OTTAWA – Two years after the arrival of subscription satellite radio in Canada, the private commercial radio industry has shown no apparent ill effect as revenues continued to climb in 2007 according to numbers released by the CRTC today.
Total revenues for Canada’s AM and FM radio stations increased by 6.2% going from $1.4 billion in 2006 to $1.5 billion in 2007. When factoring in $1.16 billion in expenses, Canada’s radio stations enjoyed profits of $300.2 million, an increase of 5.5% or $15.7 million before interest and taxes.
The profit margin of 19. 99% is slightly below last year’s results of 20.11%, which was the third highest profit margin according to Statistics Canada in the last 40 years after the 21.14% and 20.5% margins posted in 2005 and 1971 respectively.
The CRTC says the profits are directly linked to an increase in advertising revenue. From 2006 to 2007, local advertising revenues grew by 4.8% from $1.037 billion to $1.087 billion. In turn, revenue from national time sales increased by 8.3% from $351.3 million in 2006 to $380.6 million in 2007.
FM radio stations clearly dominate the Canadian marketplace with revenues totalling slightly over $1.1 billion as compared to $329.4 million for AM stations. Over the past five years, revenues have consistently risen for English FM stations. In 2003, their revenues stood at $701.5 million. By 2007, they had increased to $947.5 million. In comparison, French FM stations saw their revenues increase from $172.9 to $209 million while ethnic stations almost doubled their revenues from $9.8 to $16.1 million over the same period.
Revenues for English AM stations have also experienced a steady increase going from $259.8 in 2003 to $291.7 million in 2007. Ethnic stations have enjoyed slight increases during this period with their revenues now standing at $21.8 million.
However, revenues for French AM stations were down by $2.3 million in 2007 going from $18.2 to $15.9 million. This reflects an ongoing pattern of declining revenues that has plagued the French radio market over the past five years where in 2003 revenues were at $26.1 million.
Overall, radio broadcasting continues to be a major employer in Canada. With the opening of 23 new radio stations in 2007, Canada now has a total of 619 stations across the country. These radio stations employ over 10,000 employees and represent total salaries of $607 million.
