Battle for the Canadian Couch Potato: OTT and TV, March 2024 report says double-digit growth rates in OTT subscription revenue are expected to continue through at least 2026.
“Canadian OTT household penetration, subscriptions per household, and net OTT subscriptions continue to see more moderate annual growth; changes in subscription offerings with a focus on advertising, price, profitability, explored in depth in this Report, have logically followed,” reads a summary of the report provided by Convergence Research.
Based on the 10 largest OTT providers, the average Canadian subscription price increase was 12 per cent in 2022 and 2023 and the report forecasts 2024 will be similar. That being said, OTT offers with advertising represent a significant cost savings to similar offers without advertising, according to the report, which says OTT services with ads on average cost 42 per cent less.
Convergence Research estimates 2023 saw a 2.6-per-cent decline in the number of Canadian cable, satellite and telco TV subscribers, and forecasts increasing declines through 2026. It estimates 2023 Canadian cable, satellite and telco TV access revenue declined 3 per cent to $7.2 billion and forecasts 3 per cent per annum declines through 2026.
As of the end of 2023, Convergence Research estimates 6.7 million Canadian households — 42 per cent of households — did not have a TV subscription with a cable, satellite or telco TV access provider, and forecasts a rise in this statistic to 50 per cent by the end of 2026.
“Canadian TV subscribers and access revenue are currently not seeing as steep a rate of decline as the US, but this could change, dependent on new or expanded OTT offers in Canada,” the report summary says. “Canadian population/immigration increases we believe are also having (and will have) a positive impact on limiting TV subscriber losses and maintaining broadband & wireless gains.”
Also released this month, Convergence Research’s The Battle for the Canadian Couch Potato: Bundling, TV, Internet, Telephone, Wireless, March 2024 report says “2019-2023 have been banner years for Canadian residential broadband subscriber additions, with 2008 and prior being the last time Canada saw better additions.”
The report forecasts 2024-2026 will continue to see robust Canadian residential broadband subscriber additions as well as sustained broadband revenue and ARPU growth.
“Although Cable continues to lead on residential broadband market share, Telco continues to chip away adding since 2018 on average/annum double Cable’s subs and is on pace to have more residential broadband subs than Cable by YE2025,” a report summary says.
Canadian wireless service (weighted) ARPU growth in 2023 was slight and wireless service revenue grew at a slower rate than 2022, according to the report.
“We forecast continued ARPU pressure through 2026. We forecast slightly better sub additions and revenue growth in 2024 than 2023 but less than 2022,” the summary says.
For more, please visit the Convergence Research Group’s website.
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