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DOMAIN INDUSTRY DATA AND CANADIAN INTERNET TRENDS

CIRA Internet Factbook 2016

2

TABLE OF CONTENTSIntroduction ........................................................................................................... 3

The domain Industry ............................................................................................. 5

The brave world of new gTLDs ..........................................................................10

Global Internet access and use .......................................................................... 12

Canada’s Internet ................................................................................................ 16

Internet use in Canada ........................................................................................ 21

Cybersecurity + Internet technology ................................................................ 34

3

INTRODUCTION The Canadian Internet Registration Authority (CIRA) manages the .CA top-level domain, supports the development of Canada’s Internet community, and represents the .CA registry internationally. With 2.5 million domain names under management, .CA continues to be one of the fastest growing country code top-level domains in the world.

The sixth annual CIRA Factbook tracks global and domestic trends in Internet growth and use. Within these pages, you can discover how Canadians use the Internet, where .CA ranks in the rapidly-changing domain market, and information about the ever-changing world of digital security.

Data presented in the 2016 Factbook shows that Canadians continue to be among the most avid Internet users in the world. The way Canadians access the Internet is changing. Although many still use a laptop or desktop device for traditional online activities such as banking and email, more and more are shifting to mobile devices to engage in social media and to stream audio and video. Age also matters. Younger adult Canadians are more likely to use smartphones and tablets and less likely to subscribe to traditional cable as a means of consuming content than older Canadians.

It’s an exciting time in the domain space. Within the last year, the domain market has experienced an unprecedented shift. The emergence of more than a thousand new domains -- including .xyz, .top and .wang, -- has shaken the market. Investors in Asia have started looking to the booming domain market as a hedge to traditional investments. This has led to a surge in domain registrations, garnering momentum for the world’s most popular domain, .com, while triggering rapid sales and resales in the new gTLD space.

We hope the charts and data points in the pages that follow help to inform and engage readers on the Canadian Internet, offering a glimpse at the integral role the Internet plays in the lives and livelihoods of Canadians.

4

A MESSAGE FROM CIRA’S PRESIDENT AND CEOOur annual Internet Factbook is an opportunity for us to take a step back and remind ourselves of the important changes that are affecting our market. CIRA’s core product – .CA – maintains a strong position in the Canadian Internet landscape. Tracking the growth of new gTLDs and continuing to evolve our understanding how Canadians use the Internet is critical to keeping our work aligned with our customers’ needs. We need to ensure that we remain at the forefront of this rapidly changing industry.

CIRA’s approach is driven by our hope that digital technology can have a transformative effect on Canadian and global communities. Seeing the massive growth in connections in developing countries is motivating, and tracking persistent digital and economic divides drives us to develop and build programs that will help connect the next billion Internet users.

In recognition of the changing cybersecurity threats that Internet users are facing, this year’s report has a special chapter looking at how Canadians understand this risk and some of the implications for governments, companies, and non-profits.

Data helps us understand how our world is changing and we hope that our Factbook helps you stay informed on how digital technology is transforming how we engage and interact online.

Best, -Byron Holland

5

THE DOMAIN NAME INDUSTRYThe domain name system plays a critical role in how more than 3.2 billion users interact with the Internet. Worth over $4 billion, the domain name industry continues to grow. There currently are more than 300 million domain names registered globally.

There are two types of top-level domains (TLDs). Country code top-level domains (ccTLDs), are those representing a country or state, such as .CA, .us, and .uk. Generic top-level domains (gTLDs) are those such as .com, .net, and .org. Between 1984 and 2013, only 22 gTLDs existed, with .com representing half of all domain names registered.

2015 was a banner year for the domain name industry. The Internet Corporation for Assigned Names and Numbers (ICANN), the global body charged with managing the domain name system, approved more than 1,000 new gTLDs. Within less than a year, registrations for these new gTLDs topped 22 million.

At the same time, government-led initiatives in China led to unprecedented domain industry growth there, as investors looked to the domain market to make-up for shortfalls in other traditional investment sectors. This has contributed to a new speculative market for domains. While many ccTLDs are somewhat insulated from this speculation (due to presence requirements), the same is not true for major TLDs. This was the first year that .com warned investors that they would experience a decline in quarter-over-quarter domains under management. According to a report in Quartz from earlier this year, upwards of 75 percent of released two letter domains have been purchased by Chinese Registrants. In Domain Name Journal’s annual state of the industry report, there was near universal agreement that market movements in China were driving significant numbers of registrations.

With the rise of the new gTLDS and their potential for branding to the right of the dot, businesses and investors typically outside the domain industry have started to take a greater interest in domains.

http://files.shareholder.com/downloads/VRSN/3342860245x0x914263/7DC7690B-00BA-4DDA-95A2-10A4EC74F645/Q3-2016_Earnings_Slides-Final.pdf

http://files.shareholder.com/downloads/VRSN/3342860245x0x914263/7DC7690B-00BA-4DDA-95A2-10A4EC74F645/Q3-2016_Earnings_Slides-Final.pdf

http://qz.com/581248/chinas-latest-investment-craze-is-short-domain-names/

http://qz.com/581248/chinas-latest-investment-craze-is-short-domain-names/

http://dnjournal.com/cover/2016/january.htm

http://dnjournal.com/cover/2016/january.htm

6

Global top-level domain registration trends

Despite the activity in China and across Asia, global growth in the domain industry has slowed over the past two years. TLD growth overall in 2015 and 2016 frequently fell below one per cent quarter-over-quarter. ccTLD registrations historically outpaced those of gTLDs between 2007 and 2014,with growth rates between 2 and 5 per cent per quarter. With the introduction of over 1,000 new gTLDs, ccTLDs may start to take a backseat to their generic counterparts.

