The Battle for the North American

(US/Canada) Couch Potato:

Online & Traditional TV and
Movie Distribution
April 2014
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The Battle for the North American (US/Canada) Couch Potato:

Bundling, TV, Internet, Telephone, Wireless, April 2014

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Contents
COMMENTARY ................................................................................................. 10
SECTION ONE: US BROADCAST, CABLE & PAY NETWORKS
ONLINE ................................................................................................................ 13
Online Revenue and Viewing Methodology .................................................. 13
Estimated Percentage of Average Weekly Viewers That Watch Free
Online Full Episodes by Broadcast Network, Cable Network, and
Broadcast/Cable Network Viewership, 2012-2015 ................................. 14
Estimated US Broadcast & Cable Network TV Advertising Revenue,
Online Broadcast/Cable Network TV Advertising Revenue, Online
Share of TV Advertising Revenue, 2012-2016 .......................................... 15
Estimated US Online TV Advertising Revenue by CBS, Discovery,
Disney/ABC, NBCUniversal, Scripps Networks, Time Warner, 21st
Century Fox, Viacom, 2012-2014 ................................................................ 16
Estimated US Households, TV Subscribers, Over the Air Households,
TV Cord Cutter Households, 2012-2014 ................................................... 17
Estimated US Cable, Satellite, Telco TV Subscribers and Total, 20122016 ................................................................................................................. 17
Estimated US TV Access Revenue by Cable, Satellite, Telco, 2012-2016
......................................................................................................................... 17
Estimated TV and Residential Broadband Subscribers by Leading
Cable, Telco & Satellite Provider, 2013 and 2014 ..................................... 18
Estimated US Residential Internet Subscribers by High Speed Cable,
Telco, Other Broadband, Dial, Residential Internet Subscribers as a
Percentage of All US Residences, and Total Residential Internet Access
Subscriber Revenue, 2012-2016 .................................................................. 19
Broadcast Network TV Online: Free Viewing & Advertising Minutes
Moderate, Authentication & Windowings Progress, Hulus Purpose? ........... 20
Estimated Percentage of Average Weekly Viewers That Watch Free
Online Broadcast Full Episodes by ABC.go.com, CBS.com, Fox.com,
NBC.com, and Their Online Distribution Partners Websites, 2012-2015
......................................................................................................................... 20
Cable Network TV Online: Free Viewing & Advertising Minutes Moderate,
Authentications Progress ........................................................................................ 29
Estimated Percentage of Average Weekly Viewers That Watch Free
Cable Network Online Full Episodes at AETN, Disney, NBCUniversal,
Scripps Networks, Time Warner, Viacom and Their Online
Distribution Partners' Websites, 2012-2015 .............................................. 29
Estimated Programming Sales by Cable Networks, Pay, VOD/PPV,
Other to US Cable, Satellite, Telco TV Providers, 2012-2014 ................. 30
Estimated Programming Expenditures by US Cable, Satellite, Telco TV
Providers, 2012-2014 .................................................................................... 30
Estimated Programming Expenditures by Comcast, Time Warner
Cable, DirecTV, Dish, 2012-2014 ................................................................ 30

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COUCH POTATO

Estimated Programming Expenditures for US Market, by Apple,

Netflix, Other Online Providers, TV Access Providers, and Per
Subscriber Spend Netflix Versus TV Access Providers, 2012-2014 ....... 31
Estimated Apple, Netflix, TV Access Provider Content Costs as a
Percentage of Revenue, 2012-2014 ............................................................. 31
Pay-TV Online: Highly Authenticated, Attempting to Counter Netflix ........... 36
Mobile TV Offers ....................................................................................................... 39

