Streaming takes over the Canadian content landscape

Say goodbye to your old iPod, your radio, and that dusty stack of CDs in the corner of your living room. Your DVD and Blu-ray discs probably aren’t far behind.

Data released by Media Technology Monitor this week confirms most Canadians now get their musical kicks from online streaming services, and the numbers are growing. According to the survey, nearly two-thirds of English-speaking Canadians now regularly stream online music, up from 61 per cent in 2012 and 57 per cent in 2011. YouTube has become the top source of free streamed music, with 53 per cent of Canadians now using the popular video site to listen to music.

Adapt or die

The shift to streaming services is already having profound implications for conventional media outlets, including radio stations, as they grapple with yet another threat to their existence. While approximately one in five Canadians now streams conventional AM or FM stations through a streaming service like Rdio or Songza, listeners are just as likely to use those same services to skip local – and familiar – outlets altogether. Programmers already struggling to make their content more adaptive to online-savvy listeners must now further differentiate themselves with real-time programming tweaks that, they hope, the streaming services won’t be able to match.

The rapid takeup in music streaming – the report suggests it doubled between 2012 and 2013 – underscores a broader change in consumption habits, as Canadians spend even more time using online services to stream movies, television shows and videos. Respondents said they spend about 25 per cent of their time online – or just over seven hours per week – tuned into music, and another 29 per cent consuming video-based content.

Is iTunes at risk?

The list of potential victims of this transition is long, and it isn’t limited to conventional broadcasters and distributors. Barely a decade after it broke consumers of their CD-buying habits and convinced an online-fearing industry that singles and albums could be securely purchased and downloaded, Apple’s dominant iTunes music store now finds itself increasingly vulnerable to these new content consumption patterns. Just as movie fans get used to the idea of subscribing to streaming services like Netflix – and send Blu-ray and DVD sales off a cliff – music buyers are reaching a similar conclusion: Why buy only as many titles as you can afford when you can subscribe and listen to whatever you want?

It’s an answer traditional distributors can’t answer as streaming continues to accelerate. A Cisco Systems Inc. report projects video, which now accounts for 78 per cent of all Internet traffic in the U.S., will increase to 84 per cent by 2018. The company estimates World Cup coverage-related video consumption alone will top Australia’s total amount of Internet traffic in 2013 as content distribution rapidly transitions to an on-demand, streamed baseline. Online connected machines will account for 46 per cent of Internet traffic by 2018 – up from 25 per cent now – as consumers spend less time with their conventional television sets.

Apple’s biggest-ever acquisition, last month’s US$3 billion Beats Electronics deal, is a high-stakes bet on a multi-platform, streamed future. Beats Music, launched last year, gives Apple immediate credibility as a streamed content provider and buys it time to shift iTunes toward an always-on future. It’s a lesson conventional media outfits would do well to follow, as radical new consumption patterns call for radical new strategies to remain relevant.

Within Canada’s conglomerate-dominated telecom landscape, there’s ample opportunity for conventional broadcasters and distributors – which increasingly are also our dominant Internet service and wireless providers – to adapt their offerings to accommodate the move to streaming.

Despite Canada’s reputation as a broadband and wireless laggard, loosening the grip on high-margin telecom services is precisely what the economy needs to remain relevant in a world where stream-happy consumers no longer own and store their own content.

Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. carmilevy@yahoo.ca