Global top-level domain growth (excluding .cn)

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

Q1

2010

Q

2 20

10

Q3

2010

Q

4 20

10

Q1

2011

Q

2 20

11

Q3

2011

Q

4 20

11

Q1

2012

Q

2 20

12

Q3

2012

Q

4 20

12

Q1

2013

Q

2 20

13

Q3

2013

Q

4 20

13

Q1

2014

Q

2 20

14

Q3

2014

Q

4 20

14

Q1

2015

Q

2 20

15

Q3

2015

Q

4 20

15

Q1

2016

Q

2 20

16

Mill

ions

of D

omai

ns

Top 6 gTLDs ccTLDs All TLDs

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Perc

enta

ge

Gro

wth

Rat

e

Quarter

gTLDs ccTLDs (Without China) ccTLDs + gTLDs (Without China)

Source: Zook data

Source: Zook data

7

Global top-level domain growth (excluding .cn) - Detailed dataOver the past six quarters, gTLDs have continued to experience modest, yet positive growth, while ccTLDs have been living with negative growth. Growth rates for ccTLDs, excluding China, have declined to less than zero over the past six quarters, suggesting a possible reversal of fortune for these domains as new widely-available gTLDs crowd the market.

Note: We have removed .cn from this analysis due to a change in registration rules within China’s .cn domain in 2010 that resulted in sudden and dramatic growth, then a drastic decline in registrations. This anomalous activity would result in confusing data for presentation.

gTLDs ccTLDs (Without China) ccTLDs and gTLDs (Without China)

Q1 2010 2.98% 3.61% 3.21%Q2 2010 2.32% 3.23% 2.66%Q3 2010 2.15% 3.06% 2.49%Q4 2010 2.02% 3.32% 2.51%Q1 2011 2.82% 3.87% 3.21%Q2 2011 1.75% 2.97% 2.21%Q3 2011 2.01% 2.95% 2.37%Q4 2011 1.69% 4.00% 2.58%Q1 2012 2.41% 3.67% 2.90%Q2 2012 1.19% 5.01% 2.70%Q3 2012 0.79% 3.05% 1.70%Q4 2012 0.65% 3.48% 1.81%Q1 2013 1.39% 3.36% 2.21%Q2 2013 0.63% 2.75% 1.52%Q3 2013 0.86% 2.88% 1.72%Q4 2013 0.79% 1.89% 1.27%Q1 2014 1.44% 2.49% 1.89%Q2 2014 0.26% 0.88% 0.53%Q3 2014 0.49% 2.10% 1.19%Q4 2014 0.29% 2.13% 1.10%Q1 2015 0.93% -0.57% 0.26%Q2 2015 0.13% -0.78% -0.28%Q3 2015 0.97% -0.69% 0.24%Q4 2015 3.22% -0.41% 1.64%Q1 2016 2.46% -0.24% 1.30%Q2 2016 0.39% -0.80% -0.11%

8

Top six [legacy] gTLDs – market share

The top 6 gTLDs and ccTLDs have nearly all domain maket-share globally – with ccTLDs taking just over 45 per cent of the market.

The top six legacy gTLDs, (.com, .net, .org, .mobi, .info, .biz),continue to represent more than 99 per cent of total gTLDs, and 54 per cent of all registered TLDs. All, but .mobi, have seen an increase in growth. With the introduction of more than 1,000 new gTLDs in the market over the last 18 months, however, three in the top six (.mobi, .info and .biz) no longer dominate the TLD market. The gTLD leader by far continues to be .com. Even with new competition, desire for .com domains remains high and its growth is steady. Investors are particularly interested in snapping up .com domains as an asset hold, with availability becoming scarcer.

Top 3 gTLDs

With 130,265,726 registered domains, .com continues to be the most popular TLD in the world. The second most popular domain, .net, has 16,130,302 registered domains, 7.5 times fewer than .com.

0%

10%

20%

30%

40%

50%

60%

70% Q

1 20

10

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

% M

arke

t Sh

are

Top 6 gTLDs ccTLDs

Source: Zook data

9

Top 20 ccTLDs

ccTLD Country Last Period Domain Countcn China 19,502,493tk Tokelau 19,242,447de Germany 16,126,473uk United Kingdom 10,679,523nl Netherlands 5,643,201ru Russian Federation 5,245,491br Brazil 3,869,791eu European Union 3,815,601au Australia 3,035,915it Italy 2,960,676fr France 2,943,299pl Poland 2,712,473ca Canada 2,484,422in India 2,114,209co Colombia 2,018,450ch Switzerland 2,005,411es Spain 1,819,818us United States 1,680,153be Belgium 1,549,082jp Japan 1,431,769

Among ccTLDs, .cn and .tk continue to lead the industry. .tk is the ccTLD for Tokelau, a territory of New Zealand that has a population of approximately 1,400. The tremendous popularity of .tk is due to the fact that there are no residency requirements to register a .tk domain name, and .tk domain names are offered for free (for the first year) with minimal restrictions. As previously mentioned, registration trends for .cn should be treated with caution, given market disruptions caused by registration rule changes.

