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Fast ForwardT Trend Analysis

prepared for the CRTC

August 2006

This report may be reproduced, referenced or quoted for research and news purposes provided that any such use identifies this report and includes attribution to Solutions Research Group.
All other rights reserved.

© Solutions Research Group Consultants Inc. 2006

www.srgnet.com

This report is available electronically at www.crtc.gc.ca [.pdf version]

Solutions Research Group Consultants Inc. has prepared the original version of Fast ForwardT Trend Analysis which has been translated by a third party.

Ce document est également disponible en français.

Table of Contents

  • Introduction
  • TREND ANALYSIS
    • Television in Canadian Households
    • Digital Cable and DTH
    • HDTV, DVRs, and Video on Demand
    • PC in Canadian Households
    • Internet Use
    • Personal Digital Products
    • Wireless
    • Internet Activities
    • Entertainment Trending
    • Attitudes Toward Technology
    • Media Use and Share of Time
  • OBSERVATIONS AND IMPLICATIONS
    • The Wired Home and the Rise Of Personal Technology . Digital Cable and DTH . High Definition Television . Digital TV On-Demand - DVRs, VOD . Internet Use . The "New" Broadband . The Generational Chasm and Its Implications
  • APPENDIX I - Comparing Quebec to the Rest of Canada
  • APPENDIX II - Comparing Canada to the U.S.

Introduction

  • Solutions Research Group (SRG) is pleased to present to the Canadian Radio-television and Telecommunications Commission (CRTC) the results of a custom analysis of technology and media trends based on SRG's ongoing Fast ForwardT trend study.
  • The objective of this custom analysis was to create an objective reference document that will form part of the public record, in response to the call for comments on a request by the Governor in Council, pursuant to section 15 of the Broadcasting Act.
  • Accordingly, the analysis shows usage patterns of digital technology information over time along with relevant media and leisure trends - overall and by key subgroups, including Canadians in the influential younger age groups (12-14, 15-19 and 20-29).
  • In addition, the "Observations and Implications" section of this document contains forecasts based on SRG's ongoing work in the technology, media and entertainment sectors in Canada and more recently, in the United States.

About Fast ForwardT

  • Fast ForwardT is Solutions Research Group's ongoing trend research study* that provides insight into the forces shaping the Canadian consumer landscape.
  • As an independent syndicated trend study, Fast ForwardT provides an objective, non-partisan view of the Canadian consumer and marketplace.
  • Available on a subscription basis, the client base for the study includes leading technology, media, cable and telecommunications companies, along with movie and music industry players, and government departments.
  • The centrepiece for Fast ForwardT trend research is an in-depth large-sample telephone survey, based on a high quality random digit dial (RDD) sample. In 2006, the study moves to a two-phase telephone/online hybrid methodology.
  • The Fast ForwardT trend research study database contains over 11,000 in-depth interviews conducted since 1996.

* Prior to 2003, the study was marketed under the brand, "In the Name of Cool".

  • All Fast ForwardT surveys since 1996 were conducted with random, representative cross-section of Canadians in both official languages in all regions of Canada.
  • Consistent oversamples of 12-14 (Tween), 15-19 (Teen) and 20-29 (Young Adult) segments as part of sample design assure appropriate resolution for these influential age groups.
  • Selected data from the study have been featured as part of presentations in conferences including Canadian Music Week (CMW), CAB Convention, Les RenContres, Staying Tuned, CSUA Conference, Understanding Youth and the Canadian Telecom Summit.
Interview Year Sample
Size 		Margin of Error at 95% Level of Confidence
2006* 1,203 ± 2.8
2005 1,776 ± 2.3
2004 1,605 ± 2.5
2003 1,500 ± 2.5
2001** 1,101 ± 2.9
2000 1,415 ± 2.6
1998 1,214 ± 2.8
1996 1,216 ± 2.8

* Phase I Telephone survey sample only
** 2001 was a partial update

Television in Canadian Households

98% of Canadian households have a TV with an average of 2.4 per home; 38% of households have 3 or more TVs.

Number of Televisions in Household

  2003 2004 2005 2006
None 1% 1% 1% 2%
One 28% 27% 28% 28%
Two 36% 36% 33% 32%
Three 21% 22% 22% 20%
Four or More 14% 14% 16% 18%

Base: Total Canada

Note: Respondents indicating "Three" or "Four or More" was 35%, 36%, 38% and 38% for 2003, 2004, 2005 and 2006 respectively.

Households with Tweens or Teens are more likely to have a higher number of TVs.

Average Number of Television Sets in Household by Demographics

  2004 2005 2006
Canada 2.3 2.3 2.4
Male 2.3 2.3 2.4
Female 2.3 2.3 2.3
12-14 3.0 2.9 3.2
15-19 2.7 3.0 3.0
20-29 2.0 2.3 2.3
30-49 2.3 2.3 2.3
50+ 2.2 2.1 2.1

Base: Total Canada

The typical primary television in Canadian households is 6.1 years old; nearly half are 5 years or older.

  • Just over 10% of Canadian households replace their primary TV on an annual basis.

Age of Primary Television in Household

  2004 2005
Less than 2 years old 21% 22%
Between 2 and less than 5 30% 29%
Between 5 and 10 31% 30%
More than 10 17% 17%
Don't know 2% 2%

Base: Households with Television

One-in-four Canadian TV households has a surround-sound system or a stereo hooked up to the television.

