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Apr 02, 2013

Online TV gains on traditional providers

Canadian television providers are losing their decades-old grip on consumers, as viewers turn increasingly to online alternatives to find their favourite shows and movies. While the country’s broadcast regulator has suggested that services such as Netflix are being used to supplement traditional cable, satellite and IPTV subscriptions, a new report from Convergence Consulting Group Ltd. suggests that about 1.5 per cent of Canadian TV subscribers cut the link last year, and the pace has picked up since 2011. “Netflix and more free online TV episodes are the major reasons for the shift,” said Brahm Eiley, president of Convergence. “Both of these have only really become elements in the Canadian market in the last two years.” Canadian companies such as BCE Inc. and Rogers Communications Inc. are still adding to their subscriber bases, but the rate of growth has slowed dramatically in the past year. Only 52,000 TV subscriptions were added in 2012, down 77 per cent from the year before, and bringing the total to 11.9 million households, according to the report released Tuesday. The slower growth poses challenges for television companies, which face higher costs for content and delivery each year whether they are increasing their subscriber bases or not. But traditional providers aren’t going to lose subscribers without a fight. With digital video recorders making it easier for viewers to control when they watch shows (Convergence expects 50 per cent of subscribers will have the devices by 2015, up from 40 per cent at the end of 2012), and a new emphasis toward restricting access to online viewing to paid subscribers, the companies hope to persuade viewers that subscriptions are worth the money. “Video consumption continues to explode online and in mobile,” David Purdy, senior vice-president at Rogers Communications, said in an interview last week. “We have to embrace change.” Here are four business models changing the way Canadians watch television and movies: http://www.theglobeandmail.com/technology/business-technology/online-tv-gains-on-traditional-providers/article10629879/

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