OTTAWA-GATINEAU – A drop in advertising revenue helped slow the pace of growth at Canada’s specialty, pay, PPV and VoD television services in the broadcast year ending August 31, 2015, according to the CRTC’s statistical and financial report for this sector released Thursday.
Pay, Pay-per-View, Video-On-Demand and Specialty Services – Statistical and Financial Summaries 2011-2015 said that the sector generated revenues of $4.3 billion in 2015, a modest 0.5% increase over the $4.2 billion earned the previous year, which was hampered by a $19 million decline in advertising revenue, which was offset by a $30.6 million increase in subscription revenues.
The report says that expenditures continued to increase, rising from $3.1 billion in 2014 to $3.3 billion in 2015. As a result, profits before interest and taxes (PBIT) dropped from $1 billion to approximately $884.9 million, however, the PBIT margin remained healthy at 20.8%.
The 10 highest grossing services out of the 228 operating in Canada accounted for 37.7% of the total revenues generated in 2015, continues the report, noting that Rogers’ Sportsnet One and Quebecor’s TVA Sports cracked the top-10 highest grossing channels list for the first time, following their acquisition of exclusive NHL programming rights.
Sports services continue to drive the bulk of specialty, pay, PPV and VoD revenue, with Rogers-owned Sportsnet, Sportsnet One and Sportsnet 360 posting double digit increases to generate $482.4M combined, and Bell Media’s TSN racking up $442.8M, which dipped 2% from the prior year.
Pay, pay-per-view and video-on-demand services continued to struggle, with their revenues decreasing by 6.3% ($49.7 million) between 2014 and 2015.
One can also see in the data a number of other things, such as why Corus Entertainment decided to abandon Movie Central to Bell and TMN. The former Western Canada pay service endured a 26% drop in revenue (to $81.7 million) and a 33% decline in profitability (to $16 million) from 2011 to 2016. TMN on the other hand, saw revenues decline 13% to $120.5 million over the same time frame and pre-tax profit plummet 85% to $4 million as programming expenses went up. Staff count at TMN also dropped from around 150 people under former owner Astral Media to just 9 at the end of August 2015, according to the CRTC report.
Back to the overall numbers, bilingual and English-language services generated $3.4 billion in revenues, a decrease of 1.1% ($36.7 million) in 2015; French-language services produced revenues of $755.6 million, an increase of $57.8 million; and revenues for the 38 third-language services decreased by -$2.1 million to $78.5 million.
Specialty services invested $1.5 billion in the creation of new television programs produced by Canadians, reflecting an increase of 7.8% compared to the $1.4 billion invested in the previous year. Of the $1.5 billion invested in Canadian-made programming, $409.9 million went to independent Canadian producers, up 9.1% ($34.1 million) from 2014.
Spending on foreign programming by specialty services increased from $389.2 million in 2014 to $434.2 million in 2015.