Incidence of Stereo or Surround-Sound System - 2005

Stereo/Surround-Sound 25%
TV Speakers 70%
Other 4%
Don't Know 1%

Base: Households with Television

DVD Player ownership continues its meteoric rise; 87% of households now have one, a 39-point increase since 2003.

Ownership of DVD Players

  1998 2000 2003 2004 2005 2006
DVD Player 1% 7% 48% 68% 82% 87%

Base: Total Canada

Digital Cable and DTH Penetration and Services

44% Canadians live in "digital homes" (24% DTH, 20% digital cable) and 43% have analog cable.

  • There are just over 12 million households in Canada in 2006. Forty-four percent (44%) of those are digital.

Type of Cable/DTH Service - 2006

Analog Cable No Cable/DTH Digital Cable DTH
43% 13% 20% 24%

Base: Total Canada

After rapid growth between 2000 and 2004, digital household growth curve is beginning to flatten out.

Growth of Digital Households (DTH and Digital Cable)

  2000 2003 2004 2005 2006
Canada 10% 33% 40% 43% 44%

Base: Total Canada

Interest in digital cable among Analog Cable subscribers declined from 38% in 2003 and 2004 to 32% in 2005.

  • Interest in digital cable among those who do not have it has declined since 2003, suggesting slower conversion in the future.

Interest in Digital Cable

  2003 2004 2005
Very interested 7% 7% 5%
Somewhat interested 31% 31% 27%
Not very interested 22% 26% 24%
Not at all interested 40% 34% 43%
Don't Know   1% 1%

Base: Households with Analog Cable

Note: Respondents indicating "Very interested" or "Somewhat interested" was 38%, 38% and 32% for 2003, 2004 and 2005 respectively

One-in-four households subscribes to a premium movie service available on digital cable or DTH.

Subscription to Premium Pay Movie Services

  2003 2004 2005
Receive premium pay movie services 20% 24% 23%

Base: Total Canada

HDTV, DVRs and Video on Demand

One-in-ten Canadian households has an HDTV set - up from 2% in 2004.

  • HDTV penetration is running behind projections from 2004.

Interest in HDTV

  2004 2005 2006
Own HDTV set already 2% 8% 9%
Very interested 15% 18% 15%
Somewhat interested 37% 30% 27%
Not very interested 21% 22% 23%
Not at all interested 24% 22% 25%
Don't know/depends 1% 1% 1%

Base: Total Canada

6% of Canadian households (just over 700,000) have a DVR in 2006, up from 4% in 2005.

  • In the absence of a strong brand driver such as TiVo in Canada, DVR penetration is running behind that of the U.S. (in 2005, 8% of U.S. households had a DVR vs. 4% Canada).

Ownership of Digital Video Recorders

2005 2006
4% 6%

Base: Total Canada

Interest in DVRs has remained high since 2003 with over 50% of Digital Cable or DTH subscribers interested.

Interest in Digital Video Recorders

  2003 2004 2005
Canada 46% 52% 55%

Base: Households with Digital Cable or DTH service

Interest in DVRs is higher in households with Tweens and Teens. There is little gender difference in interest.

Interest in Digital Video Recorders by Demographics - 2005

  Canada
% 		M
% 		F
% 		12-14
% 		15-19
% 		20-29
% 		30-49
% 		50+
%
Very interested 23 24 21 43 45 24 27 8
Somewhat interested 32 32 32 33 37 35 32 29
Total Interested 55 56 53 76 82 59 59 37

Base: Households with Digital Cable or DTH service

44% of Canadian Digital Cable customers have used VOD (paid or free).

  • 44% of digital cable homes translates to 9% of all Canadian households (just over a million total).

Use of (Paid or Free) VOD Services among Digital Cable Subscribers

2005 2006
36% 44%

Base: Households with Digital Cable

VOD and DVR users say on-demand has significantly increased their levels of enjoyment with television.

Impact of VOD and DVR Use on Viewing Enjoyment in the Home - 2005

  DVR Users VOD Users
Increased a great deal 37% 21%
Increased somewhat 25% 37%
Made little difference 12% 19%
Made no difference at all 26% 23%

Base: Households with Digital Cable who use VOD or DVR

Note: Respondents indicating "Increased a great deal" or "Increased somewhat" was 58% and 62% for "DVR Users" and "VOD Users" respectively

Personal Computers (PC) in Canadian Households

80% of all Canadian households now have a PC.

Households with Home Computers

1996 1998 2000 2003 2004 2005 2006
48% 53% 62% 69% 76% 78% 80%

Base: Total Canada

2+ PC households are growing - now about 32% of all Canadian households.

Number of Home Computers in the Household

  2003 2004 2005 2006
None 31% 24% 22% 20%
One 49% 52% 48% 48%
Two 15% 16% 21% 22%
Three 3% 5% 6% 6%
Four or More 2% 3% 3% 4%

Base: Total Canada

Note: Respondents indicating "Two" or "Three" or "Four or More" was 20%, 24%, 30% and 32% for 2003, 2004, 2005 and 2006 respectively

2+ PC households are most common in households with Tweens and Teens.

