OTTAWA – Canada’s television broadcasting sector reported its lowest year-over-year increase in 12 years in 2009, according to data from Statistics Canada.
The figures, released Monday, showed that 2009 industry-wide operating revenues totaled $6.5 billion, an increase of 0.6% from 2008. However, the financial picture varies widely across the various segments of the industry.
Revenues of public and private conventional television broadcasters fell 3.9% from 2008 to $3.4 billion in 2009, the steepest decline in 10 years. Compared with 2008, the operating revenues of this segment dropped 7.7% last year, the largest annual decrease in more than 30 years. Public and non-commercial television posted a 1.9% increase in operating revenues between 2008 and 2009.
The specialty (+3.3%) and pay television (+16.6%) segments recorded operating revenue gains in 2009 compared with 2008, and revenues for the two segments combined totalled $3.1 billion. Nevertheless, revenue growth for pay and specialty television has been diminishing each year for the past few years in both absolute and percentage terms – the year-over-year increase was $230 million in 2007, $200 million in 2008, and $175 million in 2009.
Statcan also determined that the weak growth of operating revenues in the television industry as a whole in 2009 was largely due to the decrease in advertising revenues. Canadian television broadcasters’ advertising revenues fell 8.4% from 2008 to $3.1 billion in 2009, the first decline in 15 years. Advertising revenues, which usually account for more than half of the industry’s revenues, represented less than half (47.8%) of the sector’s total revenues for the first time in a number of years. A decade earlier, these revenues accounted for nearly 60% of the sector’s total revenues.
Private conventional television has faced a myriad of financial challenges in the past several years, especially in the area of profits. Although the profit margin before interest and taxes of this sector was 11.2% in 2005, it obtained a negative result (-5.7%) in 2009. While profits before interest and taxes totalled $4.8 million in 2008, losses amounted to $113.4 million in 2009, marking the first time in 30 years that profits were negative.
Pay and specialty channels, on the other hand, generated a profit margin in excess of 20% for the fifth consecutive year. Their profit margin rose from 22.1% in 2008 to 23.5% in 2009, and their operating profits increased from $648.2 million to $728.7 million.
