Data caps stand in the way of Canadian TV alternatives: analyst report

Canada’s pay television industry has hit a saturation point, but over-the-top services that would give opportunity for growth are being choked by stiff data consumption caps imposed by Internet service providers, according to a new analyst report.

This year marked the peak penetration rate of pay-TV services at 92 per cent of Canadian households, according to IHS Isuppli Corp.’s August 2012 report. Over the next several years, the number of household subscribers will slowly recede to a predicted 89.9 per cent in 2016. Canada’s pay-TV peak comes three years after the same thing occurred in the U.S. – because of severe data caps in place on most Internet service provider subscription plans.

Services like Netflix are competing with traditional pay TV.

Other-the-top (OTT) services including Netflix and Xbox Live are the services competing with traditional television channels like cable and satellite. As more Canadians are tapping into these services over the Internet, cutting the cable will seem more appealing to cut back on household bills. But OTT’s growth will be stemmed because data caps are too easily reached by consumers watching HD video, the IHS report says.

What is more likely to replace cable TV at a faster clip is IPTV options, such as Bell Fibe and Telus Optik. Both have been adding subscribers at a breakneck pace.

Source | iSuppli

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