GATINEAU – Hockey and regulation, two things Canadians are well known for, thoroughly revealed their influence in statistics released today by the CRTC.
The headline, of course, was the massive revenue line. Revenues earned by Canadian specialty services, pay-TV channels and video on demand license holders surpassed $2.5 billion in the 2006 broadcast year, ended August 31, 2006, says the Commission data on the industry released today.
During the last year, this part of the electronic media industry saw the highest growth in its revenues as they rose by 12.4% as compared to 2005.
However, profits before interest and taxes (PBIT) totaled $572.7, just a 2.8% increase over 2005. That slight increase reflected a collective $249 million jump in expenses in 2006 over 2005. The PBIT margin reached 22.95%. That’s down from 2005’s 25.09% but above 2004’s 20%.
From 2005 to 2006, revenues from cable distribution increased by 10.5%, reaching $1.1 billion in 2006, while those from direct-to-home satellite distribution services (DTH) grew by 13% to $520.8 million. The balance of the total revenues of $2.5 billion includes $48 million from local advertising, $834 million from national advertising and $35 million from other revenues.
The largest share of the total revenues, $2 billion, was earned by the 136 Canadian specialty television services operating in 2006, while the remaining $482 million was earned by pay, pay-per-view and VOD services. Of specialties’ $2 billion, a whopping $1.8 billion came from the 49 analog services, $69.7 million from the 17 category one digital services and $123.3 million from the 70 category two digital services.
Spending on Canadian programming by specialty and pay television services reached $880.6 million in 2006. Of that amount, $149.3 million was spent on news programs, $211.6 million for other information programs, $221.2 million on sports programs, $162.3 million for drama, $41.1 million for musical and variety shows, and $61.1 million on general interest.
Finally, these services spent $290 million to acquire Canadian programs from independent producers.
Total spending on Canadian programming by the analog specialties alone was $784 million, a 24.4% increase over 2005.
The return of the National Hockey League for the 2005-06 season from its labour disruption the season before that is easily seen in the expense and revenue numbers of the largest three sports networks in Canada.
However, much of the new Cancon spending is due, of course, to mandated policy requirements. The January 2004 license renewals of many of the Tier III analog specialties saw them face new conditions of license requiring them to spend more on Canadian programming. For example, Teletoon’s previous condition of license said it had to spend a minimum of 40% of the previous year’s total revenues on Cancon. Its new license upped that to 47%.
So, in the 2006 broadcast year, Teletoon/Télétoon ended up spending $23.8 million on Canadian programming, a 31.7% increase over the prior year.
Other analog specialties were also given similar new conditions of license and have boosted their Cancon in a similar fashion.
Of the $190 million increase in spending on Cancon among the analog specialty channels, 55% of the increase came from just three: TSN, RDS and Rogers Sportsnet. They collectively spent $104 million more on Cancon in the 2006 broadcast year as compared to 2005. This was due of course to the return of NHL hockey, which was missing in 2005.
At the same time though, revenue at all three sports channels jumped substantially, as it went up about $78.5 million, collectively, to a total of $429.8 million. That also means that of the $2.5 billion in revenue pulled in by all 169 licensed specialty, pay, pay-per-view and VOD services in Canada, three of them account for over 17%.
As for people doing all the work, the Canadian specialty, pay, pay-per-view television and VOD services employed 5,264 people in 2006, and paid a total of $374.6 million in salaries. That’s an average salary of $71,155, an increase of 4.6% over the prior year and a 20% increase over the 2002 average.
