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4.0 Broadcasting

4.5 New media

Broadcasting in new media involves the migration of digital broadcasting content to mobile and Internet distribution platforms. These platforms are providing Canadians with new programming experiences ranging from services resembling that of television and radio to new, highly interactive services or programs offering greater consumer control and choice.

This section examines this migration as well as the resultant consumer behaviour. It also looks at certain technologies as they relate to Canada's broadcasting and telecommunications sectors. As this is a growing and evolving industry, data contained in this section was gathered primarily from contracted research and publicly available data rather than industry questionnaires. One of the primary data sources was the Media Technology Monitor (MTM) 2008 survey, which examined the media habits and technology usage of 12,000 Canadians, eighteen years and older.

The Commission intends to monitor new media broadcasting through various means. The intent is to arrive at a recurring set of data which can be collected each year in order to present a picture of the new media broadcasting industry in Canada.

As over 95% of households can have access to fixed broadband and over 91% of households can also have access to mobile broadband,²¹⁹ Canadians are increasingly demanding access to content, whether audio, video, or data. Spurring this development is the availability of multi-function consumer devices. New media services are generally in the innovation, emerging or expanding stage of the product life cycle, as defined in the figure below.

One indicator for the importance of new media and its role in the lives of Canadians is the level of technology adoption by Canadians. Legacy technologies which have been in use for a decade or more, such as VCR players and portable radios, demonstrate near-ubiquity in Canadian households. However, there are many new devices which allow users to more fully utilize new media broadcasting offerings, and the adoption rate of these devices and services is a good indicator of the usage of these new platforms.

Figure 4.5.1 Cycle of consumer adoption/Product life cycle

Source: MTM 2008

New Media and the Internet

The general Internet usage trends continue to indicate that Canadians are accessing and using the Internet not only for entertainment, but for day-to-day activities and research. Over a two-year period ending February 2009, comScore reported that the total number of Internet users audience in Canada has grown by about 5%, and that their total time spent online monthly had grown by nearly 9%, although the latter figure declined slightly in 2008.

Table 4.5.1 Website visits by Canadian unique visitors

	Unique Visitors (thousands)			Growth Feb 07-Feb 09	Total Minutes (millions)			Growth Feb 07-Feb 09
	Feb 07	Feb 08	Feb 09	%	Feb 07	Feb 08	Feb 09	%
Total Internet	22,823	23,814	24,143	5.8%	57,524	63,578	62,544	8.7%

Source: ComScore MediaMetrix

Internet usage in Canada continues to grow and change. For example, for the five-year period 2003 to 2008, the annual growth of Internet usage for Canadians aged 50+was approximately 8% for Anglophones, increasing from 48% in 2003 to 70% in 2008, and 10% for Francophones, increasing from 34% in 2003 to 56% in 2008. In both cases, this was approximately twice the annual growth rate for all Canadians.

Table 4.5.2 Canadian Internet usage by linguistic group

	2003		2005		2007		2008
	Anglo	Franco	Anglo	Franco	Anglo	Franco	Anglo	Franco
Overall Usage	68%	58%	77%	65%	81%	71%	83%	75%
18-34	84%	79%	91%	86%	95%	91%	95%	93%
35-49	78%	66%	84%	76%	89%	84%	91%	86%
50+	48%	34%	60%	43%	66%	51%	70%	56%

Source: MTM 2008 (Respondents: All)
Note: Usage in past month

Section 5.3 of this report indicates that the penetration of broadband Internet access in residential homes continues to grow year over year. Broadband services are described as services that are above 1.5 Mbps and have become increasingly popular due to their greater availability as well as the general increase in activities being pursued on the Internet. Figure 4.5.2 illustrates the various bandwidth requirements for activities such as music, video, and high definition (HD) video downloads. These activities require increasingly greater broadband speeds.

Figure 4.5.2 Internet applications - bandwidth requirements

Source: CRTC

Data presented in Section 5.3 indicates that approximately 55% of Canadian Internet subscribers have a residential Internet connection which is 5 Mbps or greater and allows users to access most new media broadcasting services with relative ease. When asked by MTM about activities related to their usage of the Internet, users indicated high usage of services such as online video and instant messaging, as shown in the following figure.

Figure 4.5.3 Popular Internet activities for Canadian Internet users

Along with the growth of usage of the Internet for an increasing amount of activities, there has been a noticeable growth in the amount of time that people spend online. Weekly time spent using the Internet by Canadians has nearly tripled since 1997 for Anglophones and Francophones.

Table 4.5.3 Average weekly hours spent online by Canadian Internet users

	1997	1999	2002	2005	2007	2008
Anglophone	4.8	5.6	9.3	11.7	13.4	13.8
Francophones	4.1	6.3	7.7	9.1	9.8	11.1

Source: MTM 2008 (Respondents: Internet Users)

Video usage and new media

As they adopt new technology platforms, Canadians are being given a growing number of means by which to consume video content. Each of these new video technologies saw a growth in usage from 2007 to 2008, while usage of legacy technologies remained constant or declined.

