Industry Report: Streaming Numbers Continue to Climb Among Canadians

It might not be a stretch to say that streaming video is almost one of those quintessentially Canadian things – up there with hockey and maple syrup.

That's because it's quickly becoming the most popular way in which Canadians get their televised entertainment, according to a recent report from media analysis firm eMarketer.

"If Netflix was measured like traditional broadcasters in Canada—with weekly time-spent figures and reach metrics across age, gender and regions—there is little doubt it would be a challenger for the number one network in the country," says the report, titled Canada Streaming Video 2018.

"Since its launch in Canada in 2010, the first non-US market launched by Netflix, it has become a viewership juggernaut, climbing to north of 50 per cent of the English-speaking population in most estimates."

About 17.4 million Canadians subscribe to video streaming services, the report says, with nearly three-quarters of those opting for Netflix. Canadians are also subscribing to a host of other services, including Bell Canada's CraveTV, Amazon Prime Video and others. Overall subscriber numbers are expected to continue to climb, to 19.7 million by 2020.

Thanks to a different mix of services in the U.S., the numbers there play out a little differently. About the same percentage of Americans overall – 57 per cent – pay for a streaming service, but only about half of those subscribe to Netflix, according to a CNBC survey earlier this year.

About a third of American streamers subscribe to Amazon Prime Video, while a further 14 per cent use Hulu, a service owned by major U.S. broadcasters. Amazon's service launched in the U.S. in 2011 and only expanded to Canada last year. Hulu, which launched in 2007, is not available in Canada.

About 10 per cent of Canadians subscribe to Amazon Prime Video as a result, according to eMarketer, while about 9 per cent have signed up to CraveTV, launched by Bell in 2014.

The overall growth of streaming in Canada is leading to an acceleration in traditional cable TV cancellations. The number of so-called cord-cutters will grow to 267,000 this year, up from 216,000 last year, according to Convergence Research Group.

Streaming is also directly eating into live viewing over traditional cable, according to figures from the Canadian Radio-television and Telecommunications Commission (CRTC). The average viewer in English Canada watched 24.3 hours of TV a week last year, down from 27.7 in 2010. Streamed viewing saw a corresponding rise over the same time frame, to 3.8 hours per week from just over half an hour.

The growth is provoking reactions from traditional players on several fronts.

On the one hand, cable providers are improving their services with new internet-enabled features in an effort to keep subscribers interested. Rogers' recently launched Ignite TV, for example, allows viewers to pause and restart programs on different devices. Some Rogers-owned programs also offer on-demand streaming.

On the other hand, several industry players are calling on the federal government to level the taxation playing field with foreign-based streaming providers. National broadcasters such as CTV and Global say it's unfair that they're required to pay into a fund that helps create Canadian content while some streaming services others don't have to.

Netflix also doesn't charge subscribers sales tax, whereas some Canadian services do.

The government has so far opted against imposing taxes on foreign-owned services, but a review of the Broadcasting Act – which would govern both local broadcasters and internet streaming providers – is underway. An expert panel is expected to submit its recommendations by early 2020.

Canada could follow Europe in requiring foreign-based services to contribute to local content creation with official rules. The European Union is set to institute a 30-per-cent local content quota by the end of this year.

Cable providers in North America have otherwise been counting on sports – that one area of television that most people still want to watch live – as the hook to keeping subscribers. But ratings in a number of sports, including football and baseball, have declined or experienced volatility over the past few years, raising questions about how effective that strategy might be.

In Canada, however, hockey ratings appear to be healthy. Despite what the obvious subscription numbers indicate, maybe hockey is still more Canadian than streaming after all.

* The title of this article was changed on December 11, 2018