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Cord-cutting continues as Canadians ditch TV & landlines

Apr 7, 2014

Online streaming services expected to get 665,000 customers this year, and 25% of homes have no phone

Source: CBC News

More Canadians are abandoning traditional telephones and TV services, reflecting a growing trend prompted by changing lifestyles, according to a new study.

The Convergence Consulting Group said Monday that by the end of this year it expects 26.3 per cent of Canadian households will be going without landline telephones and relying solely on wireless telephone service. That is up from 22.5 per cent in 2013.

Households are also increasingly abandoning traditional TV in favour of programming from other sources such as Netflix and other online services.

By the end of this year, TV subscriptions that will rely only on Netflix and other online services will reach 665,000 households, or 5.7 per cent, according to the study, which is based on statistics from cable, satellite and telecom companies as well as Convergence's own analysis.

From 2011 to 2013, Convergence estimates that 458,000, or 3.9 per cent, of households relied solely on Netflix and other non-traditional TV services.

"We're mobile and we want things when we want them," Brahm Eiley, co-founder of the Toronto-based consulting group, said in explaining the switch. "This is a very different market right now. We live in a different era."

Eiley said low-cost "all you can eat" voice packages on mobile phones have contributed to households dropping their landline phones.

Traditional TV service providers — cable, telecom, satellite and IPTV — are also facing negative subscriber growth this year as viewers find alternatives and the market matures, Eiley said.
Cable TV growth slowing

The study estimated that Canadian TV service providers will lose a total of 32,000 subscribers overall in 2014.

"It's a lacklustre market after growing very radically for some years," Eiley said in an interview.

Convergence Group said that just 2,000 Canadian TV subscribers were added in 2013, down from additions of 37,000 in 2012.

"There are these alternatives to watch and they are priced less in many cases and so people are doing that."

Netflix, which came to Canada in late 2010 and costs about $8 a month, is a prime example. Canadian Netflix, which has less content than its U.S. counterpart, had an estimated three million subscribers last year, up from 2.2 million in 2012, Eiley said.

However, traditional TV still brings in the most revenue per user for service providers at $65 a month, compared with $45 per user for Internet service, Eiley said.

"TV is far from dead, . . . " he said. "It's taking a couple of hits, but the revolution is still going to be televised at the end of the day."

© CBC News