Fewer Canadians cutting the TV cord
Rate slows from 2015, CRTC figures show
Not as many Canadians followed through on threats to cancel their traditional television subscriptions last year despite more options for online video streaming, according to numbers from Canada’s broadcast regulator.
About 125,000 people cut the cord in the year ended Aug. 31, down from about 158,000 lost subscribers in the same period in 2015, according to data released Thursday by the Canadian Radio- television and Telecommunications Commission. That leaves a total of 11.1 million TV subscribers across Canada.
These numbers — based on data broadcasters must provide to the regulator ( all but two regional providers complied) — provide an alternate snapshot to independent reports that found a record number of more than 200,000 Canadians walked away from TV subscriptions last year. Those reports, however, were based on the calendar year.
But the CRTC’s financial summary revealed increased pressure on broadcasters’ profitability in a year that saw the entrance of new streaming options including Amazon Prime Video in December and Rogers Communications Inc.’ s standalone Sportsnet Now in April.
Operating margins for cable, Internet protocol TV (IPTV) and satellite fell to 16 per cent from 17.7 per cent in 2015. Since 2012, margins have dropped 7 per cent from 23.1 per cent. Expenses related to affiliation payments, sales and promotion, and administration and general all increased.
This led to a decrease to contributions to the creation and production of Canadian programming, according to the regulator. Total contri- butions fell to about $ 423 million from $ 436 million in 2015 and $ 474 million in 2014.
Overall, the CRTC’s numbers show a flattened industry that saw revenue contract 2 per cent to $ 8.7 billion in 2016 from $ 8.9 billion in 2015. Over the past five years, however, revenue grew 0.5 per cent as growth in IPTV subscriptions outweighed losses in traditional cable.
That lends credence to statements from Canada’s top cable executives that consumers shouldn’t expect the imminent death of the television business at the hands of competitors like Netflix Inc. and Amazon.com Inc.
Rogers and Shaw Communications Inc., Canada’s two largest traditional cable companies, have both adopted Comcast’s X1 platform as an IPTV solution to compete with offerings from traditional telephone companies BCE Inc. and Telus Corp.
After Shaw launched the X1 platform earlier this year, it added cable subscribers for the first time in seven years. Rogers doesn’t launch its platform until early 2018, but CEO Joe Natale recently predicted a “resurgence or revenge of the cable business” based on advancements in digital homes and video consumption.
“For the last few years, everyone believed we’re in the ninth inning of the cable business … I fundamentally believe we’re actually in the second or third inning,” Natale said in an interview in July.
Rogers and Shaw also backed away from video streaming last year, axing their joint service Shomi due to the high cost of competing with Netflix and Bell’s CraveTV.
The CRTC’s report indicated different cord cutting behaviours across Canada. Consumers in Quebec were more likely to buy TV packages, with subscriptions up 3 per cent, whereas British Columbians were more likely to cut the cord with subscriptions down 2.5 per cent.