Germany’s ccTLD, .de, follows third with 16,126,473 domains under management. CIRA holds a strong market position, ranking 13th globally.

10

THE BRAVE WORLD OF NEW GTLDSMore than a thousand new gTLDs were approved by ICANN and entered the market starting in 2014. This represented one of the most significant changes in the domain industry since its inception in 1984. Within the past 18 months, more than a thousand new gTLDs have been introduced, topping 23 million registrations worldwide.

New gTLDS, top ranking by registration

Ranking New gTLD Domains1 .xyz 6,602,6392 .top 4,500,9883 .win 1,279,0524 .wang 1,043,8005 .club 868,4756 .bid 558,7847 .site 552,2528 .vip 525,0569 .online 504,155

10 .loan 449,54411 .link 378,55512 .xin 336,11213 .ren 320,69114 .red 320,30815 .gdn 304,47816 .tech 277,10117 266,28418 .click 229,59919 .science 222,90420 .space 199,51721 .website 196,32122 .kiwi 187,23323 .date 147,03024 .trade 142,56825 .racing 142,030

Source: https://ntldstats.com/tld

Among new gTLD offerings, .xyz leads with over six million registered domains, representing nearly 25 per cent market share among new gTLDs. The Registrar for .xyz initially offered these domains for free, creating early momentum. Also in the lead are .top, which has over four million registered users (17 per cent market share) and .win, with over one million registered domains (5 per cent market share).

Municipal domains experienced some early success, with .berlin, .london and .nyc initially ranking among the top 10 new gTLDs in 2015. They have since been knocked out of the top spot by other new entrants that have heavy marketing arms behind them, such as .win, .club and .vip. With competition ever-increasing, .nyc has dropped to 34th place, .london to 48th and .berlin is now in 49th position among new gTLDs. From Canada, .quebec is in the top ten list of municipal domains with 9,400 registrants. This is not to say that these are not successful businesses. These domains have found successful niche markets and have created models that work for their own geographies. The new gTLD program was party about

increasing the number of choices open to Internet users and the geographic domains are a great example of that in action.

https://ntldstats.com/tld

11

Canadians’ awareness of new gTLDsThe general population of Internet users in Canada are becoming aware of these new gTLDs. Awareness during the first year of the launch of new gTLDs was as expectedly low. Recently awareness has risen likely due to increases in advertising and launches of new domains over the last year. However, the interest in registering one of these new domains remains modest outside the domain industry itself.

Interest in new gTLDs

41%

46%

13% Yes, I am aware of these new domains (gTLDs)

No, I have not heard of these new domains (gTLDs)

Don't know/Not sure

19%

3%

15%

26%

43%

70%

1%

11%

TOTAL INTERESTED

Very interested

Somewhat interested

Not very interested

Not interested at all

TOTAL NOT INTERESTED

I already have

Don’t know/Not sure

Base: Canadian Internet users

Source: CIRA tracking research 2016

Base: Internet users aware of new gTLDs


12

GLOBAL INTERNET ACCESS AND USEAlthough more than three billion people are now connected to the Internet, there remains a huge divide between rich and poor nations. Nearly half of the global population is not connected to the Internet, however the growth in Internet users has come in large-part from developing countries.

The International Telecommunications Union (ITU) estimates more than 84 per cent of households in the developed world have Internet access, compared with approximately 41 per cent of households in the developing world. This percentage has quadrupled since 2006, when, fewer than 10 per cent of those in developing countries claimed to have Internet in the home.

Individuals using the Internet global by level of development (in millions)

Innovative delivery models, including investments in mobile infrastructure, are triggering huge growth in Asia and Africa, where the majority of people have traditionally lacked access. Internet penetration is now growing at a rapid pace in the developing world, where last year, connectivity more than tripled.

753

1,023

808

2,465

1,561

3,488

2008

2016

Total Developing Developed

Source: International Telecommunications Union

13

Households with Internet access by level of development

Active mobile-broadband subscriptions per 100 inhabitants Internet users across the globe are increasingly employing mobile technology to connect. Ninety per cent of people in the developed world and 40 per cent of people in the developing world subscribe to mobile broadband.

