OTTAWA – With 2005 results already rolling in and showing strong radio performance among publicly traded private broadcasters, Statistics Canada today released its compiled 2004 figures.
Click on the links to check out the ’05 performances of Corus, CHUM, Astral, Rogers and Newcap.
However, back in ’04, the air time sales of commercial radio broadcasters increased 3.3% to $1.2 billion in the broadcast year, ended August 31, 2004, that’s off the pace set in 2003 which saw a growth rate of 8.4%.
For the first time since 1999-2000, the advertising revenue of radio broadcasters grew at a slower pace than the overall advertising market (+5.4%).
Despite the dip in ad time sales, profits stayed healthy. Radio stations realized $0.179 of profits before interest and taxes for every dollar of revenue in 2004, slightly less than the 18.8 cents generated in 2003, but still above the levels realized in the previous 10 years.
FM, of course, continued to lead, while AM remained on its slow slide. The 4.9% increase of air time sales by FM stations in 2004 offset the 1.3% decline of air time sales by AM stations (which is the underlying reason why so many AM stations have gotten FM licenses and switched). FM radio also accounted for close to 98% of the $223.1 million of profits before interest and taxes generated by the industry in 2004.
The number of AM stations continue to fall and stood at 189 in 2004, down from 240 only five years earlier. There are signs that the rationalization is yielding results, too. Revenue per station surpassed the 1989 historical high of $1.45 million in 2003 and continued climbing in 2004 to reach $1.6 million. AM radio stations have also generated modest profit before interest and taxes in 2003 and 2004 (1.6% and 1.8% of revenues) after having incurred losses every year since 1990, says the release.
Radio broadcasters in larger markets continued to outperform those in smaller markets. The sale of air time by stations in the top five census metropolitan areas (CMAs) advanced 4.4% to $577.8 million. At the other end of the spectrum, the air time sales of stations operating outside CMAs reached $317.4 million, up just 1.1% compared to 2003.
Large market stations were also more profitable, with a profit margin before interest and taxes of 21.9% in 2004, compared to 14.9% for stations in medium-sized markets and 13.4% for those in small-sized markets. Calgary was the most profitable large radio market for the seventh consecutive year, with an average profit margin of 26.6% in 2004. Toronto was a close second at 25.3%, moving ahead of Ottawa-Gatineau on the list of most profitable large radio markets.
When it comes to language, ethnic and Native radio was the fastest growing segment of the industry with a 5.2% increase in air time sales, followed by English (4.0%), while French language broadcasters dipped a tiny bit -0.1%
The ethnic and Native radio segment was also the only one to improve its profit margin. From 6.9% of revenues in 2003, the profit before interest and taxes of this segment jumped to 10.6% of revenues in 2004, a result comparable to the 11% margin achieved by the French language segment. The profitability of ethnic and Native radio however remained well below that of its English language counterpart (19.6%).
