Few Canadians Willing to Pay as News Content Shifts Online

Almost half say they do not visit any news sources that charge for online access.

Vancouver, BC [August 2, 2018] – Canadians have not embraced the concept of paying for news and information online, a new Research Co. poll has found.

In the online survey of a representative national sample, only 9% of Canadians say they are currently paying subscribers of at least one online news source that they find interesting—a proportion that rises to 14% among those aged 18-to-34.

Three-in-ten Canadians (31%) say they stop going to an online news source if there’s a limit on free articles and/or a paywall—including 39% of those aged 35-to-54.

“Content is increasingly moving online, but almost half of Canadians (47%) are not paying for any of it right now,” says Mario Canseco, President at Research Co. “Those over the age of 55 are more likely to say they do not visit any news sources that charge for online access (56%) than those aged 18-to-34 (41%) and those aged 35-to-54 (41%).”

More than half of Ontarians (52%) say they do not visit any news sources that charge for online access. The proportion of non-subscribers drops to 49% in British Columbia, 47% in Alberta, 46% in Manitoba and Saskatchewan, 44% in Atlantic Canada and 36% in Quebec.

Only 13% of Canadians say they get news and information from a hard copy of a local newspaper on a daily basis, and fewer access a hard copy of a national paper (9%) or a hard copy of a magazine (5%).

When it comes to radio and television, 41% of Canadians say they get their news and information from local television newscasts and news channels. A slightly smaller proportion (37%) watch national television newscasts and news channels every day. One-in-five (26%) listen to local radio newscasts daily, and 11% listen to national radio newscasts every day.

Almost a third of Canadians (32%) say they get news and information from Facebook on a daily basis. This is a substantially higher proportion than other sources, including websites from television news providers (20%), Twitter (18%), websites from national and local newspapers (14% each), websites from independent online news providers (8%), websites from radio stations (7%), websites of magazines (6%) and blogs (also 6%).

More than half of Canadians (56%) support the federal government’s proposal to invest $50 million over five years to support independent, non-governmental organizations that are expected to focus on delivering local journalism in communities.

Majorities of Canadians who voted for the New Democratic Party (NDP) (65%), the Liberal Party (61%) and the Conservative Party (52%) in the 2015 federal election endorse the proposal.

Methodology:
Results are based on an online study conducted from May 7 to May 11, 2018, among 1,000 adults in Canada. The data has been statistically weighted according to Canadian census figures for age, gender and region. The margin of error—which measures sample variability—is +/- 3.1 percentage points, nineteen times out of twenty.

Find our full data set here and download the press release here. 

For more information on this poll, please contact:
Mario Canseco, President, Research Co.
[c] 778.929.0490
[e] mario.canseco@researchco.ca

Credit: Liis Saar

The new Mexican president will be defined by two major challenges

Originally published in the Globe and Mail on July 3, 2018.

The victory of Andres Manuel Lopez Obrador in the Mexican presidential election is nothing short of historic. A political party that did not exist six years ago – the National Regeneration Movement or “Morena” – is poised to control the presidency and the national Congress, with the help of its coalition partners.

As the counting of ballots continues across Mexico, it appears that Mr. Lopez Obrador, or AMLO as most call him, will receive more than 50 per cent of the vote in the presidential race – a feat that eluded Vicente Fox in the so-called “change election” of 2000, which ended seven decades of single-party rule in the country.

This year, supporters of the defeated presidential candidates spent the last two weeks of the campaign arguing for an unsanctioned vote-swap that would propel either of them to victory. Talk of implementing a run-off in Mexican presidential elections has vanished, given the advantage that AMLO has over his rivals.

The primary focus of his campaign was to eradicate corruption. Many Mexicans have grown tired of jumping through endless bureaucratic hoops, and paying bribes along the way, so that the government can deliver the simplest of tasks.

Corruption, however, is not limited to government employees at service counters. The sight of eight different former state governors facing charges of embezzlement helped AMLO paint a picture of a Mexico where the well-connected thrive and the hard-working suffer. All eight governors were once members of the only two parties that have run the federal government.

