VICTORIA — According to Convergence Research Group’s newest “The Battle for the Canadian Couch Potato: OTT and TV” report, based on analysis of more than 50 “over-the-top” streaming services (from over 35 providers), Canadian OTT access revenue grew 35% to reach $2.05 billion in 2020.
Convergence Research estimates such streaming revenue in Canada will grow a further 32% to $2.71 billion in 2021, and reach $3.96 billion in 2023.
“We forecast the almost doubling of annual Canadian OTT access revenue over the period will continue to mostly benefit non-Canadian players,” such as Amazon, Apple, DAZN, and Netflix reads the company’s executive summary for the report.
“Canada is increasingly being impacted by the OTT war being waged by global programmers and independent OTT providers. Although for global programmers Canada is a direct-to-consumer opportunity as well as an opportunity to sell to Amazon, Apple, DAZN, Netflix, Canadian programmers and linear/OTT providers continue to remain attractive.
DAZN’s procurement of major soccer rights, along with Disney+, Discovery’s GolfTV, and NBCU’s hayu “impinge on the Canadian TV/OTT model,” says the report. “(O)n the other hand WM’s HBO, CBS (three Star Treks)/Showtime, Lionsgate’s Starz have made multiplatform deals with Bell, as has NBCU’s Peacock with Corus,” continues the summary.
On the traditional side of the TV business, Convergence Research estimates 2020 Canadian cable, telco and satellite TV access revenue declined 3% to $8.14 billion and it is forecasting a 3% decline in 2021 as well.
The report also estimates 2020 saw a decline of 389,000 Canadian traditional pay-TV subscribers, which followed a decline of 278,000 TV subscribers in 2019. Convergence Research is forecasting a further decline of 427,000 Canadian TV subscribers in 2021.
According to the company’s Canadian cord cutter/never household model, as of the end of 2020, an estimated 35% of Canadian households did not have a TV subscription with a cable, satellite or telco TV provider, with that percentage forecasted to rise to 45% by the end of 2023. While some Canadians decide to cut the cord, fewer new households are opting for a TV subscription.
“Canadian TV subscribers and access revenue are currently not seeing as steep a rate of decline as the U.S. but this could change in the medium term — dependent on new, or expanded, OTT offers in Canada,” says the report’s summary.
The company also released its latest “The Battle for the Canadian Couch Potato: Bundling, Television, Internet, Telephone, Wireless” report, which includes some of the same data from the OTT/TV report.
According to the bundling report analysis, 2020 and 2019 were banner years for Canadian residential broadband subscriber additions,” and the research forecasts “2021 will be stronger, with 2008 and prior being the last time Canada saw better additions than 2019, 2020 and 2021 projected. Although cable continues to lead on residential broadband market share, telco well exceeded cable on additions in 2019 and 2020 and we forecast telco will continue to exceed cable on additions through 2023. We forecast 2021 Canadian residential broadband revenue will rise 8% to $10.4 billion,” reads the summary.
“Although between Covid, unlimited wireless plans, the Government’s (wireless) price reduction mandate, Fizz, as well as Shaw Mobile bundles and Freedom, we expect ARPU pressure to continue, we forecast service revenue and modest ARPU growth in 2021 and go-forward, after 2020’s unusual decline. We estimate about a million wireless subscribers were added in 2020, and forecast 2021 will see higher gains,” says the report’s summary of the wireless segment.
For more, please visit Convergence Research Group’s website here.