83.8

52.3

41.1

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

%

Developed World Developing

90.3

49.4

40.9

0 10 20 30 40 50 60 70 80 90

100

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Per

100

inha

bit

ants

Developed World Developing


*2016 is projected data


*2016 is projected data

14

Global Internet penetration

Country 2014 2015

Bermuda 96.8 98.32

Falkland (Malvinas) Is. 97.60 98.31

Iceland 98.16 98.20

Luxembourg 94.67 97.33

Andorra 95.90 96.91

Norway 96.30 96.81

Liechtenstein 95.21 96.64

Denmark 95.99 96.33

Faroe Islands 93.30 94.20

Bahrain 90.50 93.48

Monaco 92.40 93.36

Japan 89.11 93.33

Netherlands 93.17 93.10

Qatar 91.49 92.88

Finland 92.38 92.65

United Kingdom 91.61 92.00

United Arab Emirates 90.40 91.24

Sweden 92.52 90.61

Korea (Rep.) 87.87 89.90

Aruba 83.78 88.66

Canada 87.12 88.47

Estonia 84.24 88.41

New Zealand 85.50 88.22

Taiwan, Province of China 83.99 87.98

Switzerland 87.40 87.97

Germany 86.19 87.59

Belgium 85.00 85.05

Slovakia 79.98 85.02

15

Global Internet penetration continued

Country 2014 2015

Hong Kong, China 79.87 84.95

France 83.75 84.69

Australia 84.00 84.56

Austria 81.00 83.93

Singapore 79.03 82.10

Kuwait 78.70 82.08

Czech Republic 79.71 81.30

Ireland 79.69 80.12

Puerto Rico 76.13 79.47

Latvia 75.83 79.20

Israel 75.02 78.89

Spain 76.19 78.69

Bahamas 76.92 78.00

Macao, China 69.78 77.60

Azerbaijan 75.00 77.00

Cayman Islands 74.10 77.00

Malta 73.17 76.18

Barbados 75.16 76.11

Anguilla 70.39 75.98

St. Kitts and Nevis 68.00 75.70

United States 73.00 74.55

16

CANADA’S INTERNETAs noted in the previous ranking, Canada continues to be among the most wired countries in the world with an 89 per cent penetration rate in 2016. As many in Europe and across the G8 deploy more fibre and mobile options, however, Canada experienced a drop in international rankings.

Connectivity Type Quantity

Fixed-telephone subscriptions per 100 inhabitants 44%

Mobile-cellular telephone subsriptions per 100 inhabitants 82%

International Internet bandwidth per Internet user 135,496

Percentage of households with a computer 85%

Percentage of households with Internet access 87%

Percentage of individuals using the Internet 89%

Fixed (wired)-broadband subscriptions per 100 inhabitants 36

Active mobile-broadband subscriptions per 100 inhabitants 56


Mobile broadband penetration

Sub

scrip

tions

per

10

0 in

hab

itant

s

Total (where breakdown not available) Dedicated mobile data subscriptions Standard mobile broadband subscriptions

150

125

100

75

50

25

0

Belgium

Greece

Spain

Colombia

New Ze

aland

Austra

lia Italy

Franc

e

Switz

erlan

d

Canad

a

Polan

dChil

ie

Netherl

ands

Portu

gal

Mexico

German

y

Austria

Finlan

d

Icelan

d

Swed

en

Turke

y

Norway

United

State

sOEC

D

Slova

k Rep

ublic

Slove

nia

Denmark

Hungary

Czech

Repub

licLa

tvia

Korea

Esto

niaJap

an

Luxe

mbourgIre

land

United

Kingdom

Israe

l

Source: Organization for Economic Cooperation and Development

17

Mobile prices in Canada are notoriously expensive and recent OECD data shows that Canada lags behind most of its OECD counterparts in terms of mobile broadband penetration (28th position).

Understanding Canada’s digital divide

Canada is one of the most connected countries on the planet, but connectivity within Canada is not equally dispersed. There are several persisting divides that exist across the country.

In April of 2016 CIRA released the first report from the newly launched Internet Performance Test, a crowdsourced set of data on Canada’s Internet performance.

After collecting over 100,000 tests the program reported an average download speed of 18.86 Mbps and an average upload speed of 7.26 Mbps.

The data also showed a disparity between urban and rural connectivity.

Region Download speed (average Mbps)*

Upload speed (average Mbps)*

National 18.86 7.26

Urban 19.80 7.66

Rural 14.81 5.96

*Data is from April 2016. It is important to note that since this data is crowdsourced, it includes only users with some connection speed and the distribution of the sample is not perfectly random.

In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) held a marathon set of public hearings with a mandate to review what constitutes basic telecommunications services, understanding that “reliable, affordable and modern telecommunications services are now important for daily activities, such as health care, banking, education and government services.”

The Government of Canada has earmarked $500 million over five years to implement a national broadband strategy, indicating that it will prioritize underserviced parts of the country.

18

Broadband availability at a glance

Download speed (Mbps)

Large population centers

Medium population centres

Small population centres

Rural areas

HSPA+ and LTE

1.5-4.9 100% 100% 100% 87% 11%

5–9.9 100% 100% 99% 75% 11%

10–15.9 99% 98% 93% 37% 0%

16–24.9 99% 98% 88% 32% 0%

25–29.9 99% 97% 83% 29% 0%

30–49.9 99% 96% 80% 28% 0%

50–99.9 97% 95% 73% 26% 0%

100+ 96% 93% 69% 25% 0%

Small population centres: 1,000 and 29,000. Medium population centres: 30,000 and 99,999Large population centres: greater than 100,000 Rural areas: less than 1,000 or fewer than 400 people per square kilometre.

