Over the years, Canadians have developed a growing preference for paid streaming services like Netflix and Disney Plus, even as the prices for these platforms continue to climb. A recent annual report by Convergence Research suggests that the addition of ad-supported basic plans has played a crucial role in sustaining the momentum for streaming services. The president of Convergence Research, Brahm Eiley, noted that the landscape of television is rapidly changing, with streaming becoming the norm and traditional TV becoming increasingly niche.
Key points from the report include:
- By the end of last year, an estimated 46% of Canadian households, accounting for 7.35 million homes, had severed ties with cable, satellite, or telecom TV providers.
- This number is projected to rise to 54% by 2027, signaling a significant shift in consumer behavior towards streaming services.
- Traditional TV platforms in Canada saw a decline of 4% in subscribers last year, with subscription revenue plummeting by 5% to approximately $6.5 billion annually.
- The report anticipates continued annual declines in subscriptions and revenue through 2027.
Despite the increasing number of cord-cutters, consumers are facing higher costs for streaming services compared to previous years. Eiley noted that Canadian households spending.
- 8% more on digital platforms in 2024 than the previous year.
- The top 10 streaming services raised their prices by an average of 6% in 2024.
- However, despite the uptick in costs, Canadian subscription revenue soared by around 15% to $4.2 billion.
The appeal of streaming platforms lies in their diverse offerings and more affordable package tiers supported by ads. Eiley observed that even with rising prices and restrictions on password sharing, customers are drawn to these platforms due to the cost savings and the wealth of content available.
- For instance, subscription prices are 39% lower on average for packages with ads compared to ad-free options, making them a more attractive choice for consumers.
- This cost-effective approach, while sometimes involving commercial breaks, remains a driving factor for many Canadian viewers.
The rise of streaming services has prompted regulatory efforts to balance the market. The Online Streaming Act, implemented in 2023, requires foreign streamers to contribute 5% of their annual Canadian revenue towards producing Canadian content. However, global giants like Netflix and Disney Plus have contested this order, leading to a pending hearing at the Federal Court of Appeal.
In conclusion, the dominance of non-Canadian providers in the streaming market poses a challenge for Canada’s broadcasting landscape. While TV is in decline, streaming services continue to thrive, highlighting the need for regulatory measures to ensure fair contribution and support for Canadian content creators.
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