The Canadian M&E industry will grow at a respectable five percent CAGR during 2013-2018, from $46.6B to $59.4B. Canada is positioning itself as a world leader, including with extra value added segments such as: filming and co-production incentives for foreign investors, a vibrant game developer’s marketplace, and a strong focus on copyrights to build the foundation for a robust music sector. Canada’s switch to a digital M&E sector is driven by an increase in broadband penetration, from 66 percent of households in 2013 to 75 percent in 2018. Canada invests heavily in its domestic creative economy, and besides implementing content restrictions to protect the domestic market, large subsidies are provided to startups and artists, representing competition for U.S. entrants.
Last Published: 3/9/2016

The 2015 Top Markets Report for Media and Entertainment ranked 25 export markets, Canada was ranked #3.
 

Filmed Entertainment
Canada’s filmed entertainment market will grow at a modest 1.8 percent between 2013 and 2018, from $3.3 - $3.6 billion, and box office revenues will constitute 40 percent of the 2018 earnings, growing itself at 3.2 percent.  The U.S. filmed entertainment industry enjoys a robust relationship with Canada.
 
While Canada holds co-production treaties with over 50 countries, the United States conducts joint projects without such an official agreement, and both tax and filming incentives are available.  OTT and streaming content will grow between 22-24 percent during this period. While physical home video will continue to decline, albeit to reach $1.14 billion in revenues by 2018, TV subscriptions will experience a slow but steady rise at 3.8 percent leading up to 2018.
 
Netflix is expanding rapidly, and video rental kiosk company Digiboo is establishing itself in the Canadian market, signaling growth opportunities both for digital content and physical rentals. Cineplex is operating successfully in the market as well, offering digital rentals. Canadians are increasingly choosing TV series over feature films, and movies are more often viewed on TV than at the theaters. 
 
Consumers are accessing content on-demand across multiple platforms. There is also a disparity between demand for French versus English language content, which warrants further exploration and could signal good growth opportunities for U.S. content creators of English filmed entertainment, if targeting the right market segment. The Canadian government requires 60 percent of televised content to be Canadian, and Canadian broadcasters have to spend 30 percent of their revenues on Canadian programs.

Music
The Canadian music industry will grow 2.2 percent, during the period 2013-2018, from $1.34 billion to $1.5 billion. The growth opportunities can be found in digital music, as streaming is expected to grow by 14.6 percent and downloads by 9.8 percent, representing excellent opportunities for U.S. music. Digital revenues grew 13 percent from 2012 to 2014, to reach $261 million or 51 percent of Canada’s music revenues, and overtook physical revenues, which declined by 6 percent. Content restrictions are in place for radio play; 35 percent of radio content must be Canadian, and 30 percent of radio play between 6am-6pm Monday-Friday must be Canadian content. Further regulations concerning music play can be found on the Canadian Radio-TV and Telecommunications Commission’s (CRTC’s) website.

Games
Video games are set to reach $1.43 billion in 2018 (5.4 percent growth) from $1.10 billion in 2013. Growth has been spurred by mobile gaming and game consoles, as well as in related advertising revenues. While computer games are declining (digital PC games will grow 4 percent, but physical PC games will decline 21.4 percent during the same time), console sales constituted 62 percent of the 2013 market, and unlike in other developed economies, will remain robust, only dipping two  percent to 60 percent by 2018. Digital console games will grow 17 percent between 2013-2018, demonstrating the shift from physical to digital distribution and consumer demand for digital. Mobile games will continue to grow and “84 percent of Canadian video game companies are actively working on products or services for mobile platforms,” signaling intense focus and opportunities in the mobile sector.
 
Challenges Facing U.S. M&E Exporters
There is significant demand for U.S. content in Canada, and U.S. exporters have a lot of opportunities in the market. However, online infringement is high and enforcement action weaker than expected considering the advanced marketplace. There have been complaints of illegal and uncompensated retransmission of TV content, and unfair discrimination against music public performance, which are both presently being discussed by the two governments and industry representatives.

 

[i] Telefilm Canada: Partnering with Canada. http://www.telefilm.ca/canada-usb/en/coventures/0 [ii] http://www.cmf-fmc.ca/industry-advisory/article/2014/09/study-indicates-canadians-increasingly-choosing-to-watch-tv-series-in-preference-to-feature-films-and-confirms-that-most-film-viewing-is-done-via-tv/. [iii] Canadian Radio-Television and Telecommunications Commission: http://laws-lois.justice.gc.ca/eng/acts/B-9.01/ and http://www.huffingtonpost.ca/2013/11/29/canadian-content-netflix_n_4358272.html. [iv]Canadian content requirements for popular music: http://www.crtc.gc.ca/eng/cancon/r_cdn.htm. [v] Canada’s Video Game Industry in 2013: Canada’s Video Game Industry in 2013 Final Report July 2013. Prepared for Entertainment Software Association of Canada by Nordicity. http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&sqi=2&ved=0CFEQFjAG&url=http percent3A percent2F percent2Ftheesa.ca percent2Fwp-content percent2Fuploads percent2F2013 percent2F10 percent2FESAC-Video-Games-Profile-2013-FINAL-2013-10-21-CIRC.pdf&ei=KBF8VLiIH8besATt9YHYDw&usg=AFQjCNEoK7UQL8qZVjzSpzgTW2E-bwX0sQ&bvm=bv.80642063,d.cWc



Canada Media and Entertainment Export Potential