Households with Two or More Personal Computers

  2003
% 		2004
% 		2005
% 		2006
%
Canada 21 24 30 32
Male 25 28 34 35
Female 17 20 27 28
12-14 35 35 42 49
15-19 35 44 56 53
20-29 23 26 31 36
30-49 21 28 31 36
50+ 13 12 21 17

Base: Total Canada

Households with Teens and Young Adults are more likely to have newer home computers.

Age of Home Computer in Household by Demographics - 2005

  Canada
% 		M
% 		F
% 		12-14
% 		15-19
% 		20-29
% 		30-49
% 		50+
%
Less than 2 41 43 38 33 49 45 43 34
2 to less than 5 37 37 37 32 40 38 35 39
5 to 10 18 17 20 18 9 14 20 22
Don't Know 4 3 6 18 2 3 2 6
Average Age of PC 3.1 3.0 3.3 3.3 2.6 2.8 3.2 3.5

Base: Canadian home computer households

Internet Use

Internet use more than doubled between 1998 and 2004 - overall incidence of use is now flat in the 70%+ range since 2004.

Overall Internet Use (from any location) in the Last Seven Days

  1996 1998 2000 2003 2004 2005* 2006*
Canada 20% 34% 51% 63% 70% 74% 72%

Base: Total Canada
* 2005-2006 difference is not statistically significant

Almost all Tweens and Teens are weekly Internet users and the "50+" demographic is over the 50% mark.

Overall Internet Use (from any location) in the Last Seven Days by Demographics

  1996
% 		1998
% 		2000
% 		2003
% 		2004
% 		2005
% 		2006
%
Canada 20 34 51 63 70 74 72
Male 25 40 56 65 73 77 74
Female 15 28 46 61 67 71 70
12-14 n.a. n.a. 85 89 95 87 95
15-19 35 57 81 89 93 96 96
20-29 31 51 65 77 83 87 86
30-49 20 32 52 71 76 80 77
50+ 9 20 30 39 48 53 51

Base: Total Canada

In 2006, 64% of Canadians used the Internet from home, 32% from work.

Internet Use in the Last Seven Days

  2000 2003 2004 2005 2006
Internet Use at Home 38% 52% 59% 63% 64%

  

  2000 2003 2004 2005 2006
Internet Use at Work 18% 27% 30% 32% 32%

Base: Total Canada

Home broadband penetration in Canada has broken through the 50% milestone.

  • Of the 12 million households in Canada, just over 6 million (51%) have broadband Internet.

Type of Home Internet Connection

  2003 2004 2005 2006
High speed 31% 40% 49% 51%
Dial-up 20% 19% 13% 12%
No home Internet connection 49% 41% 38% 37%

Base: Total Canada

Personal Digital Products

Ownership of all personal digital content devices has increased since 2003, with digital cameras leading the way in growth.

Ownership of Personal Digital Devices

  2003 2004 2005 2006
Digital Camera 21% 33% 47% 60%
Digital Music Player 11% 16% 19% 27%
Digital Video Camera N/A N/A 25% 27%

Base: Total Canada

Digital camera ownership grew dramatically in 2006 across all age groups.

Ownership of Digital Cameras by Demographics

  2003
% 		2004
% 		2005
% 		2006
%
Canada 21 33 47 60
Male 23 36 51 62
Female 20 30 42 57
12-14 38 44 57 73
15-19 33 45 67 78
20-29 18 39 47 69
30-49 23 36 51 67
50+ 15 23 35 41

Base: Total Canada

Since 2003, digital music player ownership has jumped significantly among Teens and Young Adults.

Ownership of Digital Music Players by Demographics

  2003
% 		2004
% 		2005
% 		2006
%
Canada 11 16 19 27
Male 14 19 22 29
Female 8 14 16 25
12-14 15 25 42 62
15-19 19 30 53 63
20-29 11 24 28 42
30-49 13 19 15 22
50+ 5 6 7 10

Base: Total Canada

In 2006, 44% of households have a video game console, such as Xbox or PS2.

Ownership of Video Game Consoles - 2006

 

Within Age Group

  All Households 12-14 15-19 20-29
Own video game console 44% 82% 72% 61%

Base: Total Canada

Almost one-in-five Canadians (17%) has a laptop computer, up from 10% in 2003.

  • Wireless smartphones and email devices such as BlackBerry or Treo are currently used by 4% of Canadians.

Ownership of Computing Technology

  2003 2004 2005
Laptop Computer 10% 15% 17%
Handheld Wireless E-mail n/a 2% 4%

Base: Total Canada

Laptop ownership continues to rise. Teens and Young Adults are at the 20% mark.

Ownership of Laptop Computers by Demographics

  2003
% 		2004
% 		2005
%
Canada 10 15 17
Male 13 17 19
Female 8 13 15
12-14 10 10 16
15-19 14 18 20
20-29 14 19 21
30-49 10 19 18
50+ 8 9 13

Base: Total Canada

Wireless

Cell phone ownership growth slowed down somewhat, staying steady at 58% among Canadians 12+.

  • 58% of Canadians 12+ have a cell phone. This means there were over 15 million cell phones in use in Canada in 2006.