CRTC data for 2014 shows that broadband speeds of up to 5Mbps are available universally in urban centres. Just 87 per cent of Canadians in rural areas have the same access. At higher speeds, the discrepancy in access is more pronounced. All urban dwellers have access to up to 10 Mbps download speeds, but just 75 per cent of rural occupants have the same access. In cities, 96 per cent of users have access to speeds of 100Mbps, while only one quarter of rural users have this option.

Importance of high-quality/ high-speed Internet

91%

2%

95%

1%

0% 20% 40% 60% 80% 100%

Total Important

Total not important

High quality High speed

Source: Industry Canada and CRTC data collection


19

Canadians place a high-value on their Internet connection’s speed and performance, with near universal agreement that Internet quality and performance were important.

Three quarters (73%) of Canadians would go as far as to say that they would be unlikely to purchase a home that does not have access to high speed Internet, with more than half (54%) saying that they would be “very unlikely” to do so.

Would you purchase a home without access to high-speed Internet?

11% are likely to buy 73% are unlikely to buy

Annual growth of fibre subscriptions, June 2014 to June 2015

There is some indication that users would like to see more competitive rates. Only half of Canadians feel they are getting good value for money from their monthly Internet service packages. The majority (62%) say they would consider switching Internet Service Providers (ISPs). Despite this, among Canadians who are aware of their data packages, 78 per cent are satisfied with the service they receive.

180

160

140

120

100

80

60

40

20

0

-20

%

Belgium

GreeceSp

ain

Colombia

New Ze

aland

Austra

lia Italy

Franc

e

Switz

erlan

d

Canad

a

Polan

dChil

ie

Netherl

ands

Portu

gal

Mexico

German

y

Austria

Finlan

d

Icelan

d

Swed

en

Turke

y

Norway

United

State

sOEC

D

Slova

k Rep

ublic

Slove

nia

Denmark

Hungary

Czech

Repub

licLa

tviaKorea

Esto

niaJap

an

Luxe

mbourgIre

land

Canadians pay among the highest rates in the OECD for mobile broadband

20

Canadians’ satisfaction with home Internet connection speed and bandwidth

Canadian Internet users are generally satisfied with Internet connection speeds in their homes. More than 80 per cent of those surveyed said they’re satisfied, although just 34 per cent claim to be very satisfied with connection speeds.

Over three-quarters (78%) are satisfied with Internet bandwidth included in their home package and half are ‘very satisfied’ with the amount of data.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Tota

l sat

isfied

Very s

atisfi

ed

Somew

hat s

atisfi

ed

"Neit

her s

atisfi

ed no

r diss

atisfi

ed

Somew

hat d

issat

isfied

Very d

issat

isfied

Tota

l diss

atisfi

ed

Don’t

know

Internet speed Internet bandwidth


21

INTERNET USE IN CANADA Global online Internet activity and engagement

Canadians are among the most engaged users in the world. According to comScore, Canadians spend more hours online (36.7 per month) than anyone else in the world. Canadian desktop users are also among the most diverse, seeking out an average of 3,238 unique web pages per month.

Device used most often to access the Internet

The majority of Canadians still use a desktop or laptop computer to access the Internet (67%), but those between 18 and 34 are less likely to do so (54%). 41 per cent of Canadian Internet users between 18 and 34 report using a mobile phone to access the Internet most often.

Device Age

All respondents 18-34 35-54 55+Desktop/laptop computer 67% 54% 67% 76%

Smartphone/Mobile 21% 41% 21% 6%Tablet (iPad, etc.) 12% 5% 11% 17%

TV 1% 1% 1% -

Desktop/laptop computer

66%

Smartphone/Mobile

21%

Tablet (iPad, etc.) 12%

TV 1%


22

How Canadians use the Internet – video, audio and common online activities

Email continues to be the number one online activity for Canadians, with most (92%) citing this as a frequent reason for accessing the Internet. Other popular uses include banking (68%), social media (59%) and reading about news or current events (55%). Almost half of all Canadians are now browsing for goods (49%) and shopping online (49%). Among younger Canadians,(18–34 years-old), most watch movies, TV, and video online (59%).

Percentage of Canadians undertaking online activities

Email continues to be the number one online activity for Canadians.

92%

68%

59%

55%

49%

46%

43%

41%

39%

36%

32%

30%

30%

28%

25%

24%

24%

20%

18%

17%

12%

12%

9%

7%

6%

5%

1%

Email

Banking

Social media

For news/current events

General browsing/surfing

Shopping

Product research

Looking for information related to hobbies/interests

Travel research

Watching movies, TV. Videos, etc.

Instant messaging

Looking for health/medical information

Listening to music/radio/podcasts

Looking for dining options/restaurant reviews, etc.

Gaming

Research for your job or business

Downloading

Telephone/video chat

Editing/sharing photos

Job hunting

Online courses/training/education

House/apartment hunting

Selling products or services

Research for school

Creating content

Dating/meeting people

Other


23

Mobile versus computer activities

ComScore, a major analyst of the digital media market, confirms that smartphone use in Canada continues to grow, with penetration reaching 81 per cent, a six point increase over the previous year.

ComScore also points out that Canadians use smartphones differently than they would desktop technology. The smartphone is the tool of choice for instant messaging (86%), gaming (80%) and social media (69%). Desktops are still used more often for entertainment (57%), online retail (60%) and finding directories or other resources (58%).