SECTION TWO: CHALLENGES & REALITIES ......................................... 41

Traditional TV is Far From Dead: Broadcast Advertising Holding Its Own,
Cable Network Advertising & Programming Fee Growth, TV Access Revenue
...................................................................................................................................... 42
TV Cord Cutting: Statistically Small, But Growing .............................................. 44
US TV Subscriber Cord Cutter Model, 2008-2015 ................................... 45
Will Netflixs Go-Big Strategy Succeed: Margin Compression, Programming
Spend, Subscriber Growth Challenges, Why Mail is Still Important ................ 47
Netflix Financial Model, 2011-2014 ............................................................ 47
Estimated Netflix Content Obligations, 2011-2013 .................................. 48
Estimated Programming Expenditures for the US Market by Apple,
Netflix, Other Online Providers, TV Access Providers, and Per
Subscriber Spend Netflix Versus TV Access Providers, 2012-2014 ....... 48
Estimated Apple, Netflix, TV Access Provider Content Costs as a
Percentage of Revenue, 2012-2014 ............................................................. 49
Estimated Netflix Subscribers by US (by Streaming, Streaming-Only,
DVD, DVD-Only), Canada Streaming, Caribbean/Europe/Latin
America Streaming, 2010-2016 ................................................................... 49
Estimated Average Hourly Cost of Viewing by Cable/Satellite/Telco
TV Access Provider, Apple iTunes, Amazon Prime, Hulu Plus, Netflix,
Redbox Instant .............................................................................................. 50
iTunes & TV Download Sales Competitors Modest Market Impact, Far More
Expensive than Hulu Plus, Netflix, Amazon or TV Subscription ...................... 58
Bandwidth Caps/Metered Billing/Overage Fees: TV/Internet Access Players
Other Advantage ....................................................................................................... 60
TV VOD, Alternative to Online TV & the DVR .................................................... 62
Estimated US DVR Subscribers by Cable, Satellite, Telco, TiVo, and as
Percentage of Total TV Subs, 2012-2016 .................................................... 62
Estimated DVR Subscribers and Penetration by AT&T, Verizon,
DirecTV, Dish, Comcast, Time Warner Cable, 2013 and 2014 ............... 62
Competition Online: Google/YouTube Rule Online Advertising and Video,
YouTubes Channel Play .......................................................................................... 65
Estimated US Online Advertising Market Revenue by Google,
Facebook, Yahoo, Microsoft, AOL, Broadcaster/Cable Network TV,
Newspaper/Magazine, Other, 2012-2016 ................................................. 65
Estimated US Online Advertising Market Share by Google, Facebook,
Yahoo, Microsoft, AOL, Broadcaster/Cable Network TV,
Newspaper/Magazine, Other, 2012-2016 ................................................. 66
Estimated US Search Market Share, 2013 ................................................. 67

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This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Estimated Average 2013 Unique Monthly US Video Streaming Users

By Leading Websites .................................................................................... 67

SECTION THREE: US MOVIE/TV DVD/BLU-RAY/DOWNLOAD

SALES & RENTAL MARKET .......................................................................... 70
Estimated US Movie/TV DVD/Blu-ray/Download Sales including
Break Out of Online Download by Movie and TV Revenue, and US
Movie/TV Rental including Break Out by Store, Mail, Kiosk, Online
(including by Subscription & Transactional Revenue),
Cable/Satellite/Telco TV VOD Revenue, and US Box Office, 2012-2016
......................................................................................................................... 70
Estimated Movie and TV Download Market Share of US DVD/Bluray/Download Sales Revenue, and Estimated Store, Mail, Kiosk,
Online (including by Subscription & Transactional),
Cable/Satellite/Telco TV VOD Market Share of US Movie/TV Rental
Revenue, 2012-2016 ...................................................................................... 71
Estimated US Hulu Plus, US Netflix Streaming-Only, Redbox Instant
by Verizon Streaming Subscribers, Revenue, ARPU, 2012-2016 ........... 72
Apples Estimated Share of US Online Movie Download Sales, Online
Download TV Sales, Online Movie/TV Rental Transactional Revenue,
2012-2015........................................................................................................ 72
Estimated US Redbox Kiosks, DVD/Blu-ray Movie Rental Revenue,
ARPU Per Kiosk, 2012-2016 ........................................................................ 73
Estimated US Netflix DVD/Blu-ray Mail Subscribers, Revenue, ARPU,
2012-2016........................................................................................................ 73
Netflix Financial Model, 2011-2014 ............................................................ 74
Estimated Netflix Content Obligations, 2011-2013 .................................. 74
Estimated Programming Expenditures for the US Market by Apple,
Netflix, Other Online Providers, TV Access Providers, and Per
Subscriber Spend Netflix Versus TV Access Providers, 2012-2014 ....... 75
Estimated Netflix Subscribers by US (by Streaming, Streaming-Only,
DVD, DVD-Only), Canada Streaming, Caribbean/Europe/Latin
America Streaming, 2010-2016 ................................................................... 75
Estimated Average Hourly Cost of Viewing by Cable/Satellite/Telco
TV Access Provider, Apple iTunes, Amazon Prime, Hulu Plus, Netflix,
Redbox Instant .............................................................................................. 76
Average Estimated New Movie Revenue Percentage Splits: Box Office,
DVD/Blu-ray/Download Sales, Online Rental, Cable/Satellite/Telco
VOD ................................................................................................................ 77
Average Movie Window Progression ....................................................... 77
Estimated PS3/PS4, Wii/U and Xbox 360/Ones Sold in the USA, 20122014 ................................................................................................................. 78
Estimated Apple TV and Roku's Sold, 2012-2014 .................................... 78
Movie/TV Blu-ray/DVD/Download Sales: Online Movie & TV Download
Sales Slowly Taking Market Share, Breaking Out iTunes Movie & TV Sales .. 79
Rental: Store, Online Transactional, Cable/Satellite/Telco TV VOD, Redbox
Kiosk, Redbox Instant by Verizon, Netflix, Amazon, Hulu ................................ 83
Store: Independents Domain .................................................................................. 85