Figure 4.5.4 Video technology penetration in Canada

The increase in online video sources is resulting in more Canadians using the Internet to seek out video content. Overall video consumption online has more than doubled over the past 3 years. Amateur, or user-generated content, is currently more popular than professionally produced television content. However, among Anglophones, the viewing of amateur content remained constant from 2007 to 2008, whereas online television content grew in popularity. Among Francophones, both kinds of programming saw increases.

Figure 4.5.5 Internet video viewing, by Canadians

Figure 4.5.6 Internet video viewing, by Canadians by type

Figure 4.5.7 Penetration of Internet TV viewers, by selected demographic groups

Video on mobile devices

Viewing of video over cell phones has shown slow growth thus far. Services being offered by the large national carriers are still in their infancy and not all handsets are capable of displaying video content. MTM reported that, in 2008, 18% of Anglophone Canadians and 13% of Francophone Canadians owned a video enabled cell phone. Only 5% of Anglophones and 2% of Francophones had viewed video on their cell phones in the past month, although this did represent an increase from 2% and 1%, respectively. All this translates to less than 1% of Canadians having watched television programming on their handsets in the past month.

Video MP3 players, such as the iPod, are also not being used extensively as video viewing platforms. In 2008, 14% of Anglophone Canadians and 10% of Francophone Canadians owned a video-enabled MP3 player, up from 9% and 6%, respectively, in 2007. However, the percentage of these people watching video on this platform in the past month remained steady at 3% and 2%, respectively. As with cell phones, only 1% of all Canadians viewed television/video content on video-enabled MP3 players.

The table below summarizes the trends for several video viewing platforms, and their relative growth over the 2005 to 2007 period.

Table 4.5.4 Adoption and growth rates of various video technologies in Canada

	Adoption				Growth
	2005	2006	2007	2008	2006	2007	2008
PVR
Anglophones	4%	6%	10%	13%	50%	67%	30%
Francophones	2%	4%	6%	10%	100%	50%	67%
Watch Video on Demand*
Anglophones	5%	6%	7%	9%	20%	17%	29%
Francophones	4%	7%	11%	12%	75%	57%	9%
Watch Internet Video*
Anglophones	21%	30%	38%	42%	43%	27%	11%
Francophones	16%	26%	31%	37%	63%	19%	19%
Watch Video on Cellphone*
Anglophones	-	-	2%	5%	-	-	150%
Francophones	-	-	1%	2%	-	-	100%

Source: MTM 2008 (Respondents: All)
Note: *Past month use

Audio usage and new media

Online services and technologies are also having an impact on how Canadians consume and use audio services. New media has given users more options in accessing audio and popular sources of music which now include activities such as downloading, streaming radio over the Internet and listening to podcasts (pre-recorded audio programs) for use on portable music devices. However, while some newer technologies, particularly music downloads and streamed radio, have begun to stagnate or decline in popularity in recent years, conventional radio has retained its strength. Podcasts is one newer form of audio still showing consistent growth. The following charts illustrate the trends over the past few years for Canadians adopting and using these technologies.

Figure 4.5.8 Audio technology penetration in Canada

Figure 4.5.9 Podcast usage in Canada

Source: MTM 2008 (Respondents: All)

While listening to audio podcasts is an activity which has shown high growth over the past three years, MTM reports that both downloading music and streaming radio over the Internet have shown a steady decline in popularity among Anglophones, and appear to have stagnated among Francophones. MTM infers copyright issues as a probable cause for this lack of growth in downloading music in recent years.

Figure 4.5.10 Downloading music in Canada

Figure 4.5.11 Streaming radio in Canada

Note: In this graph streaming radio is the proportion of Canadians that stream AM/FM radio stations.

Table 4.5.5 Adoption and growth rates of various audio technologies in Canada

	Adoption				Growth
	2005	2006	2007	2008	2006	2007	2008
MP3 player ownership
Anglophones	23%	29%	34%	39%	26%	17%	15%
Francophones	14%	19%	24%	30%	36%	26%	25%
Podcast listening*
Anglophones	7%	8%	13%	19%	14%	63%	46%
Francophones	3%	4%	5%	7%	33%	25%	40%
Music downloading
Anglophones	20%	20%	18%	16%	0%	-10%	-11%
Francophones	12%	12%	13%	12%	0%	8%	-8%
Streaming radio
Anglophones	23%	19%	18%	16%	-17%	-5%	-11%
Francophones	16%	14%	12%	13%	-13%	-14%	8%

Source: MTM 2007 and 2008 (Respondents: All)
Note: *Past month use

Traditional radio broadcasters are also evolving to include new media offerings as part of their business, such as making traditional radio broadcasts available online as either streaming services, or downloadable podcasts. However, while Anglophones in particular have displayed an increased interest in podcasts, showing a growth rate of 46% over the past year, and 170% since 2005, AM/FM broadcasting represents a declining source of audio material for consumers who are Internet-centric in their media consumption. The following charts illustrate the popularity of AM/FM broadcasters as a source for audio content when available as streaming audio and downloaded podcasts.

