The number of Canadians cancelling their subscriptions or forgoing cable TV altogether is accelerating, according to a new report.
In a study released Wednesday, Convergence Research Group Ltd. estimated 2016 saw a decline of 220,000 traditional TV subscribers in 2016, compared to a decline of 190,000 in 2015. Convergence said it expects another 247,000 to cut their cords this year.
The research group said Canada's TV subscriber base is declining by two per cent per annum, and for 2019 they forecast a three per cent drop.
Convergence said that 2012 saw the start of the rise in the trend toward households that were cord cutters or had never had a traditional TV subscription. The trend toward cord-cutting began to pick up in 2012, Convergence said.
By the end of 2016, an estimated 3.8 million Canadian households, or about 26 per cent, did not have a traditional TV subscription with a cable or satellite TV provider — up from 3.43 million, or roughly 23.8 per cent of all households, at the end of 2015. That figure is forecast to rise to 4.18 million, or about 28.4 per cent of all households, by the end of 2017.
In the United States, an estimated 22.3 per cent of households did not have a traditional TV subscription at the end of last year, up from 20 per cent at the end of 2015. Convergence said it sees that figure rising to 24.6 per cent of U.S. households by the end of this year.
- Basic TV can't stop consumers from cutting cable
- ANALYSIS: Cable TV price hikes could inspire cord-cutting
- Cord-cutting ramps up ahead of pick-and-pay TV
The trend away from traditional TV subscriptions also means revenue is flowing in different directions, the report said.
Convergence estimates that Canadian revenue from over-the-top subscription access, which refers to media delivered via the internet, grew 35 per cent in 2016, to $651 million. The figure is based on 16 over-the-top providers, led by Netflix but not including Amazon. Convergence said Amazon did not raise its prices in Canada when it added video streaming to its Amazon Prime service.
Broadband revenue to exceed TV revenue in 2019
"We forecast $827 million for 2017 [and] $972 million for 2018," Convergence said.
Conversely, the firm estimates that Canadian revenue from traditional TV access declined 1.3 per cent, to $8.97 billion, and is forecast to come in at $8.92 billion this year and $8.85 billion in 2018.
Convergence said it sees residential broadband revenue exceeding TV revenue in 2019, four years after the number of residential broadband subscriptions surpassed TV subscriptions.
Rose Behar, a senior reporter with technology news website MobileSyrup, questions whether the big three Canadian providers — Rogers, Bell and Telus — will be able to stem their losses of TV subscribers given the ways they currently offer the service.
"I think that unless the big three… invest more in digital services, perhaps over-the-top services like Netflix, as with Bell's Crave TV, they're at risk of becoming sidelined to just being a utility provider of wireless data only in the future," Behar told CBC News.
"As we're going forward, we're moving toward a society that is much more mobile focused, much more wireless data focused and much more focused on global service platforms like Netflix," she said.