New CRTC data suggests that reports of the cord-cutting phenomenon are being dramatically overblown, with the number of Canadian cable and satellite subscribers declining by less than one-tenth of a percentage point in 2013.
According to the CRTC’s latest financial results for Canadian cable and satellite companies, a total of 11,506,832 Canadians paid for either cable or satellite service in 2013, a negligible 0.07% decrease from 11,514,434 people in 2012.
While the advent of Netflix and other over-the-top (OTT) services has been pegged as a key factor in leading Canadians to ditch their cable subscriptions, the reality is that there were only 7,602 fewer cable/satellite subscribers last year.
It led Deloitte Canada’s director of research, Duncan Stewart, to refer to the slight change as “the smallest epidemic in history” on his personal blog. “The phenomenon known as cord-cutting is almost entirely hype,” Stewart concluded.
The CRTC data did showcase some prevailing trends within the industry, however, with the cable companies growing both their revenue and subscriber numbers at the expense of their satellite competitors.
Cable companies reported 8.8 million subscribers in 2013, up 1.5% from 2012, while satellite companies recorded a decrease for the second straight year, with subscriber numbers falling 4.8% to 2.7 million.
Combined revenues for the two entities increased 4.8%, to $14.8 billion from $14.1 billion the year before.
Canadian BDUs spent $477.7 on the development of Canadian content, a 5.6% decrease from 2012. Of this total, $216 million was directed to the Canadian Media Fund, $61 million to independent funds, $75 million to the Local Programming Improvement Fund, and $125 million to cable-based community channels and other local content sources.
Individually, cable companies reported revenues of $12.3 billion from a combination of basic and discretionary television services, internet access and telephone services—a 6.1% increase from $11.6 billion in 2012.
Operating expenses increased 5.1% during the same period, from $6.6 billion to $6.9 billion, while profits before interest and taxes (PBIT) increased from $2.4 billion to $2.7 billion, and the PBIT margin climbed to 21.5% from 20.8% the previous year.
Cable companies also paid $2.3 billion in affiliate payments for the pay and specialty services they carry, a 5.2% increase from $2.2 billion the previous year.
Satellite companies recorded a 0.9% drop in revenues—to $2.48 from $2.5 billion—while PBIT increased to $439 million from $389 million a year earlier. Affiliation payments decreased 2%, to $794 million from $812 million in 2012.
