New MTM report shows shrinking rate of TV subscriptions

New data shows an overall drop in the share of English Canadians subscribing to TV services over the last year. MTM, a project of CBC/Radio-Canada, released a report Thursday that showed the proportion of Canadian anglophones subscribing to cable TV had fallen to 43 per cent last fall from 46 per cent a year earlier. It had been as high as 64 per cent in 2005, MTM said. "The decrease can be attributed to the increase of competition in many markets across Canada," MTM said in the report. The percentage of satellite-TV subscribers declined to 20 per cent from 21 per cent, though that fall is within the survey's margin of error of 1.5 percentage points, 19 times out of 20. MTM said satellite-TV penetration among English Canadians peaked at 27 per cent in 2011. IPTV services from incumbent telephone providers, including BCE Inc. and Telus Corp., was flat from a year earlier at 18 per cent, MTM said. Strong growth in previous years has brought the penetration rate of such services up from six per cent in 2010 and less than one per cent in 2007, according to MTM's figures. "Unlike cable and satellite, the Telco TV market is expected to grow in the coming years as their footprint expands," MTM said in the report. Michel Arpin, broadcast consultant and a former vice-chairman of broadcasting at the CRTC, said he was skeptical of MTM's report of no growth in the telco-based IPTV market, given corporate reporting from companies such as Bell and Telus that shows strong gains. "The report is somehow contradicted by hard facts," Arpin said in a phone interview. In its fourth-quarter report, Bell said its IPTV customer base had grown 42 per cent from a year earlier to 933,547. In its report released Thursday, MTM said more than half of anglophone Canadians subscribing to telco-TV service do so with Bell, and that includes the Bell Aliant division that was fully bought out by the parent company late last year. Telus' fourth-quarter figures shows its TV subscriber base grew 12.4 per cent over the year to 916,000, though it did not separate IPTV from satellite subscribers. MTM said Telus has 30 per cent of English Canada's telco-TV subscriber base, though only five per cent of the satellite-TV market. Gerry Wall, president of Ottawa telecommunications consulting company Wall Communications Inc., said the bigger trend in TV distribution is not so much about cord-cutting as it is about a "redistribution" of customers among the different services. He noted the CRTC's most recent communications monitoring report indicated just a small decline in the proportion of Canadians subscribing to a TV service, to 84.9 per cent in 2013 from 85.6 per cent in 2012, and it also showed there have been gains from a rate as low as 83 per cent in 2009. "As a systematic data-gathering exercise, you can't beat because they're getting the actuals from the companies and 100 per cent completions from the entire populations," Wall said in a phone interview. Six per cent of respondents in the MTM survey said they get TV signals over the air, up from five per cent a year earlier. MTM said in its report that there has been a "small but stable base" of over-the-air viewers since the national transition to digital signals in 2011, which created a need for different equipment for reception. The proportion of anglophones getting TV over the air was as high as 10 per cent in 2005, MTM said. The percentage of those classified as "Tuned-Out," or not subscribing to a TV service or getting over-the-air TV, was at 12 per cent last fall, MTM said. That was up from 11 per cent a year before, MTM said, and had been as low as four per cent in 2007. MTM said this segment of people are often "not very interested in TV" or "access TV content primarily from the Internet." Among people aged 18 to 34, it was found that 23 per cent did not subscribe to a TV service or access over-the-air TV signals, and this was true for 26 per cent of students and 18 per cent of those with household incomes of less than $35,000 a year. Survey results released by the Canadian Internet Registration Authority (CIRA) late last month found that 39 per cent of 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. Wall said while many young people who don't subscribe to TV services now never will, others will find as they get older that a TV subscription works for their changing lifestyles, particularly if children are involved. Arpin said because the companies providing TV service in Canada also happen to be the ones providing Internet service, a trend toward the Internet for video content is not necessarily negative for them. "From the perspective of the service provider ... it's somehow meaningless," he said. "To some extent, it might be good business for them because then they could get more dollars for service than from those that are maintaining their television subscriptions." Arpin said he said the practice of providing TV and Internet as separate services could ultimately disappear, with virtually all video services eventually coming from online sources. However, he does not expect this to happen for another 10 to 20 years, given society's aversion to change. "Until people are forced to do something, they hold on," he said. The MTM report said Rogers Communications Inc. has a 40 per cent share of anglophone Canadian cable subscribers and Shaw Communications Inc. has 35 per cent. Among major TV service providers, Telus' subscribers were the biggest bundlers of service with 35 per cent subscribing to four services from the same company and 80 per cent having at least three, MTM said. The data showed Shaw had the lowest level of bundling among its TV-service customers with 35 per cent subscribing to just the one service and 69 per cent subscribing to no more than two. MTM's data was based on phone surveys by done by Forum Research Inc. of 4,002 anglophone Canadians aged 18 or older between Oct. 8 and Dec. 12. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca CORRECTION: A previous version of this story incorrectly identified Michel Arpin as the CRTC's former chairman of broadcasting.

New MTM report shows shrinking rate of TV subscriptions

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