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Online Transactional: Low Market Share .............................................................. 87

Cable/Satellite/Telco TV VOD: Growth Constrained ........................................ 88
Redbox: Kiosks and Revenue Plateau .................................................................... 89
Redbox Instant by Verizon Pricing Strategy Conundrum .................................. 90
Will Netflixs Go-Big Strategy Succeed: Margin Compression, Programming
Spend, Subscriber Growth Challenges, Why Mail is Still Important ................ 92
Amazon Prime: A Growing Hindrance to Netflix .............................................. 100
Hulu Plus: Part Consumer Offer, Part Negotiation Tool................................... 102

SECTION FOUR: CANADIAN BROADCAST, SPECIALTY & PAY

NETWORKS ONLINE .................................................................................... 103
Online Revenue and Viewing Methodology ................................................ 103
Estimated Percentage of Average Weekly Viewers That Watch Free
Online Full Episodes by Broadcast Network, Specialty Network, and
Broadcast/Specialty Network Viewership, 2012-2015 ......................... 104
Estimated Canadian Broadcaster & Specialty Network TV Advertising
Revenue, Online Broadcaster/Specialty Advertising Revenue, Online
Share of Share of TV Advertising Revenue, 2012-2016 ......................... 105
Estimated Canadian, Non-Canadian, and Total Programming
Expenditures by Private Broadcasters, & Total Programming
Expenditure by Specialty/Pay Networks, 2012-2014 ........................... 106
Estimated Canadian Households, TV Subscribers, Over the Air
Households, Cord Cutter Households, 2012-2014 ................................ 106
Estimated Canadian TV Subscribers by Cable, Satellite, Telco, 20122016 ............................................................................................................... 107
Estimated Canadian TV Revenue by Cable, Satellite, Telco, 2012-2016
....................................................................................................................... 107
Estimated Canadian Residential Internet Subscribers by High Speed
Cable, Telco, Other Broadband, Dial, Residential Internet Subscribers
as a Percentage of All Canadian Residences, and Total Residential
Internet Subscriber Revenue, 2012-2016 ................................................. 108
Estimated TV & Residential Broadband Subscribers by Leading
Providers, 2013 and 2014 ........................................................................... 109
Broadcast Network Online TV: Free Increases as Advertising Minutes Rise,
Authentication & Windowing Make Progress .................................................... 110
Estimated Percentage of Average Weekly Viewers That Watch Free
Online Broadcast Full Episodes at CBC.ca, Citytv.com, CTV.ca,
GlobalTV.com, TVA.Canoe.ca, 2012-2015 .............................................. 110
Specialty Network Online TV: Limited Free Shows, More Ad Minutes &
Authentication ......................................................................................................... 114
Estimated Percentage of Average Weekly Viewers That Watch Free
Online Specialty Full Episodes at Bell Media (includes Astral), Corus,
Shaw Media Websites, 2012-2015............................................................. 114
Estimated Cable, Satellite, Telco Programming Expenditures to
Specialty Network and Pay/VOD/PPV, 2012-2014.............................. 115
Pay-TV Online: Highly Authenticated, Attempting to Counter Netflix ......... 120