Four out of five Canadian mobile phone users now employ a smartphone, according to comScore

14%

20%

31%

57%

58%

60%

61%

68%

86%

80%

69%

43%

42%

40%

39%

32%

0% 20% 40% 60% 80% 100%

Instant Messengers

Games

Social Media

Entertainment

Directories/Resources

Retail

Lifestyles

News/Information

Desktop Mobile

Source: comScore digital future in focus 2015

24

Number of Internet-connected devices in Canadian homes

Smartphones are not the only devices taking over Canadian homes. Nine per cent of Canadians report having 10 or more Internet-connected devices in their household, a number that is likely only to rise with the proliferation of smart-home technology and applications.

Hours spent listening to radio or music online

Canadians have embraced online audio products with 68 per cent of Canadians reporting that they listen to online audio of some kind daily.

1% 11%

13% 14%

15% 12%

11% 7%

5% 2%

9% 1%

0 1 2 3 4 5 6 7 8 9

10 or more Don't know

Num

ber

of d

evic

es

31%

34%

18%

8%

4%

3%

1%

<1%

<1%

1%

None

Less than 1 hour

1–2

3–4

5–6

7–8

9–10

11–12

More than 12 hours

Don't know

Num

ber

of d

evic

es



25

Percentage of population streaming online video

Hours per day Age

All respondents 18–34 35-54 55+

None 21% 7% 20% 33%

Less than 1 hour 22% 18% 24% 24%

1–2 25% 32% 26% 19%

3–4 17% 21% 17% 13%

5–6 8% 12% 6% 7%

7–8 3% 5% 4% 2%

9–10 1% 2% 1% 1%

11–12 1% 1% 1% 0%

More than 12 hours 1% 2% 1% 1%

Don't know 1% 1% 1% 0%

Source: CIRA trackingBreakdowns by age will have a lower base.n=1,180

Canadians are big viewers of online video, with a quarter of all users streaming one-two hours per day. But age matters. Among young Canadians (18–34), 92 per cent stream video daily, while only two-thirds (67%) of adults over 55-years-old use the Internet to access video content. One-fifth of Canadians don’t stream video online.

21%

22%

25%

17%

8%

3%

1%

<1%

<1%

1%

None

Less than 1 hour

1–2

3–4

5–6

7–8

9–10

11–12

More than 12 hours

Don't know

Num

ber

of d

evic

es


26

Younger adults are also spending more hours streaming online. More than a third (32%) of young adults and nearly one-fifth (19%) of those over 55 watch one-to-two hours per day. Twenty-one per cent of young adults watch up to four hours daily, while just 13 per cent in the older age group stream this much content.

Population’s time spend watching online videos Canada vs. U.S.

Canada versus American online video habits

Cord cutting in Canada

As online content becomes readily available, some Canadians are cutting the cord on cable. 76 per cent of Internet users continue to subscribe to cable or satellite television. Those 55+, however, are much more likely than those 18–34 years old to subscribe to cable (89% versus 58%). Young adults are also more likely to consider cutting cable in the future, with 37 per cent saying this is a consideration, compared to the average of 24 per cent. Among all subscribers, 30 per cent say it is likely they will cancel their cable package in the next three months.

Of non-cable subscribers, more than half (55%) said the availability of online material played a role in their decision not to subscribe.

Compared to users in the U.S., Canadians are more likely to be streaming video online. The average Canadian viewer spends 1,476 minutes per year streaming online video. According to research by comScore, Canadians on average watch 5.1 more hours of video per month than their American counterparts.

Canada US

Minutes per viewer

1476 1170

% of total population

73 64

The average Canadian viewer spends 1,476 minutes per year streaming online video.

27

Have cancelled cable in the last 12 months

Considered cancelling cable due to the availability of online TV, movie,

video content

Currently subscribe to cable

Canadian Internet users who subscribe to Netflix

Yes 19%

No 79%

Don't know 2%

Yes 26%

No 70%

Don’t know 4%

Yes 76%

No 23%

Don't know 1%

Yes 38%

No 61%

Don't know

1%

Base: Canadian Internet Userswho do not subscribe to cable


Base: Canadian Internet UsersSource: CIRA tracking research 2016

Base: Canadians who subscribe to cable Source: CIRA tracking research 2016

Base: Canadian Internet users Source: CIRA tracking research 2016

28

Considering canceling cable in the next 3 months Age


Total likely 30% 25% 32% 30%

Very likely 7% 19% 25% 24%

Somewhat likely 23% 19% 25% 24%

Neither likely nor unlikely 25% 29% 27% 17%Somewhat unlikely 24% 28% 20% 25%

Very unlikely 17% 14% 18% 19%Total unlikely 41% 42% 38% 44%Don’t know 5% 4% 3% 8%

Use of VPN by Canadian Netflix subscribers

Age


Yes 16% 21% 17% 7%

No 71% 68% 70% 77%

Don't know 13% 10% 13% 16%

Source: CIRA trackingBreakdowns by age will have a lower base.

n=453

Canadians are willing to tread into some grey areas to access the online content Canadians are willing to tread into some grey areas to access the online contentthey want. Almost four-in-ten (38%) Internet users say they subscribe to Netflix.Among Netflix subscribers, 16 per cent admit to using DNS masking or a VPN inorder to access Netflix or other online content only available outside the country.DNS masking is highest among 18–34 year olds (21%), those with children under 18in household (24%) and men (23%).

