March 26, 2019
With Canada Netflix’s highest household penetration market, it’s no surprise consumer spending on subscription streaming video across the northern border surpassed CA$1 billion in 2018, according to new data from Futuresource Consulting. Overall spend on video entertainment in Canada remained flat at CA$11.3 billion.
By 2022, video entertainment in Canada is expected to be a CA$12 billion market, with SVOD carving out significant market share. In 2018, pay-TV accounted for 74% of the market, with SVOD and box office accounting for 9% each. However, by 2022 consumer spend on SVOD will be twice that of box office and therefore accounting for 17% of all video entertainment spend.
“SVOD spend broke through the CA$1 billion mark in 2018, up 33% with 11.3 million subscriptions,” Tristan Veale, market analyst at Futuresource Consulting, said in a statement. “This was driven by market leader Netflix, which reached 6.3 million subscribers, despite a steep price hike in 2018.”
The research firm said 58% of Canadian households have at least one over-the-top video subscription, with household penetration reaching 69% by 2022 — equal with pay-TV.
Growth was driven in part by Bell Media’s revamped Crave SVOD service which saw a nearly doubling of subs in 2018 – thanks in part to assimilation of pay-TV operator’s The Movie Network channel; in addition to Amazon Prime Video.
The rise in SVOD spend contributed to 8% drop in transactional (packaged media and digital) home entertainment revenue to CA$853 million.
Futuresource said consumers are buying more digital content digitally than renting — with EST spending projected to surpass transactional VOD and on-demand pay-TV by 2022.
Indeed, Canadians are buying more digital movies with nearly 7 million EST transactions recorded in 2018 — up 18% from 2017. Apple iTunes continues to drive EST sales in Canada, which accounted for over two thirds of spend across movies and TV content. Other services include Google Play Movies and Cinemax.
“There are an estimated 1.3 million Apple TVs in use in Canada, equivalent to 10% of households,” said Veale. “This means consumers have an easy way to watch premium content on a big screen, driving increased buying.”
Notably, Amazon has yet to commit to digital rental/sales of movies and TV shows in Canada, in addition to France, Italy and Spain.
“When it does launch, it could be a catalyst to propel these markets to the next level,” Veale said.