Cable cord-cutting numbers soar in Canada thanks to Netflix, high prices, says report
80% more people cut the cord in 2015 compared with 2014, says report
The number of Canadians cutting the cord is soaring in Canada, says a new report.
According to the Convergence Consulting Group, 190,000 Canadians ended their ties with traditional TV in 2015. That's an 80 per cent increase from the previous year when 105,000 people cut the cord.
"It's almost a doubling of a loss," comments Brahm Eiley, president of the Toronto-based market research company. He says the jump is statistically significant because it's such a radical shift compared with just two years ago.
According to his numbers, only 13,000 Canadians cut the cord in 2013, while in 2012 there was actually a gain of 32,000 TV subscribers.
Eiley expects the big drop in 2015 to be "the new normal." His company forecasts that 2016 will see a decline of 191,000 TV subscribers in Canada.
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Convergence Consulting devises its report based on an analysis of information including interviews and company financial reports.
The Netflix factor
Eiley says there are two big factors driving the cord-cutting craze: the power of Netflix and pricey telecom services.
According to his report, Netflix had 4.9 million Canadian subscribers in 2015. That's a rise of 58 per cent compared with 2013.
"Netflix's growth has not abated in Canada," says Eiley. "It just keeps adding a huge whack of customers every year."
Part of Netflix's allure is that it typically only costs Canadians $10 a month. Another attraction these days, says Eiley, is that the streaming service has added much more content to its Canadian library.
Canadians also now have more streaming options aside from Netflix. They include Shomi, CraveTV, and the new Rogers sports streaming service.
Eiley predicts cord-cutting numbers will continue to rise as more streaming services crowd the Canadian marketplace.
"As the alternatives really grow in Canada, we'll be revising our forecasts upwards," he says.
Cutting cable cuts costs
Eiley also points to price as a reason why more Canadians are cutting ties with cable.
"The economy is OK, but it's certainly not great. People are looking to cut costs," he says.
Eiley points out that Canadians pay, on average, lower cable prices than in the U.S. But he says we fork out much more for internet service.
According to a 2015 Organization for Economic Co-operation and Development study, out of 34 countries, Canada had the fifth highest entry-level prices for fixed broadband internet subscriptions.
But when it comes to making tough budgeting decisions, it appears Canadians are more inclined to cut their cable rather than their internet service, which is seen as a necessity these days.
That's the case for Amanda Gray from Sudbury, Ont. She's currently in negotiations with her telecom provider to cancel her cable subscription but keep her phone and internet.
Gray says her family was paying $180 for all their products, a price she found too high. So she downgraded to a basic TV package and turned to Netflix to fill the gaps.
Now she says her family barely watches their cable TV. "We put a baseball game on, on the random Sunday that my grandparents are here for dinner," she says.
Mostly, her family tunes in Netflix. "There's no commercials, there's no waiting for another episode," says Gray.
She especially likes that one of her favourite series, Scandal, is now updated with a new show every week instead of having to wait a year to watch a new season.
"I feel like cable is almost a thing of the past, like dial-up internet," says Gray.
Eiley highlights a surprising statistic in his findings — Canadians are bigger cord cutters than Americans.
He says that the U.S. saw about a one per cent decline in TV subscribers in 2015. But Canada saw a bigger 1.5 per cent decrease.
On the surface that seems odd because Americans have access to so many more streaming services such as Amazon, HBO and Hulu.
However, it appears that many Canadians find "creative" ways to watch shows and movies that they can't legitimately stream. Methods include illegal downloading and virtual border hopping to access Netflix content restricted to other countries.
It's "our dirty little secret," says Eiley.
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He stresses that it's hard to truly chart the number of pirates in Canada and that the activity is probably not on the rise. Instead, he concludes, "piracy is just a constant" in our culture.
Future viewing habits
It's important to remember that most Canadian households still subscribe to traditional TV — more than 11 million at last count.
But there's no denying that cord-cutting numbers keep on rising. Some industry analysts had speculated that the new CRTC-mandated $25 skinny basic TV packages would help stem the tide. But there appears to be little interest in the new offering.
On the plus side for telecom providers, Eiley says, the number of internet subscribers is growing and people aren't clamouring to give up their wireless phones.
But cable is a service customers can cut without losing access to content.
Gray admits that if she didn't have Netflix as an option she wouldn't be about to cancel her TV subscription.
But, because she can find alternatives, she sees cable as "just one of those things that's phasing out."