Canadian TV subs to start rising again in 2015: study

The number of Canadian TV subscribers will fall 0.31 per cent this year, and then begin increasing in 2015 at an average rate of 0.25 per cent annually until 2019, according to a new study by research company Strategy Analytics. Eric Smith, an analyst in the digital consumer practice of the company, said in a phone interview that this rise will be driven by Internet-protocol TV. Canadian IPTV services include BCE Inc.’s Bell Fibe TV service and Telus Corp.’s OptikTV. “It offers better bundling, better speed, pricing as well,” he said. "It’s a new choice in the neighbourhood that may have only had satellite or cable, so people are giving it a chance when it comes in. The operators have been growing pretty quickly over the last few years, and we expect that to continue.” According to Strategy Analytics’ forecast, IPTV subscriptions in Canada will grow an average of 11.88 per cent per year over the next six years, in contrast to cable subscriptions, which will fall an average of 1.89 per cent each year, and satellite subscriptions, predicted to drop an average of 2.54 per cent a year. He said one of the reasons cable will be less affected than satellite is because cable offers more opportunities for bundling and it tends to be less expensive than satellite, he said. “People are fleeing to cheaper choices,” said Smith, who’s based in the Boston area. In 2013, IPTV had a 12 per cent market share in Canada, cable had 64 per cent and satellite held 24 per cent, according to Strategy Analytics. By 2019, the company expects IPTV’s share to double to 24 per cent of TV-service market, while cable will fall to 56 per cent and satellite to 20 per cent. Smith said that in 2013, 10 per cent of all Canadian TV subscribers, which represents 15 per cent of all cable subscribers, still had analog cable. In Canada, he said, the digital transition is happening with less “urgency” than in the U.S., where the Federal Communications Commission (FCC) has mandated that analog-cable networks have to be shut down by 2015. “Having that process sort of drag out a little bit gives the cable operators a chance to retain customers a little bit longer,” Smith said. In Canada, cable companies, such as Rogers Communications Inc., have also been phasing out their analog signals. Smith said that as analog networks continue to be shut down, customers will be faced with the choice of digital cable or IPTV. In 2013, both in the U.S. and Canada, the number of people accessing over-the-air signals using an antenna grew 12 per cent, year-over-year, he said, adding that those viewers are also “probably supplanting that with something online, like Netflix.” This group is expected to increase an average of four per cent a year through 2019. A “very small” portion of people are going without subscriptions or over-the-air TV, Smith added. By 2019, Strategy Analytics predicts they will account for about half a per cent of Canadian TV households. At the same time, content owners will continue to move premium content, such as sports and live TV, from the public airwaves and into pay channels, he said, allowing companies to make more money on the content, and putting an “effective squeeze” on the segment of the market who chose not to pay for television service. “Bringing them back into the fold that way is very likely, in our view,” he said. The Wire Report reported in March that 2013 fiscal-year data from Canada’s major publicly traded telecommunications companies showed that it was the first year on record in which TV subscriptions in Canada declined. A report from Convergence Consulting Group Ltd., looking at all TV subscriptions for the 2013 calendar year, said TV subscription rose by about 2,000 last year and were expected to decline by 32,000 this year. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Canadian TV subs to start rising again in 2015: study

Broadcast | April 16, 2014

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