OTTAWA – Operating revenues at Canada’s private radio broadcasters saw their first decrease in five years in 2014, dropping 0.5% from 2013 to $1.6 billion, according to data released Tuesday by Statistics Canada.
In 2014, 98.5% of total operating revenues for private radio broadcasting were generated from the sale of advertising. Although the sale of local advertising totalled $1.1 billion, its contribution to the total advertising income of private radio broadcasting decreased in favour of national and network advertising. The local advertising market accounted for 67.7% of total operating revenues- its lowest contribution on record – compared with 30.8% for national and network advertising.
Operating expenses in 2014 rose 1.6% to $1.3 billion. The profit margin before interest and taxes fell from 20.3% in 2013 to 18.6% in 2014, and profits before interest and taxes totalled $300.4 million.
Quebec was the lone province to record a higher profit margin before interest and taxes in private radio broadcasting, as stations in that province saw their profit margin before interest and taxes increase from 15.9% to 18.2%, and profits before interest and taxes total $57.1 million.
Private radio broadcasters in Alberta had the highest profits in Canada in 2014, with a profit margin before interest and taxes of 22.2%. However, this was down from 24.5% in 2013. Ontario ranked second in total profitability with a profit margin before interest and taxes of 21.7%, down from 24.0% in 2013.
Saskatchewan, Manitoba and the region made up of British Columbia and the territories recorded the biggest decreases in profit margins before interest and taxes in 2014. Saskatchewan’s rate fell from 12.1% in 2013 to 9.4%, while in British Columbia and the territories, lower revenues and higher operating expenses pulled the profit margin before interest and taxes down from 18.3% to 13.7%.
Aside from Quebec, Manitoba was the only other province to record a gain in operating revenues, up from $61.0 million in 2013 to $61.6 million in 2014. However, a 6.0% increase in operating expenses caused profits before interest and taxes to decrease from $9.7 million in 2013 to $7.3 million in 2014.
In the Atlantic provinces, both operating revenues and expenses edged down 0.5%, while the profit margin before interest and taxes was unchanged at 15.1% in 2014.
The number of AM radio stations continued to decrease, albeit at a slower rate than during the period from 2008 to 2012, falling from 128 in 2013 to 126 in 2014. The profit margin before interest and taxes for the private AM radio sector decreased for a second straight year, falling to 4.6% in 2014, below the 5% mark for the first time since 2007. This decline was due to a 1.3% decrease in operating revenues, which fell from $294.5 million in 2013 to $290.7 million in 2014.
Operating revenues in the private FM radio sector dipped 0.3% to $1.3 billion in 2014. The sector's profit margin before interest and taxes fell from 22.8% to 21.6%, and profits before interest and taxes totaled $287.1 million.
The operating revenues of French-language radio stations rose 2.1% to $267.4 million, and the profit margin before interest and taxes increased from 14.2% to 16.5% in 2014, the largest increase since 2010. Conversely, operating revenues of English-language radio stations fell 1.1% to $1.3 billion, and the profit margin before interest and taxes decreased from 21.8% in 2013 to 19.1% in 2014.
Ethnic radio stations saw their profits before interest and taxes total $7.3 million, and the profit margin before interest and taxes rise from 11.3% in 2013 to 14.9% in 2014. This increase was attributable to 0.4% growth in revenues and a 3.7% decrease in operating expenses.