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Mobile TV Offers ..................................................................................................... 122

SECTION FIVE: CANADIAN CHALLENGES & REALITIES ............... 123

Canadian TV: Maturing Broadcast & Specialty Advertising and Specialty/Pay
Programming Revenue ........................................................................................... 124
The Canadian Regulatory Environment: Limits On Vertically Integrated
Players Competitive Advantage .......................................................................... 125
Canadian TV Cord Cutting: Statistically Small, But Growing .......................... 129
Canadian TV Subscriber Cord Cutter Model, 2011-2015...................... 130
Netflix: Strong Canadian Traction In Spite of Limited Library ........................ 135
Estimated Programming Expenditures for Canadian Market, by
Apple, Netflix, Other Online Providers, TV Access Providers and Per
Subscriber Netflix Versus TV Access Providers, 2012-2014 ................. 135
Estimated Netflix Subscribers by US (by Streaming, Streaming-Only,
DVD, DVD-Only), Canada Streaming, Caribbean/Europe/Latin
America Streaming, 2010-2016 ................................................................. 135
Estimated Average Hourly Cost of Viewing by Cable/Satellite/Telco
TV Access Provider, Apple iTunes, Netflix ............................................ 136
iTunes & TV Download Sales Competitors Modest Market Impact, Far More
Expensive than Netflix or TV Subscription ......................................................... 144
Bandwidth Caps/Metered Billing/Overage Fees: Almost Ubiquitous .......... 146
TV VOD, Alternative to Online TV & the PVR ................................................... 148
Estimated Canadian PVR Subscribers by Cable, Satellite, Telco, and as
Percentage of Total TV Subs, 2012-2016 .................................................. 148
Estimated PVR Subscribers and Penetration by Bell Satellite TV, Bell
Telco TV, Rogers, Shaw Cable, Telus, 2013 and 2014 ........................... 148
Competition Online: Google/YouTube Rule Online Advertising and Video,
YouTubes Channel Play ........................................................................................ 150
Estimated Canadian Online Advertising Market Revenue 2012-2016,
and by Google, Yellow Media, Facebook, Bell/Bell Media, Microsoft,
Torstar, Postmedia, Quebecor, Rogers, Other, 2012-2014 .................... 150
Estimated Canadian Online Advertising Market Share by Google,
Yellow Media, Facebook, Bell/Bell Media, Microsoft, Torstar,
Postmedia, Quebecor, Rogers, Other, 2012-2014 ................................... 151
Estimated Canadian Search Market Share, 2013.................................... 151
Estimated 2013 Average Monthly Unique Users of Leading Canadian
Websites ....................................................................................................... 152

SECTION SIX: CANADIAN MOVIE/TV DVD/BLU-RAY/DOWNLOAD

SALES & RENTAL MARKET ........................................................................ 155
Estimated Canadian Movie/TV DVD/Blu-ray/Download Sales
including Break Out of Online Movie and TV Download
RevenueMovie/TV Rental including Break Out by Store, Mail,
Kiosk, Online (including by Subscription & Transactional),
Cable/Satellite/Telco TV VOD Revenue, and Box Office Revenue,
2012-2016...................................................................................................... 155

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Estimated Canadian Movie/ TV Download Market Share of Canadian

