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More Canadians scrapping cable packages or never signing up: report

In this undated file photo provided by NetFlix Inc., a representation of the Netflix one-click remote is shown. A new report says more Canadians are choosing to cancel their cable TV and satellite packages and there's no sign of the migration slowing down.
Image Credit: THE CANADIAN PRESS/AP/NetFlix Inc., file
April 14, 2015 - 5:04 AM

TORONTO - More Canadians are choosing to cancel their cable TV and satellite packages and a new report suggests there's no sign of the migration slowing down.

The Convergence Consulting Group says about 95,000 fewer households had a cable TV or satellite subscription at the end of 2014 compared with 2013 as the number of viewers who have decided to forgo traditional TV services grew sharply from a year earlier.

By those estimates, more than 21 per cent of Canadian households or 3.09 million homes did not have a cable TV or satellite subscription at the end of last year.

"These are very strong drops in TV," said Brahm Eiley, president of Convergence Consulting, a Toronto-based firm that collects extensive data on the North American cable and phone industries.

"It's a very big deal in Canada. Everybody talked about this before, but if you go back a couple years ... we had been adding TV subscribers."

Growth in the Canadian TV market was steady from 2007 to 2011, with annual subscriber additions averaging about 220,000 households, Eiley said.

But in 2013, a change in direction started to emerge, with the number of TV subscriptions falling by 13,000.

This year, Eiley expects the industry will lose another 97,000, as the shift away from paying for traditional TV services continues at a stronger clip.

Several factors are at work in the decline, Eiley suggested. Some younger households never signed up for TV services, which pulls down net subscriber numbers, while more households who once paid for cable are putting their cash towards video streaming services like Netflix instead.

The report estimates Netflix subscribers grew to 3.9 million last year in Canada, an increase from three million in 2013.

The big telecoms have been fighting back, with competing services like Shomi from Rogers and Shaw, and CraveTV from Bell, but they require a traditional TV subscription.

"Netflix until recently was the only subscription option available to Canadians without a linear TV subscription," Eiley said.

"We expect there will be more alternatives available to Canadians in the years to come."

The study also found more Canadians are becoming comfortable watching content through other Internet platforms, whether it's through the web platforms of TV channels like CTV and CBC, or illegal downloads through torrent websites.

Eiley said it's surprising how quickly Canadians have adopted the limited number of alternatives to traditional TV, especially considering that U.S. viewers have been slower on the take-up despite a wider array of streaming video options.

Most recently both HBO and U.S. network CBS launched "over-the-top" streaming video packages, which mean they buck the cable operators with a direct-to-consumer subscription model.

"Now that the American programmers are more comfortable going over-the-top themselves, it will be very interesting to see what happens in terms of what they do here in Canada," he said.

"If things go well in the States, it will be very interesting to see what happens here in future contract negotiations between programmers and access providers (cable and satellite companies)."

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News from © The Canadian Press, 2015
The Canadian Press

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