Canadians spent an estimated $2.05 billion on over-the-top (OTT) services like Netflix and Disney+ in 2020, according to a new report from Convergence Research.
An over-the-top streaming service is a platform offered directly to consumers over the internet. The report analyzed over 50 OTT services from over 35 providers.
The report estimates that Canadian OTT access revenue grew by 35 percent in 2020. Convergence Research estimates that access revenue will grow by 32 percent growth to $2.71 billion in 2021 and to $3.96 billion in 2023.
“We forecast the almost doubling of annual Canadian OTT access revenue over the period will continue to mostly benefit non-Canadian players,” the report states.
The firm states that Canada is increasingly being impacted by the OTT war being waged by global programmers and independent OTT providers.
“Although for global programmers Canada is a direct to consumer opportunity as well as an opportunity to sell to Amazon, Apple, DAZN, Netflix, Canadian programmers and linear/OTT providers continue to remain attractive,” the firm outlines.
“DAZN’s procurement of soccer, Disney+, Discovery’s GolfTV, NBCU’s hayu impinge on the Canadian TV/OTT model, on the other hand WM’s HBO, CBS (3 Star Treks)/Showtime, Lionsgate’s Starz have made multiplatform deals with Bell, as has NBCU’s Peacock with Corus.”
Unsurprisingly, the report found that cord-cutting is becoming more popular. For instance, the firm estimates that there was a decline of 389,000 Canadian TV subscribers in 2020 compared to a decline of 278,000 in 2019. The firm forecasts a decline of 427,000 in 2021.
The report outlines that Canadian TV subscribers and access revenue are currently not seeing as steep a rate of decline as the U.S. but this could change if new or expanded OTT services are offered in Canada.
Further, it’s estimated that 35 percent of Canadian households didn’t have a TV subscription with a cable, satellite or telco TV access provider in 2020. Convergence Research estimates that this number will rise to 45 percent in 2023.
Convergence Research compiles its annual reports through several sources including company interviews, and annual and quarterly reports.