Did you know that Canada is one of the countries with the highest percentage of internet users? Over 92% of Canadians have access to and use the Internet. As we all know, the internet is mainly used for consuming content, or for entertainment. This also indicates that digital entertainment businesses are thriving in Canada, right?
Well, yes and no. Sooner or later businesses and industries reach their plateau. Regardless of innovation growth becomes more difficult, and business less sustainable. So, let’s take a deeper dive into the Canadian entertainment industry.
via unsplash
Overview of the Canadian Entertainment Industry
The digital economy in Canada is strongly connected to the entertainment sector, which is valued at 15 billion Canadian dollars. There are almost 60,000 businesses in total, and they are involved in the production of movies, music, publishing, and in gaming.
Films and Television
It’s difficult to get an accurate reading of how much this part of the industry contributes. To that end, we will use the date from the Canadian Media Producers Association from 2020:
- Total firm and media production is worth 9.3 billion CAD
- Total jobs generated – 244, 500
- 73,900 jobs for television production
- 7,280 jobs for cinema film production
- 23,410 jobs for broadcaster production (in-house)
- 139,910 jobs via foreign location production
- 56% of the revenue is generated via Foreign locations and services
In other words, Canada is a very appealing location for creating entertaining content. Many foreign producers come to Canada and collaborate with Canadian companies in order to make films, and TV shows.
Music
Not too long ago, the success of the music industry was measured based on the number of albums sold. Now it’s more difficult than that. The streaming services changed this dynamic. The number of paid downloads and a number of sold discs has gone down significantly. However, way more people are streaming their music. Last year the number of audio streams hit 100 billion for the first time. Surprisingly enough, vinyl sales are still doing fine.
Gaming and Gambling
The gaming sector contributes over 3.7 billion CAD to Canada’s GDP. This part of the industry is expected to continue its growth. This is mainly due to e-sports, and online gambling. Although online gambling businesses are illegal in Canada some provinces have taken additional steps to collaborate with foreign providers more closely.
Ontario opened up a gambling commission that in a way regulates offshore digital casinos. Players can use the list of Ontario online casinos in order to find out where it is safe to gamble. Moreover, when they are spending money on these sites they are also helping the local economy to an extent.
Live performances
On the federal level, the main contributor to live performances is Canada Arts Presentation Fund or CAPF. CAPF helps organize around 600 arts festivals or performances every year in more than 200 cities. This program has supported almost 40,000 live performances in total, and the number of attendees exceeds 22 million every year. According to some estimates for every dollar invested in these festivals approximately 8.50 CAD is spent in the Canadian economy. In 2019 and 2020 CAPF financial support was around 32.5 million CAD
Market Size
It’s difficult to measure the exact impact of the market as a whole, but we do have some concrete data, based on in-app purchases. This allows us to measure where people spend money the most within the entertainment sector. According to Statista, revenue in entertainment is estimated at C$531 million. Over C$188 million is revenue from in-app purchases. Also, more than C$ 340 million comes from advertising within the entertainment sector. As far as app usage goes, people mainly use social media sites and gaming sites, and that’s also where most of the in-app purchases come from. :
- Social media users
- Hardcore gamers
- Casual gamers,
- Social casinos
- eSports fans
As stated, the industry as a whole is worth around 15 billion CAD. The majority of that value comes from film and television, around 9.3 billion CAD. Gaming accounts for 3.7 billion CAD. So, music, and live performances together account for 2 billion CAD.
Challenges
This advertising sale is actually a reason why it is difficult to gauge the contribution of each entertainment segment. Many social media and streaming platforms offer content for free. They generate income through ads and through selling user data. The impact of a single song, movie, or game is lost, as all of these features are bundled together. The businesses mainly analyze user engagement with this content to figure out what to add next and get more subscribers.
Consumer trends have changed. Young people are less likely to go to the cinema if the same content is available via streaming services. Consequently, movie studios don’t only earn from theatrical releases, they have independent contracts with these streaming services. Gaming is moving in the same direction. Microsoft and PlayStation all have subscription-based models and don’t earn only through sales of digital game copies.
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