Over-the-top (OTT) subscription revenue continues to grow in Canada, according to Victoria, B.C.-based Convergence Research Group’s 2024 Couch Potato Report.

The annual report covers OTT, TV and the bundling of services in the Canadian and U.S. markets. Convergence estimates that, in 2023, Canadian OTT subscription revenue grew 14% to $3.73 billion. That figure is forecast to grow another 14% this year to $4.24 billion, and double-digit growth rates are expected to continue at least through 2026.

The findings are based on analysis of more than 55 OTT services from over 35 providers, led by Netflix. All dollar amounts are in Canadian dollars.

Canadian TV subscribers and access revenue are currently not experiencing as steep a rate of decline as the U.S., but the report said this could change depending on new or expanded OTT offers in Canada. Canadian population and immigration increases are also having and will have a positive impact on limiting TV subscriber losses and maintaining broadband and wireless gains.

Canadian OTT household penetration, subscriptions per household, and net OTT subscriptions are increasing at more a moderate annual rate. Based on the 10 largest OTT providers, the average Canadian price increase was 12% in 2022 and 2023, and 2024 is expected to be similar. That being said, OTT offers with advertising represent an average cost savings of 42% less compared to similar offers for services without advertising.

On the downside, Convergence estimates that last year there was a decline of 2.6% of Canadian cable, satellite, telecommunications (telco) TV subscribers, with declines forecast through 2026. Last year, it’s estimated that Canadian cable, satellite, and telco TV access revenue declined 3% to $7.2 billion. A decline of 3% per annum is expected through 2026.

Convergence estimates that 6.7 million Canadian households, or 42% of households, did not have a TV subscription with a cable, satellite or telco TV access provider in 2023. That number is forecast to rise to 50% by the end 2026.

This story from Patti Summerfield originally appeared in Media in Canada

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