IPTV revives growth in Canada's pay TV subscribers in 3Q 2013

Record IPTV subscriber growth, led by Bell Fibe TV, curbs ‘cord-­cutting’ in Canadian traditional TV service market in Q3 2013, according to new research

OTTAWA — Canada’s publicly traded television service providers[1] (cable, satellite, and telephone companies) combined added television subscribers in the third quarter of 2013 (May/June to August/September 2013) thanks to record growth of IPTV, reversing a trend of cumulative losses in each of the previous three quarters.

New research from Ottawa-based research and consulting firm Boon Dog Professional Services Inc. shows that the publicly traded TV service providers added an estimated 14,145 TV subscribers combined in Q3 in what is traditionally a strong quarter for TV subscriber growth. However, that’s about a third of the estimated 40,923 TV subscribers added in Q3 2012 and all of it was a result of record IPTV subscriber growth.

Canadian Publicly Traded TV Service Providers
Net TV Subscriber Growth/Decline
(Q3 2013 Ended August/September 2013)

TV Service Provider          TV Subscriber
        /Q3 End Net         Growth/Decline
--------------------------  --------------
Rogers – September 30             (39,000)
Bell TV – September 30             45,685*
Shaw – August 31                  (29,522)
Vidéotron – September 30           (2,000)
Shaw Direct – August 31              (835)
Cogeco – August 31                (10,573)
TELUS – September 30               34,000
Bell Aliant – September 30         14,542
MTS – September 30                  1,848
--------------------------  --------------
Total                              14,145

* The Bell TV subscriber number above excludes an estimated 1,000 wholesale satellite TV subscribers sold to TELUS. This number is included in TELUS’ reported TV subscriber number so it is excluded from the reported Bell TV number to avoid double counting.

“People should not be fooled by the growth in TV subscribers in Q3 2013 in thinking that ‘cord-­‐ cutting’ is not happening in the Canadian traditional TV service market or that the trend in cancelling TV subscriptions is over,” says Boon Dog Partner Mario Mota. “When we drill deeper into the numbers we find that the publicly traded TV service providers have lost an estimated 10,873 TV subscribers combined so far in 2013 and an estimated 19,048 subscribers combined over the last four quarters. We believe Q3 2013 represents a blip in the ‘cord-­‐cutting’ trend.”

More than 90% of all traditional TV service subscribers in Canada are customers of the publicly traded TV service providers. Given that these large and best-­‐capitalized TV service providers added customers as a whole in Q3 2013, Boon Dog estimates that the entire traditional TV service market also grew slightly in the same period. The analysis is published in Boon Dog’s the Canadian Digital TV Market Monitor research series, which estimates the size of the Canadian traditional TV service market at roughly 11.8 million households at the end of Q3 2013.

Additional key data from Boon Dog’s latest research include the following:

• Canada’s biggest four cable companies (Rogers, Shaw, Vidéotron, and Cogeco) combined lost 81,095 TV subscribers in Q3 2013 and have lost a total of 235,797 subscribers so far in 2013;
• The two satellite TV companies in Canada (Bell and Shaw Direct) lost an estimated 26,963 TV subscribers in Q3 2012 and have lost an estimated total of 87,007 subscribers to date in 2013; and
• The publicly traded IPTV providers added an estimated 122,245 IPTV subscribers in Q3 2013 and have added an estimated 311,024 IPTV subscribers thus far in 2013.

1. Rogers, Shaw/Shaw Direct, BCE, Vidéotron, Cogeco, TELUS, Bell Aliant, and MTS