A new report from Convergence Research Group predicts a decline of 247,000 Canadian TV subscriptions for 2017, up from an estimated 220,000 lost subs in 2016.
Convergence’s report, “The Battle for the North American (U.S./Canada) Couch Potato: Online & Traditional TV and Movie Distribution,” notes that the rise in cord cutting households — and households that never installed a cord to cut in the first place — began in 2012 and is steadily accelerating. In 2016 there was 362,000 new households without a traditional TV subscription and Convergence predicts 388,000 more are coming in 2017.
In total, Convergence predicts there will be 4.18 million Canadian households that forego traditional TV subscriptions through cable, satellite or telco TV access providers in 2017, up from an estimated 3.43 million in 2016.
Instead of traditional TV subscriptions, users are moving towards over-the-top (OTT) services like streaming platform Netflix. Converge estimates (based on 16 OTT providers including Netflix but excluding Amazon) that Canadian OTT access revenue grew 35 percent o $651 million in 2016 and forecasts it will hit $827 million in 2017.
This strongly affects the financial bottom lines of Canadian cable service providers; Convergence estimates that 2016 Canadian cable, telco satellite TV access (not including OTT) revenue declined 1.3 percent to $8.97 billion and it predicts $8.92 and $8.85 billion for 2017 and 2018 respectively.
Operators can still depend on broadband internet, however. The research group notes that Canadian residential broadband subscription additions increased by 409,000 in 2016 and revenue grew by nine percent to $7.48 billion with a forecast of 381,000 new additions and an eight percent revenue increase in 2017 — though this increase would still see it lagging Canadian TV access.
The research group believes that dynamic will flip in 2019 and residential broadband access revenue will exceed Canadian TV access revenue, just as Canadian residential broadband subs overtook Canadian TV subs in 2015.
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Source: Convergence Research Group