Canadians are willing to tread on some legal grey areas to access the online content they want.

29

Do Canadians love online Can-con? Extent to which Canadians seek out Canadian online content Canadians have some concern for where their content is produced. Few (14%) often seek out Canadian content online, but 60 per cent of users that watch online movies, video and TV at least occasionally seek out Canadian content.

Age


Total always/often 14% 14% 18% 10%

Always/every time 3% 3% 3% 2%

Often/almost every time 12% 11% 15% 8%

Occasionally/sometimes 46% 46% 46% 48%Almost never 21% 23% 20% 20%

Never 11% 7% 10% 16%Total almost never/never 32% 30% 30% 36%

Don't know 7% 11% 7% 5%

Source: comScoreBreakdowns by age will have a lower base.n=949

60% of Internet users that watch TV/movies/video online at least occasionally seek out Canadian content.

30

Canadians and .CA Registration of.CA domain names is restricted to those with a connection to Canada – either through citizenship, business incorporation, or permanent residency. As such, CIRA tracks closely how the Canadian Internet community perceives the .CA domain.


Base: .CA Registrants

CIRA’s .CA customers overwhelmingly see .CA as a critical resource for Canadians. CIRA continues to carry a public mandate to ensure that .CA is a viable online home for Canadian online businesses, ideas, and ventures that also contributes to the larger project of building a better online Canada.

.CA registrant customer satisfaction

Year % Excellent/Good (8–10)

2016 63%

2015 69%

2014 66%2013 69%2012 62%2011 66%


91%

66%

0% 20% 40% 60% 80% 100%

Total Important

Very Important

31

.CA is in a somewhat unique position to other ccTLDs. The domain market in North America is more dominated by .com than other markets (given the proliferation of .com, in the United States). However, .CA has taken market-share from .com over the past decade or so, and now accounts for 31% of all domains registered in Canada. CIRA continued to monitor this closely, as recent quarters show some reversal in this trend.

Source: Zook data

.CA growth

Source: Zook data

0%

10%

20%

30%

40%

50%

60%

70%

Q1

200

8 Q

2 20

08

Q3

200

8 Q

4 20

08

Q1

200

9 Q

2 20

09

Q3

200

9 Q

4 20

09

Q1

2010

Q

2 20

10

Q3

2010

Q

4 20

10

Q1

2011

Q

2 20

11

Q3

2011

Q

4 20

11

Q1

2012

Q

2 20

12

Q3

2012

Q

4 20

12

Q1

2013

Q

2 20

13

Q3

2013

Q

4 20

13

Q1

2014

Q

2 20

14

Q3

2014

Q

4 20

14

Q1

2015

Q

2 20

15

Q3

2015

Q

4 20

15

Q1

2016

Q

2 20

16

Perc

ent

Mar

ket

Shar

e

com Market Share net Market Share org Market Share info Market Share biz Market Share ca Market Share

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

ca ccTLDs (Excluding China)

32

As previously described, the introduction of 1000+ new gTLDs into an already mature domain market has led to declines in growth across the domain industry. However, CIRA has continued to outpace the global ccTLD growth rates for the past six quarters.

How Canadians use .CAThe .CA team has worked hard to position the .CA domain as a safe, secure, stable, and unquestionably Canadian alternative to other generic domain options.

When asked why they chose .CA domains, there are a variety of responses from “I’m Canadian/ I live in Canada” (24%), to “.com was taken” (9%).

Base: .CA RegistrantsSource: CIRA tracking research 2016

.CA versus .com for business/personal use

Base: Internet users, SMEs, CIRA members and registrants Source: CIRA tracking research 2016

24% 19%

10% 9%

8% 5% 5%

4% 3%

0% 10% 20% 30%

I'm Canadian/I live in Canada Canadian business/for use by Canadians

Canadian presence/identity It's Canadian

.com was taken Trademark protection

It was available Preference/wanted .CA

Pride in Canada

43%

34%

33%

47%

0% 20% 40% 60% 80% 100%

Personal

Business

.ca .com

33

While .com remains the domain of choice for many businesses, for businesses working within Canada, .CA presents a compelling option.

.CA also provides an interesting opportunities for Canadian businesses online. Unequivocally, Canadians have stated they prefer to support Canadian businesses where possible; and they have an affinity for businesses using a .CA, which easily identifies them as Canadian.

Among Internet users in Canada:

Within Canada, .com remains the most popular choice for those registering their domain for business, while .CA is the top choice for personal use.

79% prefer to support Canadian businesses

68% agree that Canadian businesses should use .ca

60% prefer .ca websites because they are Canadian

34

CYBERSECURITY AND INTERNET TECHNOLOGY

There has been no shortage of major incidents of cyberattacks to help bring the issue to the front pages of the international news.

CIRA has long been an advocate for strong and progressive cybersecurity protections and is one of the major advocates in Canada for both DNS security and emerging standards that would support the secure transfer of online data (DNSSEC). To this end, CIRA’s tracking research examined Canadians perceptions on several areas of digital and data security.

