Canadians may be starting to cut the cord on traditional television packages, as figures published Thursday by the federal broadcast regulator show subscribers declining for the first time in the face of proliferating online options.
The total number of subscribers to cable and satellite services fell by 7,602 to 11.5-million in the year ending Aug. 31, 2013, according to the Canadian Radio-television and Telecommunications Commission, a tiny decline that nevertheless marks the first downturn after slowing growth in recent years.
Much of the drop was made up of lost satellite subscribers, who dwindled by 4.76 per cent last year, and some of whom may have switched to cable services. But a 1.46-per-cent rise in cable subscribers was not enough to offset the those ditching their dishes, suggesting some people have abandoned traditional television packages, in some cases choosing to stream cheap and free Web content instead.
Cord-cutting has become a widely-reported phenomenon in the United States that, until now, was not overly apparent in Canada. But last month, a report exploring possible regulatory changes published by the CRTC noted some Canadians appeared to be choosing “to opt out of the traditional system entirely.”
“It's statistically small, but if you take these numbers out over the next 10 or 15 years, they become worrisome,” Brahm Eiley of Convergence Consulting Group said.
A parallel problem for the broadcast distributors could be so-called “cord-nevers,” who don’t sign up for television services in the first place. As the Canadian population adds about 170,000 households annually, broadcast distributors will fall behind if they can’t reignite subscriber growth. Mr. Eiley’s firm estimates the proportion of households without a TV subscription will rise by a full percentage point in 2014, to 21.1 per cent.
“And that is accelerating,” he said. “Not massively, but it's starting to grow.”
The only regional decline in Canadian cable subscribers was a 0.9-per-cent decrease in B.C. and the Territories, while subscriptions in the Prairies stayed essentially flat, according to the CRTC.
At the same time, cable distributors’ revenue rose 6 per cent in 2013 to more than $12.3-billion, driven mostly by a 6.3-per-cent increase in revenue from subscription fees. Revenue for satellite distributors went the other way, down 0.86 per cent after falling nearly 2 per cent the year before. Broadcasting companies spent nearly $478-million developing Canadian content, or 5.6 per cent less than in 2012.
Yet the Television Bureau of Canada, which advocates for the country’s largest broadcasters and distributors, argues the notion of an emerging exodus to online services is overblown. A three-part survey of viewers, commissioned by the bureau and conducted by Ipsos-Reid late last year, acknowledges consumers have more video options available to them. But it suggests they still spend 83 per cent of their viewing time on commercial television, much of it live programming, and just 17 per cent on streaming services such as YouTube, Netflix and shows from online stores such as iTunes.
Separate statistics from the firm Media Stats also show total television subscriptions declined ever so slightly in the first half of 2013, returning closer to 2010 levels.
With a report from Simon Houpt.