Ownership of Cell phones - 12+ Canada

2001 2003 2004 2005 2006
41% 50% 56% 58% 58%

Base: Total Canada

Cell phone ownership increased significantly among Teens and Young Adults since 2003.

Ownership of Cellular Phones by Demographics

  2001
% 		2003
% 		2004
% 		2005
% 		2006
%
Canada 41 50 56 58 58
Male 44 53 58 58 61
Female 38 47 54 57 56
12-14 6 26 31 32 37
15-19 30 48 56 58 58
20-29 36 51 62 63 68
30-49 51 59 64 65 65
50+ 37 43 48 50 50

Base: Total Canada

Text messaging is used much more frequently by young Canadians, with 15-29 as the sweet spot.

Use of SMS - 2006

  Canada
% 		M
% 		F
% 		12-14
% 		15-19
% 		20-29
% 		30-49
% 		50+
%
Within last week 21 20 21 29 57 41 14 6
Within last month 6 6 6 16 12 13 5 2
More than a month ago 10 12 8 15 11 17 8 8
Never 63 62 65 38 20 31 73 83

Base: Respondents who currently own a cellular phone

The number of people downloading ringtones has been increasing steadily over the past three years.

Incidence of Downloading Ringtones

  2004 2005 2006
Yes 12% 25% 31%

Base: Respondents who currently own a cellular phone

Tweens and Teens are the most frequent downloaders of ringtones.

Incidence of Downloading Ringtones - 2006

  Canada
% 		M
% 		F
% 		12-14
% 		15-19
% 		20-29
% 		30-49
% 		50+
%
Within last week 5 4 5 14 11 4 2 6
Within last month 6 7 5 18 15 7 6 2
More than a month ago 20 19 21 23 20 29 19 15
Never 68 68 68 44 54 59 73 73

Base: Respondents who currently own a cellular phone

Internet Activities

29% of Canadian Internet Users downloaded music in the last month - 8% downloaded a podcast.

Internet Activities (% of Internet Users in the Last Month)

Downloaded Music   Downloaded Podcast
2000 2003 2004 2005 2006 2005 2006
20% 29% 22% 25% 29% 5% 8%

Base: Total Internet Users, 12+

The incidence of music downloading is higher than average among Tweens and Teens.

Downloaded Music (% of Internet Users in the Last Month) by Demographics

  2000
% 		2003
% 		2004
% 		2005
% 		2006
%
Canada 20 29 22 25 29
Male 27 34 26 29 32
Female 12 24 18 21 26
12-14 32 62 43 52 55
15-19 36 74 63 59 69
20-29 29 40 34 42 42
30-49 15 18 11 16 20
50+ 4 7 6 5 9

Base: Total Internet Users, 12+

Podcast results show some growth since last year.

Downloaded a Podcast (% of Internet Users in the Last Month) by Demographics

  2005
% 		2006
%
Canada 5 8
Male 6 9
Female 4 7
12-14 10 13
15-19 10 14
20-29 9 11
30-49 3 7
50+ 2 2

Base: Total Internet Users, 12+

6 to 8% of Canadian Internet users download large files such as full-length movies or TV shows.

Internet Activities (% of Internet Users in the Last Month)

  2005 2006
Downloaded 30/60 min. TV shows 5% 8%
Downloaded full-length movies 5% 6%

Base: Total Internet Users, 12+

Among Internet users in the 15-29 age group, one-in-six (16%) downloaded a TV show from the Internet.

Downloaded TV Show (% of Internet Users in the Last Month) by Demographics

  2005
% 		2006
%
Canada 5 8
Male 7 10
Female 2 6
12-14 6 9
15-19 10 19
20-29 9 12
30-49 3 6
50+ 2 4

Base: Total Internet Users, 12+

One-in-three Canadian Internet users actively download content - this more than doubles in the 15-19 age group (73%).

Downloaded one of: Music files, Podcasts, TV Shows or a Full-Length Movie in the Last Month - 2006

Total Male Female 12-14 15-19 20-29 30-49 50+
33% 36% 31% 60% 73% 47% 25% 12%

Base: Total Internet Users, 12+

41% of Canadian Internet users watched video online in the last month.

  • Online video is quickly catching on as sites like youtube.com make online video accessible without the need for downloading.

Watched Video Online (% of Internet Users in the Last Month)

  2005 2006
Watched Video Online 0% 41%

Base: Total Internet Users, 12+

One-in-two Internet users use Instant Messaging.

Internet Activities (% of Internet Users in the Last Month)

  2005 2006
Used IM/MSN 50% 48%

Base: Total Internet Users, 12+

Over 80% of those 12-29 use Instant Messaging.

Used Instant Messaging (% of Internet Users in the Last Month) by Demographics

  2005
% 		2006
%
Canada 50 48
Male 46 45
Female 54 50
12-14 80 81
15-19 86 90
20-29 72 71
30-49 41 34
50+ 25 22

Base: Total Internet Users, 12+

Other popular online activities include online banking, streaming and gaming.

Internet Activities (% of Internet Users in the Last Month) - 2005

Online Banking Streamed Music Played Online Game with Others Created Blog
46% 21% 19% 6%

Base: Total Internet Users, 12+

Entertainment Trending

DVD purchases trended up between 2003-2006 and now are flattening out. Rentals are in decline.