Figure 4.5.12 AM/FM broadcasters as a source of audio material in streaming audio and downloaded podcasts

Audience participation in new media

The preceding sections focused on Canadians' adoption and use of various technologies and services being offered that are related to new media generally and new media broadcasting specifically. The adoption of technologies is an important consideration as is their usage. However, traditional media, such as television and radio, are frequently reported in terms of hours of usage in a typical week. Data collection is carried out through well established systems such as meters and/or diary collection. While these methods are well understood and accepted as industry standards, systems are not in place to capture all other media usage in a similar fashion. As such, the MTM uses survey data to estimate the relative amount of time Canadians devote to media on traditional and new platforms. Self-reported estimates of media use, such as those used in surveys, tend to underestimate use and are not directly comparable to the ratings data that is the official currency for TV and radio.

Table 4.5.6 Time spent by Canadian adopters using various technologies

	Hours per week
	2007	2008
Internet Usage*
Anglophones	13.4	13.8
Francophones	9.8	11.1
Online TV Viewing
Anglophones	2.1	1.5
Francophones	1.3	1.2
Streaming Online Audio
Anglophones	6.0	5.3
Francophones	5.7	5.4
Streaming Online AM/FM Radio
Anglophones	4.8	4.2
Francophones	5.3	4.6
Podcasting
Anglophones	2.2	2.2
Francophones	2.6	2.5
Listening to Audio on iPod/MP3*
Anglophones	6.7	7.1
Francophones	5.7	5.6
Satellite Radio Listening*
Anglophones	11.0	9.7
Francophones	11.0	10.7

Source: MTM 2007 and 2008 (Respondents: typical week users of each listed technology)
* Past month users

The MTM survey also compares the amount of time Canadians spent using new media platforms to their use of traditional platforms. For example, it examines whether users of Internet video watch more or less traditional television than those who do not use Internet video, as well as the relationship between the amount of time spent on various new audio services and the listenership of traditional radio broadcasts.

Results from the MTM survey indicate that users of Internet TV tend to consume less television content than those who do not use Internet TV.

Figure 4.5.13 Time spent watching TV - Average viewing hours of all Canadians as compared to those who report watching TV over the Internet

Contrary to the trend for television content, the following chart indicates that users of some alternative platforms for audio content delivery tend to consume more, not less, content from traditional providers. While both Anglophone and Francophone audio streamers do listen to less AM/FM radio on a conventional radio receiver than the average Canadian, when new media platforms are factored in, both linguistic groups listen to at least one more hour of AM/FM radio per week than the national average. This phenomenon does not hold true for podcast listeners, whose reduced hours of radio consumption on conventional receivers are only partially offset by other sources of AM/FM radio.

Figure 4.5.14 Average hours Canadians spend listening to radio - Comparing average Canadian listening hours to those using the Internet to stream audio or listen to podcasts

Economic indicators of new media

New media has caused changes apart from shifts in audience involvement and time spent on other media platforms. Advertising trends and dollars have also shifted over the past several years.

Of particular interest are revenues from advertising on the Internet. The Interactive Advertising Bureau of Canada (IAB) reports online advertising revenues through information gathered directly from the marketing and advertising community in Canada and it separates the results by key categories.

Figure 4.5.15 Canadian online advertising revenues

Source: IAB Canada
Note: 2008 figures not available at time of printing

The IAB has also begun compiling data on mobile advertising revenues, as illustrated below. Mobile advertising is still at a nascent stage, as evidenced by the total $2.7 million of revenue in the sector, compared to the $1.2 billion in online advertising revenue.

Figure 4.5.16 Canadian mobile advertising revenues

A further aspect of new media is the external investments made into new media content development. There are numerous funds available to assist in the development of digital content in Canada. The table below lists some of these funds and their respective contributions to the new media industry in Canada. Producers use these funds for a wide variety of new media projects ranging from online video content, to website development to children's interactive game development, among others.

Table 4.5.7 Various Canadian new media development funds ($ millions)

Fund Name	2005	2006	2007	2008
Bell Broadcast and New Media Fund1	4.1	5.6	8.3	8.4
Telefilm Canada’s Canada New Media Fund2	14.1	9.6	14.5	14.5
OMDC Interactive Digital Media Fund3			0.9
Canadian Film Centre’s Telus Innovation Fund4		0.3	0.3	0.3
Quebecor Funds5			3.5	4.6
Total Contribution	18.2	15.5	27.5	27.8

Notes:

1. Represents production of Interactive Digital Media projects
2. Represents Product Assistance Grants (Reporting years run April - March)
3. Funding limited to 2007-08. In the 2008-09 fiscal year, the Fund was re-designed and a later program cycle meant that no funding applications were received during the fiscal year. The $1.8 million budgeted for the Fund in 2008-09 will be carried over into the 2009-10 fiscal year.
4. Funding offered for three projects at $100,000 each per year
5. Estimate only for 2007

Source: Fund usage reports from each group