In the end, Mr. Lopez Obrador capitalized on emotion in a way the other contenders could not match. He became a charismatic option who could point to the many misdeeds of past governments. The two other main presidential contenders were unable to defend themselves.

The youth vote – crucial in a country where 46 per cent of the electorate has not yet turned 35 – was particularly uninterested in which candidate had more experience or better credentials. AMLO outlined a country that was far more attractive than the CVs and university degrees of his rivals.

As proud as Mexicans should feel about their electoral process, there is a shameful reality that cannot be overlooked: violence. More than 130 candidates were killed in the nine months prior to election day. Since 2000, more than 100 journalists have brutally lost their lives.

Last year, drug-related violence claimed the lives of more than 29,000 people in Mexico. Retrieving the feeling of safety that Mexicans used to enjoy is directly related to AMLO’s key pledge: rooting out corruption.

During the campaign, Mr. Lopez Obrador suggested that Mexico should consider a form of amnesty for drug-related offences. This idea, which has not been satisfactorily explained, has befuddled Mexicans. After all, what the country is dealing with is not the aftermath of a state-sponsored campaign of terrorizing opponents for political gain, like in Chile, Argentina or South Africa. Just who, or what, will be forgiven is unclear.

The second challenge for the incoming Mexican president is handling the country’s finances. In February, as he was leading in voting-intention polls, AMLO asked to be part of the negotiating team that was discussing the future of the North American free-trade agreement with Canadian and U.S. officials.

It was unthinkable for the Mexican government to offer a seat to an opposition candidate, or his staff, at that particular point. Mr. Lopez Obrador’s cabinet will face a steep learning curve, which will be made even more difficult by the fact that they will be dealing with U.S. President Donald Trump.

Mr. Lopez Obrador is scheduled to take office on Dec. 1, just a few weeks after the midterm elections in the United States. He may encounter a weakened Mr. Trump if there are significant losses in Congress for the Republican Party. He will also deal with a Canadian federal government that may be in precampaign mode when bilateral discussions ensue.

The initial six months of the first purely leftist government in Mexico will require action on these two fronts. If the fight against corruption is not accompanied by tighter controls on the drug trade and a drop in violence, goodwill for the government will erode among voters. If the economy starts to tumble and the prospect of a devalued currency affects public mood, it will not be enough to argue that the country is “cleaner” than it was under previous administrations.

Credit: Diego Delso

TV grapples with Netflix effect as more consumers cut cable ties

Originally published in Business in Vancouver on May 18, 2018.

At the end of the 2016-17 television season, The Big Bang Theory was the most popular television show in the United States, with a rating of 11.5.

This means that, whenever a new episode of the comedy show aired live, an estimated 11.5% of all television households in the country were watching it on their local station.

This might seem like a fantastic number for television producers, but it outlines a steady decline in traditional viewership.

Ten years earlier, in 2006-07, the most popular television show in the United States was the Wednesday edition of  American Idol, with a rating of 17.3. If we go back to 1996-97, ER topped the charts with a rating of 21.2. Ten years earlier, in 1986-87, the most popular television program in the United States was The Cosby Show, with a rating of 34.9.

At the time The Cosby Show managed to get more than a third of television households to tune in to NBC, a show with an 11.5 rating would not have made it into thetop 40. Its producers would have faced a reboot or cancellation. Now, reaching more than 10% of television households in a given night is cause for celebration.

The steep drop in live television viewership has been accompanied by advancements in technology. Personal video recorders and streaming video were still in their infancy in 1997, but became more prevalent 10 years later and are practically everywhere now. It is the ability to choose content that is making North American audiences abandon the tradition of waiting a week (or longer) for their favourite program.

Canada is not immune.

Most of the content Canadians can watch on prime time is shown on American networks and makes its way to our homes through cable television. A recent Research Co. survey shows that age and region play a role in the way we are reacting to the content that is at our disposal.