Incidence of DVD Purchases and DVD/Video Rentals (Past Six Months)

  2003 2004 2005 2006
DVD Purchases 33% 45% 49% 50%

 

  1996 1998 2000 2003 2004 2005 2006
DVD/Video Rentals 74% 75% 68% 61% 63% 61% 59%

Base: Total Canada. Figure shows incidence (at least one or more) for each purchase.

Movie attendance is down over time - 57% attended a movie in the last six months in 2006 vs. 68% in 1998.

Incidence of Movie Attendance (Past Six Months)

  1998 2000 2003 2004 2005 2006
Movies 68% 62% 61% 60% 58% 57%

Base: Total Canada. Figure shows incidence (at least one or more) for each category.

The slide in book purchases has stopped in 2006.

Incidence of Book Purchases (Past Six Months)

  1998 2000 2003 2004 2005 2006
Book Purchases 70% 64% 62% 61% 61% 64%

Base: Total Canada. Figure shows incidence (at least one or more) for each purchase.

Only 29% of Canadians are active music buyers* in 2006, compared to the peak of 54% in 1998.

Active Music Buyers (AMBs)*

1996 1998 2000 2003 2004 2005 2006
46% 54% 49% 41% 33% 29% 29%

Base: Total Canada
* Active Music Buyers are defined as Canadians who have purchased 4+ CDs in the last six months

Decline in music buying is not limited to a young 'downloader' audience - all ages show a long-term downtrend.

Active Music Buyers (AMBs)* by Demographics

  1996
% 		1998
% 		2000
% 		2003
% 		2004
% 		2005
% 		2006
%
Canada 46 54 49 41 33 29 29
Male 50 59 53 41 32 32 31
Female 42 51 46 41 33 25 28
12-14 n/a n/a 59 31 30 17 25
15-19 71 73 59 37 32 35 33
20-29 58 68 57 43 39 33 38
30-49 50 57 55 46 41 34 32
50+ 46 39 35 36 24 22 22

Base: Total Canada
*AMBs are defined as Canadians who have purchased 4+ CDs in the last six months

Attitudes Toward Technology

Views on technology are polarized: just over half of Canadians - 56% say technology makes life simpler - 29% disagree.

"Technology makes my life simpler" - 2005

  Life Simpler
Strongly agree 25%
Agree 31%
Neutral 14%
Disagree 16%
Strongly Disagree 13%

Note: Respondents indicating "Strongly agree" or "Agree" was 56%

"Technology like email and cell phones gives people more time to do the things they like" - 2005

  More Time
Strongly agree 19%
Agree 31%
Neutral 14%
Disagree 21%
Strongly Disagree 14%

Note: Respondents indicating "Strongly agree" or "Agree" was 50%

Base: Total Canada

Not surprisingly, younger Canadians are much more likely to say that technology makes their lives simpler.

"Technology Makes my Life Simpler"by Demographics

% "strongly agree" and "agree" 2005
%
Canada 56
Male 56
Female 55
12-14 74
15-19 74
20-29 60
30-49 53
50+ 49

Base: Total Canada

There is also polarization on the perceived complexity of new technology.

"I find most new technology too complicated to use" - 2005

  Too Complicated
Strongly agree 18%
Agree 21%
Neutral 12%
Disagree 25%
Strongly Disagree 23%

Base: Total Canada

Note: Respondents indicating "Strongly agree" or "Agree" was 39% and Respondents indicating "Disagree" or "Strongly Disagree" was 48%

Those 50+ are significantly more likely to say most new technology is too complicated to use.

"I Find Most New Technology Too Complicated to Use" by Demographics

% "strongly agree" and "agree" 2005
%
Canada 39
Male 32
Female 46
12-14 20
15-19 23
20-29 32
30-49 41
50+ 48

Base: Total Canada

In 2005, 49% felt downloading songs off the Internet was 'theft' - 28% disagreed.

"Downloading Songs off the Internet Without Authorization or Payment" is Theft

  2004 2005
Strongly agree 18% 16%
Agree 33% 33%
Neutral 18% 20%
Disagree 20% 21%
Strongly Disagree 8% 7%
Don't Know 3% 4%

Base: Total Canada

Note: Respondents indicating "Strongly agree" or "Agree" was 51% and 49% for 2004 and 2005 respectively.

Only a minority of 12-19 year olds agrees that downloading songs off the Internet is theft.

"Downloading Songs off the Internet Without Authorization or Payment" is Theft by Demographics

% "strongly agree" and "agree" 2004
% 		2005
%
Canada 51 49
Male 49 52
Female 53 46
12-14 32 33
15-19 40 38
20-29 47 40
30-49 56 55
50+ 52 50

Base: Total Canada

Media Use and Share of Time

Overall, on a total population 12+ basis, TV, Radio and Internet account for nearly 60% of all time spent.

Distribution of Average Time Spent with Media/Activity - 2006

Watch TV Listen to Music CDs/MP3s Listen Radio Use Internet Read Watch DVD/Video Play Video Game
22% 19% 19% 16% 15% 6% 4%

Base: Total Canada

There are sharp generational differences. Radio/TV account for 49% of time among those 30+ vs. 31% among those 12-29.