DVD/Blu-ray/Download Movie and TV Sales Revenue, and
Estimated Store, Mail, Kiosk, Online (including by Subscription &
Transactional), Cable/Satellite/Telco TV VOD Share of Canadian
Movie/TV Rental Revenue, 2012-2016 .................................................... 156
Estimated Canadian Apple iTunes TV Download, Movie Download
and Online Transactional Rental Market Share, Netflix Subscribers,
Number of Kiosks, Number of Redbox Kiosks, Zip.ca Mail
Subscribers, 2012-2016 ............................................................................... 156
Canadian Kiosk Players: Price, Location, Estimated Kiosks as of YearEnd 2013 ....................................................................................................... 157
Canadian Mail Players as of Year-End 2013 ........................................... 157
Estimated Programming Expenditures for Canadian Market, by
Apple, Netflix, Other Online Providers, TV Access Providers and Per
Subscriber Netflix Versus TV Access Providers, 2012-2014 ................. 158
Estimated Netflix Subscribers by US (by Streaming, Streaming-Only,
DVD, DVD-Only), Canada Streaming, Caribbean/Europe/Latin
America Streaming, 2010-2016 ................................................................. 158
Estimated Average Hourly Cost of Viewing by Cable/Satellite/Telco
TV Access Provider, Apple iTunes, Netflix ............................................ 159
Estimated PS3/PS4, Wii/U and Xbox 360/Ones Sold in Canada, 20122014 ............................................................................................................... 160
Movie/TV Blu-ray/DVD/Download Sales: Online Movie & TV Download
Sales Slowly Taking Market Share, Breaking Out iTunes Movie & TV Sales 161
Canadas Rental Transformation Underway ....................................................... 165
Store Channels Demise: Independents Rule ...................................................... 166
Kiosks Low-Priced Play: Redbox the Game Changer, Best Buy, Starburst,
Zip.ca ......................................................................................................................... 168
Netflix: Strong Canadian Traction In Spite of Limited Library ........................ 170
Cable/Satellite/Telco TV VOD: Growth Constrained ...................................... 177
Online Transactional: Modest Market Share ....................................................... 179
Mail: Insignificant in Canada ................................................................................. 180

SECTION SEVEN: PROFILES ....................................................................... 181

US PROFILES .................................................................................................... 182
Amazon Prime ......................................................................................................... 183
Apple ......................................................................................................................... 184
Blockbuster/Dish .................................................................................................... 191
CBS Corp................................................................................................................... 193
Comcast/NBCUniversal ........................................................................................ 194
Google/YouTube..................................................................................................... 197
Hulu ........................................................................................................................... 199
Microsoft ................................................................................................................... 201
Netflix ........................................................................................................................ 202
Redbox/Outerwall .................................................................................................. 206

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

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by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Scripps Network Interactive .................................................................................. 208

Time Warner............................................................................................................. 209
21st Century Fox ....................................................................................................... 210
Viacom ...................................................................................................................... 212
Walt Disney/ABC ................................................................................................... 214
Yahoo ......................................................................................................................... 216

CANADIAN PROFILES.................................................................................. 217

Apple Canada .......................................................................................................... 218
Bell/Bell Media ........................................................................................................ 226
CBC ............................................................................................................................ 228
Corus Entertainment ............................................................................................... 229
Netflix Canada ......................................................................................................... 231
Quebecor ................................................................................................................... 234
Redbox Canada ........................................................................................................ 235
Rogers ........................................................................................................................ 236
Shaw/Shaw Media .................................................................................................. 239

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

Commentary
Now in its eighth year of publication, The Battle for the North
American (US/Canada) Couch Potato: Online and Traditional
TV, and Movie Distribution (April 2014, 240 pages) contains
detailed analysis by Company & Market. In addition to
Convergence analysis, sources include Company interviews,
annual/quarterly reports & presentations, CRTC, Statistics
Canada, US Census Bureau.
US Commentary (Canadian Commentary follows), please see
Table of Contents for what is included in this Report:
The audience for free online full-episode TV (not requiring a TV
subscription, iTunes, Hulu Plus, Netflix, Amazon, etc) remains
flat. Based on the full-episode TV shows US Broadcasters &
Cable Networks made available online for free in 2013, we
estimate that on average 18% of the weekly viewing audience
watched on average two-three episodes at a Broadcaster or
Cable Network or one of their distribution partners websites,
2012 saw 18% and we forecast 18% for 2014.
We attribute the leveling off to the growth of Netflix (as well as
Amazon, Hulu Plus, etc), increasing DVR penetration, online
advertising loads, less free and more authenticated online full
episode Broadcast & Cable Network TV behind Cable, Satellite,
Telco TV access players walled gardens.
We estimate Broadcast (including local station) & Cable
Network Online TV advertising revenues represented 3.4%
($2.57 billion) of 2013 US Broadcast/Cable Network TV
advertising revenue, and forecast 3.7% for 2014.
We estimate a decline of 188,000 US TV subscribers in 2013,
down from 35,000 TV subscriber additions in 2012, and forecast
a decline of 160,000 TV subs for 2014. 2000-2009 annual US TV
subscriber additions averaged 2 million, while 2010-2013
averaged 60,000. Based on our TV Cord Cutting Model (takes
into account economic conditions, annual subscriber additions,
digital transition), we estimate 5.06 million (5%) US TV
subscribers cut their TV subscriptions 2008-13 to rely solely on
Netflix, Over the Air, Online, etc, 1.25 million (1.3%) in 2013
alone. We forecast US TV cord cutter households will reach 6.23
million (6.2%) by year-end 2014.

