Online video factors into cord-cutting: CIRA survey

Newly released results from a Canadian Internet Registration Authority (CIRA) survey show the availability of online video content is a factor for four in 10 Canadian Internet users who do not subscribe to cable TV. The data, released in CIRA's annual .CA Factbook, found 39 per cent of survey respondents who don't have cable said the proliferation of online video was a factor for why they don't, and this was true for 56 per cent of those aged 18 to 34. While "cable" subscriptions were specifically mentioned in this survey conducted in March last year, CIRA spokesman Ryan Hill said in an email he "would assume" respondents considered various TV subscriptions in their answers "but we didn't call out the various options specifically," such as IPTV and satellite TV. He said 27 per cent of the 1,000 Internet users polled online by the Strategic Counsel for this research identified themselves as not subscribing to cable. Hill said a margin of error was not applicable in this survey. The CRTC's most recent communications monitoring report said 84.9 per cent of Canadian households subscribed to some type of TV service in 2013. The CIRA findings come months after two Canadian online video-streaming services were launched. Shomi, a service jointly owned by Rogers Communications Inc. and Shaw Communications Inc., began operations in November. BCE Inc.'s CraveTV got started in December. Shomi is available for $8.99 a month to TV or Internet subscribers of Rogers or Shaw. CraveTV costs $4 a month and is only available to TV subscribers of Bell, Telus Corp., Eastlink, Northwestel Inc. and a handful of other broadcast distributors. Before CraveTV launched, Bell Media president Kevin Crull told The Wire Report that “there are not many people who are TV lovers and who are cutting the cord,” and by only making the service available to TV-service subscribers, CraveTV is “going after the biggest base of potential customers that’s possible." Bell Media spokesman Scott Henderson said Tuesday in an email that CIRA's findings do not contradict Crull's assertion and that those citing online video as a reason not to subscribe to cable are part of a "very small base" of people — about 15 per cent of households, according to CRTC data — who do not subscribe to a TV service. Henderson added that "there are no current plans to change the distribution model for CraveTV, and especially as subscriptions are exceeding expectations." Tanya O'Callaghan, CIRA's senior manager of product marketing, said in a phone interview that the high proportion younger people indicating online video as a factor for not subscribing to cable "definitely indicates a trend, and I think it's a trend that certainly the television, cable and other operators should be watching and should thinking about, and I think they are when we look at the availability of some of their new services like Crave and Shomi. "However, you can already see that people's way of watching and consuming television is absolutely changing. And I venture to say it's not because 18- to 34-year-olds are less TV lovers; possible even the opposite." Duncan Stewart, research director for technology, media and telecommunications for Deloitte Touche Tohmatsu Ltd. in Canada, said the idea of "TV lovers" — or the 20 per cent or so of people who watch about 10 hours of TV a day — not being cord-cutters is true. However, he added that there is a segment of people who are highly dedicated to very specific content, but do not watch a high volume of programming, and they find ways to access what they want online. "Most of the people who are subscribing to things like Netflix are the ones who watch the least TV," Stewart said in a phone interview. Stewart said the trick for content providers is figuring when there is a significant enough proportion of people not using conventional TV services that it's worth it to aggravate distribution partners by providing a more direct link to end users. "If the percentage is 99 per cent, then having a second channel makes no sense," he said. "If the percentage is 50 per cent, then having a second channel is a no-brainer. Where's the dividing line?" Complaints about CraveTV and Shomi were filed to the CRTC earlier this month by the Public Interest Advocacy Centre (PIAC) and Consumers' Association of Canada (CAC). The advocacy groups claimed undue preference in both cases because of the services' availabilities being tied to particular TV or Internet subscriptions. The CRTC suspended both proceedings last week amid several procedural submissions from both Bell Media and PIAC. The CIRA survey found that 30 per cent of current cable subscribers who use the Internet are considering cancelling their cable subscriptions, and that proportion was at 41 per cent for those 18 to 34. The polling found 34 per cent are "likely" to cancel their subscriptions in the "immediate future," and eight per cent are "very likely," a figure Bell Media's Henderson categorized as "relatively small." CIRA found that 29 per cent of Canadian Internet users reported never watching any video online, leaving 71 per cent who say they watch at least some video online on a weekly basis. The survey found that 11 per cent of Canadian Internet users stream video online for more than 20 hours a week, and this applied to 14 per cent of those 18 to 34. Interestingly, 13 per cent of those 55 or older reported streaming video more than 20 hours a week, compared to seven per cent of those 35 to 54. On the other hand, the 55-plus age group had the biggest proportion of respondents — 47 per cent — who didn't stream any video online. That compared to 27 per cent for those 35 to 54 and 14 per cent for those 18 to 34. "If the majority of Canadians are watching video online and spending more and more time watching video online, there's going to be more and more competition, so the appeal of a subscription-only service or a service that is only available to regular subscribers, if you will — corded subscribers — will probably become less and less appealing as there's more and more other services that are readily available," O'Callaghan said. CIRA's new figures also found that 47 per cent of Internet users do not know how much data is included in their home Internet subscriptions, while 16 per cent reported having 200 GB or more per month and six per cent said it was less than 20 GB. More than three-quarters said they were satisfied with their monthly data provisions, and 59 said they were getting good value for their money from their home Internet service. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca

Online video factors into cord-cutting: CIRA survey

Broadcast | February 24, 2015

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Online video factors into cord-cutting: CIRA survey

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