For starters, a third of Canadians (33%) have cut the cord and do not have cable television at home. More than seven in 10 Canadians aged 35 and over are keeping their cable, but millennials – a coveted group for advertisers – are looking elsewhere. Only 54% of Canadians aged 18 to 34 have a cable subscription.

This discrepancy presents a conundrum for advertisers, marketing managers and news content providers. Millennials are choosing other platforms for their content, with streaming services fast becoming a staple of their media consumption.

Among the cable subscribers we talked to, the feelings are not exactly pleasant. There is practically universal agreement with two thorny issues: 88% of Canadians say there are many channels included in their current cable television plan that they never watch and 85% agree with the notion of “paying too much money for cable television each month.”

The arrival of ultra-cheap cable packages has not made Canadians happier about their television content. Flipping through channels that are never watched can be cumbersome.

This unpleasantness is also reflected in the fact that a slightly smaller but still sizable proportion of Canadian cable subscribers (70%) say they are disappointed with the variety of programming they are getting from their cable television plan. The numbers are highest in Atlantic Canada (78%) and British Columbia (75%). This is not a stat that should be spurned by our province’s media providers: three-in-four B.C. residents with cable are dissatisfied with what they are paying for. If these current consumers become more aware of cable-less options, as millennials clearly have done, they might opt to cut the cord.

But cutting the cord has provided a different challenge for governments. With streaming services gaining prominence, the idea of a “Netflix tax” consumed a lot of airtime and ink last year. In the end, the federal government ultimately abandoned this idea, which is especially popular only in one province.

In Quebec, the provincial government has compelled streaming services to start charging the Quebec Sales Tax in 2019. The Quebec government seeks to generate approximately $270 million each year from this move and ensure that local content providers – which might have a hard time being featured on streaming services – can compete with American behemoths like Netflix or Amazon Prime Video.

At this stage, the Netflix tax seems like a distant memory in English Canada. But if consumers continue to walk away from traditional television, federal and provincial governments might consider following Quebec’s lead, even if protecting local culture is not invoked as the main reason for their action. 

Photo Credit: Gage Skidmore

Half of Canadians Reject Taxes on Streaming Services

Quebec is the only region of the country where the idea is widely supported.

The idea of paying provincial or federal sales taxes for online streaming services is rejected by half of Canadians, a new Research Co. poll has found.

In the online survey of a representative sample of Canadians, 51% of respondents disagree with the idea, while more than a third (36%) agree with it.

Last year, the federal government suggested that companies that provide streaming media and video on-demand online—including Netflix, iTunes, Amazon and Spotify—should be taxed in Canada, with any revenues generated from this tax being used to fund Canadian film and television productions. Because these companies have no physical presence in Canada, they are currently not compelled to collect or remit provincial or federal sales taxes.

In the end, the federal government announced it would not tax streaming providers, and Netflix announced a $500 million investment in original Canadian film and television productions.

Rejection to a tax on streaming services is high across most provinces, with one glaring exception. While large majorities of Canadians in the Atlantic Provinces and the Prairies are opposed to this tax, 54% of Quebecers are in favour of it.

The Government of Quebec announced in March that it will require foreign-based online services to collect the general sales tax (GST) from its customers, starting in January 2019. Quebec claims it is losing up to $270 million each year by not collecting these taxes.

“This is an issue where Millennials and Baby Boomers across the country are in agreement,” says Mario Canseco, President at Research Co. “These two groups have the highest level of opposition to a tax on streaming services.”

Methodology:
Results are based on an online study conducted from May 7 to May 11, 2018, among 1,000 adults in Canada. The data has been statistically weighted according to Canadian census figures for age, gender and region. The margin of error—which measures sample variability—is +/- 3.1 percentage points, nineteen times out of twenty.

Find our full data set here and download the press release here. 

For more information on this poll, please contact:
Mario Canseco, President, Research Co.
[c] 778.929.0490
[e] mario.canseco@researchco.ca