Distribution of Average Time Spent with Media/Activity by Age Group - 2006

  Total 12-29 30+
TV 22% 17% 26%
Radio 19% 14% 23%
Reading 15% 13% 17%
Music CDs/MP3s 19% 23% 15%
Internet 16% 20% 14%
DVDs 6% 7% 5%
Video Game 4% 6% 1%

Base: Total Canada

Note: Respondents indicating "TV" or "Radio" was 31% and 49% for the age groups "12-29" and "30+" respectively.

TV accounted for 24% of the media/leisure pie in 2006 overall, down from 26%. It's below the 20% mark in the 12-29 age group.

Distribution of Time Spent Watching TV by Demographics

  2003
% 		2004
% 		2005
% 		2006
%
Canada 26 26 24 24
Male 26 24 23 24
Female 27 27 25 24
12-14 20 19 19 18
15-19 18 16 15 15
20-29 20 19 16 18
30-49 25 24 22 22
50+ 34 34 33 32

Base: Total Canada

Share of time spent with radio among Tweens and Teens is roughly half of time spent by those 30 or older.

Distribution of Time Spent Listening to Radio by Demographics

  2003
% 		2004
% 		2005
% 		2006
%
Canada 24 21 20 21
Male 23 22 21 20
Female 24 21 20 21
12-14 13 13 13 10
15-19 13 13 13 12
20-29 20 20 17 18
30-49 25 24 23 23
50+ 27 23 23 23

Base: Total Canada

Share of Internet is up to 15% from 11% and it's over the 20% mark in younger age groups.

Distribution of Time Spent Using the Internet by Demographics

  2003
% 		2004
% 		2005
% 		2006
%
Canada 11 13 15 15
Male 12 15 16 16
Female 10 12 14 14
12-14 18 19 18 21
15-19 17 20 22 22
20-29 14 17 18 18
30-49 13 15 17 16
50+ 6 8 9 10

Base: Total Canada

Observations and Implications

Unprecedented Increase in Consumer Entertainment & Communications Options

Comparison of Selected Metrics 1998-2006 - Total Canada

  1998 2006
Own a DVD Player 1% 87%
Have PC in the Home 53% 80%
Used the Internet Last Week 34% 72%
Have Broadband In the Home 8% 51%
Have Digital Cable/DTH At Home 5% 44%
Have a Digital Camera - 60%
Used Instant Messaging* - 48%
Watched Online Video* - 41%
Downloaded Any Content off The Internet* - 33%

* Among Internet Users (72% of total population), last month use - Fast ForwardT Trend Study

The Wired Home and the Rise Of Personal Technology

  • The average Canadian household is more 'wired' than at any other time in history. The last 10 years have seen remarkable growth in the penetration of technologies such as PCs, DVD players, broadband and digital television.
  • While it took technologies such as PCs, CD players and VCRs 10 or more years to reach the 50% penetration mark, DVD players and broadband reached the same milestone in much less time (5 and 7 years, respectively). This suggests an accelerated cycle of consumer adoption of new technologies in the past 10 years.
  • In the next 5 years, growth will shift to personal digital technologies driven by broadband connectivity - this portable digital technology category includes digital music and video players, ultra-portable PCs, digital cameras, mobile and smart phones and associated content and services.
  • As momentum shifts to personal digital technologies, the rate of growth will slow for some 'household' technologies such as DTH and Digital Cable.

Digital Cable and DTH

  • Of the different household technologies SRG tracks, Digital Cable/DTH is the most significant example of what we expect to be a slow-growth category in the medium term (2006-2011), in the absence of aggressive industry-wide marketing initiatives.
  • Between 2000 and 2004, the number of households with access to DTH or Digital Cable quadrupled from 10% to 40%. Since then, growth has been relatively slow (40% to 44% between 2004 and 2006). Our research suggests that most of those with the greatest interest in the benefits of digital television have already switched.
  • SRG is projecting a ceiling of 58-60% penetration of Canadian households for Digital Cable and DTH combined by 2011.

High Definition Television

  • HDTV growth levels in Canada have underperformed against our expectations in the past two years, primarily due to three factors:
  1. persistently high price points, until just recently;
  2. consumer confusion around features and benefits of HD including lack of programming; and
  3. lack of clear and consistent messaging by consumer electronics and TV industries.
  • According to Fast ForwardT Trend Analysis, one-in-ten Canadian households (or just over 1.2 million households) now have an HD-capable set. Other studies have suggested penetration rates that are slightly higher, in the 14-15% range.
  • The typical primary TV set in the Canadian household is about 6 years old - and just under one-in-ten primary TVs are replaced annually in Canada. We anticipate that 40-45% of primary TVs in Canadian households will be HD-capable by 2011. It is important to remember, however, that this number does not include secondary HD displays such as new PC and laptop screens that are capable of displaying HD content.