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

10

Kiosk, Mail & Streaming Rental (assuming sufficient usage)

offer a lower-price value proposition & have radically altered
the Rental channel while negatively impacting DVD/Bluray/Download sales, and encroaching on TV subscription.
We estimate Online Subscription represented 35%, Kiosk 21%,
VOD (Cable, Satellite, Telco TV) 19%, Store 11%, Netflix Mail
10%, Online Transactional 4%, of 2013 US Movie/TV Rental
market revenue, and forecast Online Subscription 41%, Kiosk
20%, VOD (Cable, Satellite, Telco TV) 18%, Store 8%, Netflix
Mail 8%, Online Transactional 4%, for 2014. Without sufficient
subscriber growth, higher prices, or a cut in programming
spend, market-leader Netflix will continue to see low operating
income margins.
We estimate Download Movie/TV sales represented 12% of
2013 US DVD/Blu-ray/Download Movie/TV Sales.
Canadian Commentary, please see Table of Contents for what
is included in this Report:
Based on the full-episode TV shows Canadian Broadcasters &
Specialty Networks made available online for free (not
requiring a TV subscription, iTunes, Netflix, etc) in 2013, we
estimate that on average 18% of the weekly viewing audience
watched on average two-three episodes at a Broadcaster or
Specialty Network website, 2012 saw 18%, and forecast 18% for
2014.
We attribute the leveling to the growth of Netflix, increasing
PVR penetration, online advertising loads, and more
authenticated online full episode Broadcast & Specialty
Network TV behind Cable, Satellite, Telco TV access players
walled gardens.
We estimate Broadcast & Specialty Network Online TV
advertising revenues represented 4.1% ($148 million) of 2013
Canadian Broadcast/Specialty Network TV advertising
revenue, and forecast 4.6% for 2014.

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

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by licensed users. No other use or disclosure is permitted.

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11

We estimate 2000 Canadian TV subscribers were added in 2013,

down from 37,000 TV subscriber additions in 2012, and forecast
a TV sub loss of 32,000 for 2014. 2007-2011 annual Canadian TV
subscriber additions averaged 220,000. Based on our TV Cord
Cutting Model (which takes into account annual subscriber
additions, economic conditions, and the digital transition), we
estimate 458,000 (3.9%) Canadian TV subscribers cut their TV
subscriptions 2011-2013 to rely solely on Netflix, Over the Air,
Online, etc, 193,000 (1.6%) in 2013 alone. We forecast Canadian
TV cord cutter households will reach 665,000 (5.7%) by year-end
2014.
Canadas rental transformation has begun: We estimate VOD
(Cable, Satellite, Telco TV) represented 31%, Store 30%, Online
Subscription (Netflix) 26%, Kiosk 5%, Online Transactional 5%,
Mail 3%, of 2013 Canadian Movie/TV Rental market revenue,
and forecast Online Subscription (Netflix) 31%, VOD (Cable,
Satellite, Telco TV) 29%, Store 23%, Kiosk 8%, Online
Transactional 6%, Mail 3% for 2014. We estimate Netflix and
Redbox will represent approximately half of 2016 Canadian
Rental revenue.
We estimate Download Movie/TV sales represented 11% of
2013 Canadian DVD/Blu-ray/Download Movie/TV Sales.

2014, THE CONVERGENCE CONSULTING GROUP LIMITED. ALL RIGHTS RESERVED.

This document contains confidential information, and is only for internal review
by licensed users. No other use or disclosure is permitted.

COUCH POTATO

12