The global entertainment industry has seen some disruption during recent times, both in the way that media is produced and consumed. The Covid-19 crisis has curtailed production just as demand for content soars from customers faced with fewer options outside their homes.
For the entertainment industry in Canada, the events of the past twelve months have had varying effects. Like the rest of the world, live entertainment such as theatre has foundered and faces an uncertain future. In other sectors there are positive signs, with Canada consolidating its place in the film production industry, as well as excelling in digital media and VFX.
Home Entertainment and Film Production
While cinemas may have been a casualty of the pandemic, viewers today have many small screen alternatives. OTT streaming media services such as Netflix are flourishing in Canada, and the sector is projected to retain its position as number four in the world in terms of revenue. Traditional TV has seen a slow decline due to the increased competition from streaming, especially satellite and cable providers.
Demand for new film and television media has never been higher, and Hollywood has grappled with the difficulties of production during a health crisis. As a result, more American productions have started to shift operations to Canada. Easier and cheaper access to testing, coupled with faster lab results, means that filming can continue with fewer delays and interruptions.
Production costs are also lower in Canada, so it is expected that the trend to use Canadian locations and studios for American television and movies will continue to grow. Foreign location services may soon account for almost half of Canadian film production revenue, and the country is now the third most filmed in the world. The sector as a whole employs more than 181,000 people and rising.
Gambling and Online Casino
Gambling has always been a popular form of entertainment in Canada, and until recently the domestic market showed strong growth. Provincial lottery and gambling providers still generate billions for the economy every year, but growth has slowed considerably over the past five years and looks set to remain stagnant.
The most significant factor to impact domestic online casino revenue has been the widespread introduction of overseas gambling operators. Offering customers more choice and variety, as well as more competitive bonuses and promotions, the offshore market has eclipsed local providers and increasingly reduced their market share. And with the rise of dedicated websites comparing the best online casinos (more information here), the choice for Canadian gamblers is easier than ever.
The Ontario administration has recently re-stated plans to open up the province to competition in online gambling. The current monopoly is run by the Ontario Lottery and Gaming Corporation. If the legislation goes through, Canada’s largest province would be the first to have a regulated and taxable online gambling market. Tax rates are expected to be set at around 20%, with the hope that the sector will raise hundreds of millions of dollars for the economy.
Video Games and eSports
Revenue from video games and eSports has seen significant growth in Canada in recent years, and it is predicted to be worth around C$3.6 billion by 2023. The market is around half the size of those in the UK and Germany, with casual and social gaming seeing the most rapid growth over the past five years.
eSports revenue has rocketed over the same period, starting at C$3.6 million in 2014 and reaching C$24.3 just four years later. The majority of income in Canadian eSports originates from media rights, and a dedicated TV channel was launched in 2017.
Canada is also a thriving hub for the development and production of video games, placed third globally. The country has considerable talent available, thanks in part to the many high-quality programs offered at institutions in Vancouver, Toronto and Montreal. Most provinces also offer tax incentives for digital media creation.
Music
The one sector of the Canadian entertainment industry that has not seen much mitigation of the effects of Covid-19 is music. The mass cancellation of live events and the shuttering of venues has left many companies and artists unable to manage on a severely reduced income. As many as 96% of venues reported that they are at critical risk of failure.
Research suggests that Canadians may be bucking an international trend by listening to more music and watching more concerts online. While the global trend has been to decrease, it seems that is not yet the case in Canada. Streaming remains strong, but actual sales across all formats except vinyl has decreased significantly in Canada.
Positive signs for the Canadian music industry include a strong indigenous music sector employing more than 3,000 people nationally. Hope for the future is also bolstered by the upcoming generations who place a greater value on music media. More Canadian consumers also indicated a willingness to sign up for music subscription services in the future.
Canada continues to be a world leader in musical talent. Toronto native The Weeknd released one of the most popular songs of 2020, Blinding Lights, which spawned a viral dance craze in the early days of global lockdown. Canadians were also well-represented at the Grammy Awards, with nominations for Shawn Mendes, Drake and newcomer Jessie Reyez.
Canada’s music industry has also been given a boost thanks to a lucrative collaboration between Universal Music Canada and Luminosity Gaming, a successful eSports company based in Toronto. The deal allows for cross-promotion, and gives UMC artists access to Luminosity’s large audience of users across digital platforms and social media.
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