Digital TV On-Demand - DVRs, VOD

  • There is no question that the ultimate future of television is on-demand - the question is whether on-demand TV behaviour in Canadian households will most likely be experienced via a set-top DVR, cable video on demand or on a PC or screen connected to the broadband Internet.
  • DVR penetration in Canada in 2006 is now 6% of all households (just over 700,000 households), up from 4% in 2005. The growth of DVRs in Canada lags behind consumer interest in the general concept which suggests that there are price and awareness barriers.
  • In the absence of a super-brand such as TiVo in the Canadian marketplace or aggressive deployment by distributors, growth will likely continue to be slower than what's been observed in the United States.
  • In terms of VOD, Fast ForwardT Trend Analysis finds that about 9% of Canadian households (44% of digital cable households) have used Video On Demand in 2006 at least once at some point in the past.
  • The universe of 'on-demand' TV households (use either a DVR or VOD) in Canada is 12% in 2006.
  • We anticipate on-demand use via the cable or DTH platform (e.g., DVR or VOD) to increase in the next 5 years to the 30% range of all Canadian households. This represents a gradual year-over-year build-up, not the kind of explosive growth we have seen in DVD penetration or Internet use in the last 5-6 years.

Internet Use

  • After doubling between 1998 and 2006, Internet use (from any location) is now stable in the mid-70 per cent level of Canadians on a weekly basis. Practically all of the 12-29 age group and almost 80% of those 30-49 use the Internet. Among those aged 50 or older, weekly use is just over the 50% mark.
  • We have seen significant growth in the last four years in home use of Internet, and in particular, the transition from dial-up to broadband. In 2003, 31% of Canadian households had broadband access - in 2006, this figure has increased to 51%.
  • In the last year, however, Fast ForwardT Trend Analysis shows a slow-down in broadband conversion - from 49% of Canadian households in 2005 to 51% in 2006. Most young single/couple and family households with children under 18 in urban centres already have broadband in the home but many single households, rural households with empty nesters, or older Canadians do not.
  • Given Canada's aging population, we expect broadband penetration to stabilize at 70% of all households in the next 5 years, compared to 51% today. A sizeable proportion of older, and non-urban Canadians will likely remain unconnected, at least from their homes.

The "New" Broadband

  • One of our key observations in the last two years relates to the changing nature of Internet use.
  • First, more Canadians spend more time using the Internet. Average time spent per day per capita increased from 1.1 hours to 1.5 hours in the past 3 years.
  • Second, as broadband becomes more prevalent and broadband speeds increase, Internet is morphing from a communications utility or tool to a full-blown converged entertainment/communications medium. On-demand online audio and video is much more accessible today than it was a few years ago.
  • The "old" Internet was about searching, browsing and 'downloading.'
  • The "new" broadband is more about seamless on-demand access to audio and video without any special knowledge of sites, file-sharing protocols or software.
  • Greater accessibility of content will increase the size of the entertainment audience on the Internet. There is already evidence in this direction as popularity of online streaming content surpasses that of content 'downloads.'
    • 33% of Canadian Internet users had downloaded content of any kind (music, podcasts, TV or movies) from peer-to-peer or legal sources in the last month.
    • Even though online video is a much more recent phenomenon, a larger proportion, 41%, watched online streaming video from sites such as youtube.com as well as major portals and media company sites in the same period.

The Generational Chasm and Its Implications

  • A persistent theme in our Fast ForwardT research is the difference in the attitudes and behaviour of the 12-29 age group compared to those over the age of 30 in terms of media and technology. And we believe this chasm between generations is wider today than at any other time in the past.
  • The 12-29 generation is 'always on':
      -  75% use Instant Messaging vs. only 28% of 30+
      -  70% with wireless use SMS vs. 25% of 30+
  • They are the new broadband generation: deeply engaged with the Internet - some say they 'live on the Internet' - downloading, surfing, consuming and creating content at rates much greater than older generations.
  • They are more likely to be replacing traditional with new: 31% of their media/leisure time is spent with TV/radio compared to 50% among those 30+.
  • One implication of this generational chasm is that traditional assumptions about media use do not necessarily apply to younger generations. On-demand is now a consumer expectation and a frame of reference among younger Canadians. We believe that they will carry those 'on-demand' expectations as they come of age and it will impact the choices they make in consuming media.
  • At the same time as younger generations are shifting their behaviour, there has been little change in the media habits of older Canadians, 30+. Our tracking is consistent with other research and indicates that the amount of time dedicated to television or radio has largely remained at consistent levels in the past 10 years in older age groups notwithstanding increasing time spent with the Internet.
  • Given the large size of the boomer population in Canada today, this suggests traditional 'linear' media (generally choice of older generations) will continue to co-exist with 'on-demand' media (choice of younger generations) in the medium term. It will take some time - about 10 years - before today's young generation exerts its full influence as the dominant segment in the Canadian consumer landscape.

APPENDIX I
Quebec vs. Rest of Canada Comparison

Introduction to Appendix I

  • This section provides a brief analysis of the differences between Quebec and the Rest of Canada (ROC) in terms of technology and media trends.
  • The data comes from interviews conducted in Quebec over the years as part of the Fast ForwardT trend study.
  • In each year of the research, Quebec was represented in proportion to its population share in Canada.
  • About 95% of all interviews in Quebec were conducted in French since 1996.

Quebec is slightly behind the rest of Canada in digital TV penetration.

Digital Households (DTH and Digital Cable)

  2005 2006
ROC 44% 45%
Quebec 39% 41%

Base: Households with Digital Cable or DTH service

Ownership of and interest in HDTV technology is higher outside of Quebec.

