Linear TV: Not Dead Yet

You’ve probably heard the saying “reports of my death have been greatly exaggerated”, a phrase that originated in the midst of a global speaking tour Mark Twain was on in 1895. When Twain found out that the rumours had evolved from an illness to his demise he uttered the now oft-repeated phrase and then carried on with his schedule. With the marked shift away from broadcast and cable TV and toward on demand OTT services, it’s worth asking if linear TV is on its deathbed. Or could it just be the Mark Twain of media?

In the screen-based industries the hot topic for the past few years have been OTT streaming services such as Netflix, Hulu, and Amazon Prime. And as you’ve probably noticed from your Twitter and Facebook feeds, people are talking about streaming fare such as The Marvelous Mrs. Maisel and Russian Doll a lot more than they’re talking about the network sitcoms and sports and live events that fill large parts of broadcast schedules.

In Canada there are also the OTT/streaming offerings such as Crave, Alt TV, Ignite, and Illico from Bell, Rogers, Corus, and Videotron. Together, Canadians spend about $1 billion annually on these on-demand options, making it easy to see how the rumour mill gets churning about the death of traditional TV.

A closer look at the viewing habits of Canadians would suggest that not unlike Mr. Twain, rumblings about the death of linear TV in Canada have been overstated, at least for the moment. A December 2018 report that tracks cord cutting behaviour in Canada reports that about three quarters of Canadian households still use non-OTT delivery channels such as cable or satellite TV.

Old habits die hard

For many there’s a comfort in the relationship between established viewing habits and push models of TV programming. According to GlobalWebIndex, Canada ranks #9 in the world in linear television viewing, and the linear TV numbers are particularly striking for francophone Canadians. In French Canada the average daily consumption of linear TV is highest among G20 countries, ranging from 2.2 hours daily for those in the 16-24 age bracket and 3 hours daily for those aged 55-64.

From cord cutters & cord nevers to ‘cord jumpers’

The above are just a few of the surprising statistics about Canadians and linear media consumption in 2019. There are also things that are not surprising, such as the correlation between age and cord cutters or cord nevers. 45% of Canadians under 30 are either cord cutters, or those who had cable and then stopped subscribing, or cord nevers, or those who never had a cable subscription in the first place, with the percentages declining as age increases, as one would expect.

Source: http://media-cmi.com/downloads/CMI_Cord_Cutting_Trend_Tracker_121918.pdf

Research from Media Technology Monitor (MTM) issued in January 2019 provides additional insights into the distinct viewing habits of Canadians. It reports on a phenomenon in Canada known as ‘cord jumping,’ in which people with a subscription to either OTT or cable services cancel them, but with the intention of subscribing again in the future. This on again, off again relationship with subscriptions may be related to promotional offers, or to synching up cable or streaming commitments with special live events or premieres.

The resilience of the Canadian Corded TV Market

As evidenced by research on viewing habits, there’s a relaxed familiarity associated with the ‘lean back’ experience of traditional TV for some, though in the Canadian market there are additional factors affecting modes of viewing.

Industry analyst Jeff Fan recently noted that Canadian media companies aren’t witnessing the same decline in video subscriptions as their U.S. counterparts. Fan sees various factors at play, among them the fact that the dominant service providers, Bell and Rogers, “are still very much vertically integrated, especially when it comes to sports content.” Simply put, there’s a concentrated ownership of teams, specialty sports channels, and fixed and wireless distribution. Therefore, Fan points out, there’s “a larger vested interest to protect the traditional linear video subscriber base and ARPU [average revenue per user].”

Source: https://mobilesyrup.com/2018/05/16/cord-cutting-far-less-prevalent-in-canada-than-the-us-report/

As our local market has the unique challenges of Canadian content considerations and the related policy implications, the country also trails behind the U.S. in terms of unbundled and à la carte services. Through these, consumers can subscribe directly to, for example, HBO without a cable package through its HBO Now offering, or receive a variety of cable and specialty channels without the constraints of a pre-assembled cable package or subscription. These options start at from $15-$25 (USD) per month, through providers such as Spectrum, that offers 60 channels to Apple TV or iPhones for those and Philo, with a channel line-up including premium channels such as A&E, BBC America, Comedy Central, and Sundance TV, but no sports or local broadcast channels.

Other factors being thrown into the mix are the direct to consumer options in the pipeline from Disney in late 2019 (at which time the company’s contractual obligations to Netflix come to a close), Apple, and AT&T (owner of Time Warner since 2018). It remains to be seen if consumers view direct to consumer offerings for specific media brands as an addition to their media diet or as a substitute for the cable and/or OTT services they may already be subscribing to.

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