Rogers blames new regs for increased Canadian cord cutting

Rogers Communications, Canada's largest pay-TV operator, reported losses of 36,000 cable TV subscribers in its second quarter.

The company, which announced its results for the quarter ended March 31 on Tuesday, blames the video defections on new regulations established by the Canadian Radio-television and Telecommunications Commission (CRTC). Rogers say the new rules make it easier for customers to walk away from pay-TV contracts and encourage cord-cutting.

However, data released earlier this week by research company The Convergence Consulting Group suggests that the cord-cutting trend in the Great White North may run a little deeper than that.

Pay-TV companies operating in Canada lost a collective 95,000 subscribers in the country last year, before the new CRTC regs took effect. The report forecasts a loss of an additional 97,000 pay-TV subs in 2015. As recently as 2011, the Canadian pay-TV market had expanded by 220,000 video customers.

Meanwhile, operating with impunity under Canadian media laws, Netflix (NASDAQ: NFLX) added 900,000 customers in Canada in 2014.

Unlike pay-TV operators, Netflix is exempt from regulation and taxation in Canada under a new media provision. Convergence Consulting projects that the SVOD company will generate $413 million in Canadian revenue this year and more than $600 million by the end of 2017.

For more:
- read this Toronto Star story
- read this Toronto Globe and Mail story

Related links:
Canadian regulators mandate a la carte distribution for pay-TV
Parks: 17% of broadband homes likely to subscribe to HBO's upcoming a la carte service
Small Canadian ISPs starting to offer TV service bundles using telco, cable networks
Bell Canada tells CRTC to not force it to share last mile fiber
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Viacom threatens to bolt Canada if a la carte rules adopted, warns pay-TV faces 'death spiral'