160,000 Canadians cancelled TV subscriptions last year

Even though about 160,000 Canadian cancelled their TV subscriptions last year, conventional cable and satellite TV providers saw revenues decline just 0.1 percent to $8.9 billion

Companies mostly offset the loss in revenue by charging remaining subscribers more. A Canadian Radio-Television and Telecommunications Commission (CRTC) report said that the number of TV subscribers declined from 11,404,591 in 2014 to 11,246,669 last year, a decrease of 157,992. TV providers have offered remaining customers expanded or better services but at a price. The average monthly charge was up from $65.25 in 2014 to $66.08 in 2015.

The TV companies also managed to cut costs. For example, they spent less on making Canadian content, $38.1 million less than last year. The industry employed fewer people last year as well, 27,244 which is a 6.3 percent decline from 2014.

Earlier this year a number of providers raised their fees slightly which may have caused some users to cut the cord. Companies such as Netflix may also be a factor in more people not using conventional TV. In a recent quarterly report, Solutions Research Group said that as of June this year 5.2 million Canadians pay for a Netflix subscription. There are about 13 million households in Canada according to Statistic Canada, so Netflix is well on its way to reaching half of all Canadian homes.

Even more of a threat to conventional TV providers are "cord-nevers". These are people who have never really considered conventional TV necessary in the first place. Many of them are younger. Sukhpreet Sangha, 27, has never signed up for cable or satellite TV. She said: "It just seemed to be not worth the cost when I could get enough of what I wanted in other ways. I'm not sure I would call [traditional TV] passé, but I would call it unnecessary." As well as getting movies through services such as Netflix, news, music, sports, etc. can be accessed via computers. A recent online survey of 32,000 American adults discovered that of 24 percent who did not subscribe to cable, only 6 per cent were cord-cutters, while 18 percent were cord-nevers. Many in the new generation of young Canadians may find that conventional TV is not worth subscribing to, since what they want is available by other means at a lower price tag.

CRTC rejects $3.4 billion takeover bid by BCE for Astram Media

The Canadian Radio-television and Telecommunications Commission rejected the Bell $3.4 billion deal to buy Astral Media. The Canadian regulatory commission claims that the deal would give BCE too much market power and threaten competition in the media.

The CRTC rejected the proposed deal unconditionally. Many analysts thought that the deal would go through but with conditions attached.

Jean-Pierre Blais, chair of the CRTC said:

"BCE failed to persuade us that the deal would benefit Canadians. It would have placed significant market power in the hands of one of the country’s largest media companies. We could not have ensured a robust Canadian broadcasting system without imposing extensive and intrusive safeguards, which would have been to the detriment of the entire industry."

The proposed deal was one of the largest takeovers ever sent to the CRTC. It was also the first major decision for newly installed commissioner Blais. If the deal had been approved, BCE would have owned 107 radio stations, two national television networks and 49 pay channels as well. Its share of the English TV sector would have been a whopping 42 percent. In the radio sector, BCE would have 25 per cent of revenues. It would be larger than the next two biggest competitors together.

Blais noted that BCE had not made any commitments to local programming or local artists, activities the CRTC would like to see promoted. In TV, BCE would have had about 45% of viewing share in English, and 35% in French.

The CRTC was concerned that BCE would have even more influence in negotiating its share of must-carry services with distributors. The CRTC also thought that BCE would increase its presence in premium content containing exclusive and/or live programs that would be unavailable elsewhere. The CRTC said that BCE did not show that it needed to be larger to compete with foreign services.

Competitor Rogers, which had opposed the deal, commended what it called the courageous decision of the CRTC. Gavin Graham of Graham Investment Strategies said:

“I was very surprised. The expectation here was fairly widespread they would approve it with some restrictions.”

Although competitors Rogers, Telus, and Quebecor had all joined in opposing the deal, Calgary-based Shaw Cable was for it. Shaw president, Peter Bisonnette said the real threat in Canada is not large Canadian players such as BCE would be, but online services such as Netflix and Apple TV. He said:

"We urge the commission to support our efforts to respond to the real competitive threat to the system — unregulated, foreign (over the top services) like Apple, Google, Amazon and Netflix."

BCE has 30 days to appeal the ruling to the Federal Court of Appeal. As an alternative, BCE could change the proposal and apply again for approval.