OTTAWA – The Canadian television broadcasting sector saw total operating revenues fall 4.8% from to $7.1 billion in 2017, while profits before interest and taxes jumped 10.5% to $940.7 million in 2017 from the year prior, according to newly released data from Statistics Canada.
The lift in profits before interest and taxes is the result of a 6.8% decrease in operating expenses, which fell to $6.2 billion in 2017.
All revenue categories were down in 2017, continues the data. Air time sales dropped 4.9% to $3.0 billion last year while subscription revenues fell by 1.3% or $39 million over the same period, marking the first time that subscription revenues have fallen in the television broadcasting sector. Moreover, public and private subsidies were down 14.2%.
The private conventional television segment's share of operating revenues in the television broadcasting sector edged up in 2017. This segment generated $1.7 billion in operating revenue, accounting for 24.1% of the total operating revenues for the sector, compared with 23.8% in 2016.
Specialty television accounted for just over half of the market share (50.6%), with $3.6 billion in operating revenues, while public and non-commercial television (15.7%) and pay television (9.6%) accounted for the remaining share of operating revenues for the television broadcasting sector.
Operating revenues for the public and non-commercial television segment plunged 17.3% to $1.1 billion, while advertising sales for this segment declined 28.3% to $200.4 million.
Operating expenses for the public and non-commercial television segment were down 13.8% to $1.1 billion. In 2017, this segment had $688.1 million in programming expenses, down from $824.6 million in 2016. Sales and promotions fell from $135.5 million to $119.3 million.
The operating revenues of the specialty television segment were essentially unchanged from 2016 to 2017, while operating expenses dipped 0.9% and the profit margin before interest and taxes rose to 26.4%.
The pay television segment generated $107.7 million in profit before interest and taxes, bringing the gross profit margin to 15.7%.
Revenues from air time sales continue to fall
Air time sales for the Canadian television industry, the main component of revenue, fell 4.9% to $3.0 billion in 2017, continuing a downward trend that started in 2012. The private television (-3.4%) and public and non-commercial television (-28.3%) segments both saw their air time sales decline in 2017. Air time sales for the specialty television segment fell 1.7%, while sales in the pay television segment were up $1.1 million.
The private conventional television sector accounted for 52.8% of the market share of air time sales in 2017. By comparison, the market share of advertising sales for the specialty television segment was 40.6%, followed by the public and non-commercial television segment at 6.6%.
Private conventional television posts losses in every province
Total operating revenues for the Canadian private conventional television segment fell 3.8% to $1.7 billion in 2017. Operating expenses were down 4.3% to $1.8 billion, leading to losses of $100.8 million and a profit margin before interest and taxes of negative 5.9%.
In the Atlantic provinces, the losses totalled $14.5 million in 2017, compared with $16.3 million in 2016. A 4.4% decrease in operating revenues, combined with a 5.6% decline in operating expenses, explains these losses.
In Quebec, losses before interest and taxes totalled $11.0 million in 2017, compared with losses of $9.8 million in 2016. The increase was attributable to a 3.1% decline in operating revenues to $352.5 million, and a 2.7% decrease in operating expenses to $363.5 million.
In Ontario, operating revenues fell 4.1% to $776.7 million in 2017. Operating expenses declined 4.3% to $815.0 million, resulting in losses of $38.2 million.
Private conventional television stations in Western Canada recorded losses before interest and taxes of $37.0 million in 2017, compared with $45.8 million in 2016. Operating expenses fell 5.1% to $561.1 million and operating revenues were down 3.9% to $524.1 million.