Ownership of and Interest in HDTV - 2006

  Quebec ROC Canada
Own HDTV set already 4% 10% 9%
Very interested 15% 15% 15%
Somewhat interested 23% 29% 27%
Not very interested 26% 23% 23%
Not at all interested 31% 23% 25%
Don't know/depends 2% - 1%

Base: Total Canada

Interest in DVRs is higher outside of Quebec.

Interest in Digital Video Recorder

  2004 2005
ROC 58% 60%
Quebec 32% 38%

Base: Households with Digital Cable or DTH service

Internet use has historically been somewhat lower in Quebec versus rest of Canada.

Overall Internet Use (from any location) in the Last Seven Days

  1996 1998 2000 2003 2004 2005 2006
ROC 21% 34% 56% 66% 72% 75% 74%
Quebec 15% 31% 36% 53% 63% 70% 65%

Base: Total Canada

Ownership of personal digital content devices is lower in Quebec than elsewhere in Canada.

Ownership of Personal Digital Devices

Digital Camera 2003 2004 2005 2006
ROC 23% 36% 49% 64%
Quebec 14% 25% 37% 44%

 

Digital Music Player 2003 2004 2005 2006
ROC 11% 17% 19% 28%
Quebec 10% 14% 19% 24%

Base: Total Canada

Cell phone ownership in Quebec has remained roughly 15-points below the rest of Canada.

Ownership of Cell phones - 12+ Canada

  2001 2003 2004 2005 2006
ROC 44% 51% 59% 61% 62%
Quebec 32% 45% 46% 47% 46%

Base: Total Canada

There is only a small gap in music and podcast downloads between Quebec and rest of Canada.

Internet Activities (% of Internet Users in the Last Month)

Downloaded Music 2005
ROC 26%
Quebec 22%

 

Downloaded Podcast 2005
ROC 5%
Quebec 3%

Base: Total Internet Users, 12+

Residents of Quebec are more ambivalent toward technology.

"Technology makes my life simpler" - 2005

  Canada Quebec ROC
Strongly agree 25% 26% 24%
Agree 31% 17% 36%
Neutral 14% 16% 14%
Disagree 16% 20% 15%
Strongly Disagree 13% 20% 11%

Base: Total Canada

Note: Respondents indicating "Strongly agree" or "Agree" was 43% and 60% for Quebec and ROC respectively.

Quebecers are much more likely to view downloading songs without authorization or payment as 'theft.'

"Downloading Songs off the Internet Without Authorization or Payment" is Theft - 2005

  Canada Quebec ROC
Strongly agree 16% 30% 11%
Agree 33% 35% 32%
Neutral 20% 10% 23%
Disagree 21% 16% 23%
Strongly Disagree 7% 8% 6%
Don't Know 4% 2% 5%

Base: Total Canada

Note: Respondents indicating "Strongly agree" or "Agree" was 65% and 43% for Quebec and ROC respectively.

Time spent with media is not significantly different except radio has a slightly higher share and Internet slightly less.

Distribution of Time Spent with Media by Demographics - 2006

  Canada
% 		ROC
% 		Quebec
%
Watching TV 24 24 24
Watching DVD/Videos 5 5 6
Listening to radio 21 20 23
Listening to music CDs 17 18 16
Reading . 16 16 17
Using the Internet 15 15 13
Playing video games 2 2 2
Total Daily Hours 100 100 100

Base: Total Canada

APPENDIX II
Canada vs. U.S. Comparison

Introduction to Appendix II

  • This section provides a brief analysis of the differences between the U.S. and Canada in terms of key technology penetration.
  • The reference year for the data is 2005.
  • Except where noted, the Canadian data comes from the Fast ForwardT trend study. The U.S. data comes from Solutions Research Group's Digital Life America trend study launched in 2005, based on 1,062 interviews with Americans 12+.

Median Income

Comparison of Median Incomes for U.S. and Canada for 2001 (in U.S. dollars)

U.S. $44,389
Canada $38,951

Source: U.S. Census Bureau & Statistics Canada - 2001

Attitudes Towards Technology

  • Americans are more enthusiastic toward technology attitudinally.

"Technology makes my life simpler" - 2005

  U.S. Canada
Strongly agree 37% 25%
Agree 34% 31%
Neutral 10% 15%
Disagree 10% 16%
Strongly Disagree 8% 13%

Base: U.S./Canada population 12+

Note: Respondents indicating "Strongly agree" or "Agree" was 71% and 56% for U.S. and Canada respectively.

Ownership of Household and Personal Technologies

  • Americans lead in wireless and adoption of bigger-ticket item household entertainment and TV-related technologies. Canada leads in MP3/Digital Music Player adoption.

Ownership of Cell Phones, Digital Cable/DTH, HDTV, DVRs, and Digital Music Players - 2005

  Cell Phone Digital Cable/DTH HDTV DVR Digital Music Player
U.S. 63% 52% 14% 8% 12%
Canada 58% 43% 8% 4% 19%

Base: U.S./Canada population 12+

Internet Use in the Last Seven Days

  • Canada is in a slight lead position in terms of Internet use. In terms of broadband penetration, in 2005, Canada was ahead of the U.S. (49% vs. 34% of total households).

Internet Use in the Last Seven Days - 2005

  Any Location Home Work
U.S. 68% 57% 29%
Canada 74% 63% 32%

Base: U.S./Canada population 12+

Date Modified: 2006-10-03

 

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