Thursday, 12 April 2012

Cutting the Cord: How Many Canadians are Going to Cancel Rogers?

Netflix and Apple TV launched in Canada in September 2010.  Both services are delivered via the internet, bypassing traditional cable/satellite companies and threatening the sale of DVDs and are largely responsible for the closing of video rental stores in your neighbourhood.   

Apple has been very low key in its marketing of Apple TV while Netflix has been very aggressive and advertised extensively and today about 1 in 12 Canadians report that they are subscribers to Netflix.  Netflix offers on demand access to a large library of older movies and TV shows and some exclusive programming and costs only $8/month.  Some fear that Netflix, Apple TV and other Internet TV services will lead Canadians to cut the cord, cancel their traditional cable/satellite subscription, or at least reduce the number of channels they pay for.

CMRI's Media Trends Survey for the first time this year asked Canadians what they thought of the new ‘channel’, Netflix, which will be the subject of a future post.  We also asked Canadians if they plan on cutting the cord or reducing the channels they receive.

Only about 2% of Canadians say they are very likely to cancel cable/satellite in the next year.  I suspect that had we asked the same question in previous years, i.e., before Internet TV, the results would have been similar.  However, the 7-8% of Canadians who say that are likely to cancel may be higher than before the introduction of alternatives, such as Netflix.  Results are similar for both cable TV and satellite TV subscribers.

Outright cancellation may not be the route most people take if they decide to spend more time and money on Internet TV.  Some may simply cancel some of the channels they currently pay for, such as The Movie Network. 1 in 6 Canadians say that in the next year they will decrease the number of channels they receive via cable/satellite; satellite TV subscribers are more likely to decrease their channels.  A smaller number of cable and satellite subscribers say they will increase the channels they receive, which would offset some of the loses that Rogers, Bell and others would lose to the internet.

What do we know about potential cord cutters, other than their conventional demographic features?  First, we know that cord cutters watch somewhat less TV than the general population, which no doubt is related to decisions about cable/satellite subscription.  Surprisingly, potential cutters tend to use the internet no more or less than others.  They do, however, listen to less radio.

When it comes to Internet TV, potential cutters are more likely to subscribe to Netflix and far more likely to download video from the internet.  Not shown in the chart is that those who are considering reducing channels are twice as likely to be Netflix subscribers.

Clearly, the primary motivation for cutting the cord is dissatisfaction with TV generally and with cable TV and satellite TV in particular. 4 in 10 of those who are very likely/likely to cancel their subscription in the next year are dissatisfied with TV and roughly the same numbers are dissatisfied with cable TV. Over 1 in 2 of those planning to cancel are dissatisfied with satellite TV.  Bell, Shaw and the CRTC should make a note.

If Rogers, Shaw or Bell would like to know the intentions of their subscribers to cancel or reduce service, please contact CMRI.

In the meantime, please enjoy this attempt to get you to cancel cable:

The 2011 survey results are from CMRI's Media Trends Survey conducted November-December 2011 among a representative national sample of approximately 900 Anglophone respondents aged 18-plus.  Margin of error +/-3.3%.  The Media Trends Survey has been conducted for ten consecutive years and has surveyed over 15,000 Canadians in total in this period. It is the only survey to have measured media use and attitudes continuously over this decade. The Media Trends Survey is not sponsored by any one industry or affiliated with a media company.  Therefore, the surveys are scrupulously designed not to bias respondents into favouring one medium or media outlet over another.

1 comment:

  1. As a proud 'cord-cutter' of about 5 years, I can say that I've enjoyed the absence of cable tv very much. Viewers are evolving and it's only a matter of time before they/we outright refuse to be patronized by the current archaic outbound marketing methods of the 20th century largely pushed over cable television. I look forward to a new model for TV where we can give permission to be 'sold' to and where the product wins because it is better, or it fills a need. Not because of a larger marketing budget.