Awareness of cyberattacks against organizations or companies

Awareness of cyberattacks is split in Canada, with only 42 per cent of Internet users reporting that they had heard of an attack. Of those who were aware of an attack, incidents involving companies Target, Sony, and Home Depot topped the list. Government agencies (or general mentions of “government”), were also highlighted.

Akamai, a company that monitors the incidence of DDoS attacks quarterly, point to a 71 per cent increase in the DDoS attacks year of year and a 138 per cent increase in attacks over 100 Gbps.

Yes 42%

No 41%

Don't know 17%



https://www.akamai.com/us/en/multimedia/documents/state-of-the-internet/q3-2016-state-of-the-internet-security-report-infographic.pdf

35

Awareness of companies that experienced a cyberattack

67 per cent of respondents were concerned about their personal information given cyberattacks. Importantly, this concern carries genuine business and reputational risk. 47 percent of respondents indicated that they were unlikely to make a purchase from an online retailor following a cyberattack. Non-profit organizations are also at risk, with 48 per cent or respondents stating that were unlikely to make an online donation following a breach.

31%

17%

15%

10%

9%

9%

7%

6%

6%

4%

Target

Sony

Home Depot

Ashley Madison

Canada Revenue Agency/Revenue Canada/

Canadian Government/Federal Government

Government (general)

Walmart

Banks/Financial institutions (general)

Winners

Base: Canadians aware of cyberattacks


36

Level of concern about cyberattacks against organizations that may have access to your personal information

Likelihood that you will continue to make purchases from an online retailor or business following a cyberattack

67%

24%

44%

20%

8%

2%

10%

2%

TOTAL CONCERNED

Very concerned

Somewhat concerned

Neutral

Not very concerned

Not concerned at all

TOTAL NOT CONCERNED

Don’t know

20%

4%

16%

26%

30%

17%

47%

7%

TOTAL LIKELY

Very likely

Somewhat likely

Neither likely nor unlikely

Not very likely

Not likely at all

TOTAL NOT LIKELY

Don’t know

Canadians aware of cyberattacks


Canadians aware of cyberattacks


37

Likelihood of making donations to a not-for-profit organization or charity following a cyberattack

Supporting the Canadian Internet Community

There is some modest concern in Canada about the sovereignty of Canadian data, given the traditional dominance that the American market has in cloud-based services and Internet technology. This concern has likely increased post-Snowden, but many Canadians remain either un-aware or un-concerned about their personal data and personal privacy. Only a third of Canadians are aware that Canadian infrastructure runs through the US or that many cloud services store their data in the US. This can likely be explained by the relative naiveté of most Internet users to the Internet’s actual operations and architecture.

19%

3%

16%

25%

24%

24%

48%

8%

TOTAL LIKELY

Very likely

Somewhat likely

Neither likely nor unlikely

Not very likely

Not likely at all

TOTAL NOT LIKELY

Don’t know

Of those Canadians who are aware of these issues 64 per cent are concerned about their data.

Base: Canadians aware of cyberattacks


38

Awareness that some Canadian Infrastructure runs through the US

Awareness that many Canadian cloud services store data in the US

Yes 29%

No 59%

Don't know 12% Yes

33%

No 56%

Don't know 11%

Level of concern for privacy/security of personal data that is routed through the US

64%

29%

36%

20%

9%

3%

11%

4%

TOTAL CONCERNED

Very concerned

Somewhat concerned

Neutral

Not very concerned


TOTAL NOT CONCERNED

Don’t know



Base: Canadian Internet users aware that infrastructure flows through the US.


39

The security of the Internet of Things The Internet of Things is an emerging area of concern for security experts. The recent cyberattack against DNS provider Dyn has been traced to Internet-connected devices.

Of those Canadians who are aware of Internet of Things technology (only 31 percent), two-thirds are concerned about the security implications of these devices. This level of concern correlates positively with age, where those over 55 are much more likely to be concerned than those 18–34.

66%

25%

40%

20%

6%

1%

8%

6%

TOTAL CONCERNED

Very concerned

Somewhat concerned

Neutral

Not very concerned


TOTAL NOT CONCERNED

Don’t know

Age


Total Concerned 66% 51% 64% 79%

Very concerned 25% 16% 22% 36%

Somewhat concerned 40% 36% 42% 43%

Neutral 20% 30% 19% 13%Not very concerned 6% 9% 7% 3%Not concerned at all 1% 2% 1% 1%Total not concerned 8% 11% 9% 5%

Don’t know 6% 8% 8% 3%

Base: Canadian Internet users aware of the Internet of Things


40

About this report CIRA’s Internet Factbook is produced with data collected from a study by the Strategic Counsel as part of CIRA’s annual Internet Tracking study. Data were collected using an online panel methodology. A total of n=1,200 adult Canadian Internet users and n=350 SME decision-makers completed an online survey in February, 2016. Additional data on Canada’s Internet and trends in digital behaviour can be downloaded at cira.ca/factbook.

About CIRA The Canadian Internet Registration Authority (CIRA) manages the .CA top-level domain on behalf of all Canadians. A Member-based organization, CIRA also develops and implements policies that support Canada’s Internet community, and represents the .CA registry internationally

http://cira.ca/factbook

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