PwC projects strong growth in data consumption in Canada

05 July 2019 Consulting.ca

PwC’s Global Entertainment and Media outlook projects staggering growth for data consumption, internet access, over the top (OTT) services, and esports, as well as modest growth for cinema, music, and internet advertising.

The industry is expected to grow at a stable CAGR of 3.7% to 2023, which was the same growth rate seen last year.

Data consumption is the highest growth area identified in the consulting firm’s report, with consumption projected to double from 32 trillion MB in 2018 to 77 trillion MB in 2023 – a CAGR of 19.4%. A thriving video-on-demand streaming market will be a driving force in the growth.

Canadians, however, currently consumer consume very little data relative to other developed nations (1.3GB on average), according to research from telecom website Tefficient. This is mostly due to high relative costs for mobile data and plans: analysis from boutique consultancy Rewheel found Canada near the bottom of its global ranking. In 2018, 30 euros purchased a mobile plan with 2GB of 4G data in Canada, compared to 100GB in the UK and unlimited data in Switzerland, Finland, the Netherlands, and other European states.

Canada’s telecom trifecta of Bell, Rogers, and Telus attribute higher costs to requisite high costs of infrastructure across a vast country, but Canada’s atrocious rates are likely an effect of a toothless industry watchdog (the CRTC) which fails to ensure real competition in the telecom market – and fair rates for its citizens.

PwC projects strong growth in data consumption in Canada

The PwC report projects that 5G fixed and mobile internet penetration will increase slightly over the next five years, reaching a CAGR of 7.36%. The next-gen mobile spectrum will enable better streaming of high-quality video for consumers, reducing latency and increasing speed – especially important for live-streamed events and video games.

Over-the-top services (Netflix, Amazon Prime, etc.) will see revenue increase at a 10.7% CAGR in Canada, growing from US$1.6 billion in 2018 to US$2.7 billion in 2023. That growth will put Canada in fourth place, just above the UK at US$2.6 billion.

Canada currently has 25 OTT services, though Netflix dominates the market with a more than 70% share. Canadian broadcasters have adjusted to the new reality, with Bell offering a compelling service (Crave) mostly on the back of the streaming service’s partnership with marquee content providers HBO, Showtime, and Starz. CBC, meanwhile, has put out its own free streaming app, Gem. Rogers’ OTT service, Shomi, shuttered in 2016, after less than two years in operation.

Canadian video games and esports revenue is projected to grow at a strong CAGR of 5.5%, reaching US$2.8 billion in 2023. Canada has a strong video game development industry due to competitive tax incentives. Ubisoft, maker of popular franchises like Assassin’s Creed and FarCry, has a strong presence in Montreal and Toronto. The country is also home to some premier indie developers, including Oakville-based StudioMDHR, which put out the popular Cuphead video game.

Esports is expected to grow from its nascent base of US$19 million to US$37 million 2023. Theatre chain Cineplex recently bought esports platform WorldGaming, and plans to situate a national esports league at its venue. Think of it as somewhat of a modern replacement for the area coin-operated arcade machines used to serve in movie theatres, though many youths watch esports and game streaming with the type of dedication once reserved for MASH or Cheers. 

According to the report, the largest and fastest-growing part of esports revenue is media rights, which will more than double to reach US$11 million in 2023, at a CAGR of 29.3%.


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