What are Canada’s couch potatoes watching?

OTT revenues increased by 29% in 2017, according to a new study by Convergence Research, and are expected to continue climbing.

copied from media in canada - tvshutterstockOTT is making some serious gains in Canada, and its gains might be TV’s loss.

That’s according to the latest study by Convergence Research, which has concluded its annual “Battle for the Canadian Couch Potato” review. The study uses the year-end revenue reports from the various internet, OTT and TV providers to determine subscription growth across platforms.

That figure is based on the increase in OTT revenues over the year, compared to the revenue that comes from Canadian television access.

Convergence estimates that Canadian OTT access revenue (including subscriber revenue, activation fees, one-time membership fees, etc.) grew by 29% in 2017, bringing the total revenue to $872 million for the year. The forecast for this year is $1.11 billion, and by 2020, Convergence expects OTT revenue to reach $1.58 billion.

On the other hand, revenue for cable, satellite and other pay TV access (not including in-package OTT offerings) declined by 2% to total $8.74 billion. The forecast for 2018 is another 1% decline, coming to $8.64 billion this year.

Based on revenue, Convergence estimated that in 2017, Canadian TV services lost a total of 216,000 subscribers – fewer than the number lost in 2016 (225,000). However, based on the prominence of cord-cutting and the maturation of cable and satellite markets (according to Convergence, they have not added net new subscribers since 2010), the firm predicts that the decline will go at a more rapid pace in the next several years, at an average decrease of 2.6% per year.

As of year-end 2017, an estimated 4.14 million Canadian households (28.1% of households) did not have traditional TV subscriptions, up from 3.78 million the previous year. The forecast for year-end 2018 is 4.55 million (30.5% of households).

Broadband subscribers grew by an estimated 442,000 people, the largest annual addition since 2009. Revenue grew by 8% to $8.06 billion. By year-end 2018, revenue is predicted to rise to $8.7 billion, exceeding the year’s predicted TV access revenue.

In a separate study released this week, Toronto’s Solutions Research Group found than 57% of Canadians stream Netflix, based on a poll of 1,000 Canadians in February 2018. That’s up from 48% in October 2017. Based on these results, and factoring in the number of multiple households that uses one account, the study estimated Netflix has 6.1 million users in Canada. The survey also found that 19.6% of households subscribing to the internet do not have a paid TV subscription, up from 16.5% in 2017.