IPTV in Canada will continue to make strong gains in the coming years and will offset video declines at cable and satellite, providing Canadian pay TV operators positive net gains in subscribers and revenue.
But the growth in total pay TV subscribers will likely not be enough to boost pay TV penetration any higher, say industry analysts at IHS Screen Digest. They maintain this year marks the peak in pay TV penetration.
Their recently released report points out that nearly 10 per cent of Canadian pay TV subscriptions were with IPTV providers in the third quarter of 2012 –that’s 3 per cent more than in the third quarter of 2011 and a huge jump from the 1.6 per cent level of five years ago.
The report echoes other industry analysis: Mario Mota, a partner at Ottawa-based research and consulting firm Boon Dog Professional Services Inc, and principal author of the Canadian Digital TV Market Monitor, wrote recently that IPTV’s share of the Canadian digital TV market is forecast to reach about 17 per cent by the end of 2014.
As IPTV providers like Telus and Bell work on major IPTV roll-outs and infrastructure developments, IHS described, IPTV overall will continue to add subscribers as a result.
"Canadian telcos are adding IPTV subscribers at a rapid clip as Telus and Bell Canada engage in the large-scale build-outs of their infrastructure in order to reach more potential customers," Erik Brannon, analyst for television research at IHS, said in a news release. "IPTV will continue to make strong gains in Canada in the coming years, eroding the dominant position held by the cable and satellite services."
Bell Canada's Fibe TV service now passes over 2.8 million homes, IHS noted, a figure it expects to hit 3.3 million households by the end of 2012.
“As a whole, Canada pay TV industry has been able to fend off the threat from OTT services like Netflix in large part due to strict data caps and limited OTT options. But that's not to say it won't play a role in limiting pay TV growth in the future especially if data caps start to loosen up and broadband subscribers continue to increase. Netflix has over one million subscribers but the growing content is still relatively limited compared to the US service, but it remains a viable OTT threat to pay TV.”
Nevertheless, IHS noted, Canadian cable operators are not staying idle as subscribers go elsewhere.
“Broadband service at Shaw Communications is becoming a valuable component to its bundled services and will play a pivotal role in retaining pay TV subs. In addition, the cable operator recently launched Shaw Go which allows for content on demand on mobile devices, as a response to nascent over-the-top (OTT) threats from Netflix and others. Shaw Cable has plans to expand Shaw Go to include live TV streaming, and to add more VoD content to increase the value of its video offerings.”