MONTREAL – TVA Group, a subsidiary of Quebecor Media, announced yesterday its financial results for the second quarter of 2022, which show revenues decreased by $12 million year-over-year to $147.5 million.
TVA also reported consolidated adjusted EBITDA was $3.2 million, a $10.7 million unfavourable variance compared to Q2 2021.
In its broadcasting segment, TVA reported $149,000 in negative adjusted EBITDA. This is “a $6,433,000 unfavourable variance resulting largely from the decreased profitability of TVA Network, which continued its strategy of increasing investment in content, partially offset by the improved profitability of “TVA Sports,” which had to absorb significant content cost in the second quarter of 2021 as a result of the change in broadcasting schedule for the National Hockey League’s 2020-2021 season,” a press release explains.
TVA’s adjusted EBITDA for MELS, its film production and audio-visual services segment, was reported to be $2.1 million – “a $1,741,000 unfavourable variance caused by the decreased profitability of visual effects services and of soundstage, mobile and equipment rental, while postproduction posted an increase in profitability,” the release says.
The company’s production and distribution segment reported $489,000 in negative adjusted EBITDA, “an unfavourable variance of $2,496,000 reflecting deliveries of films produced by Incendo during the period compared with the same period of 2021, when a number of new film sales were made after a slowdown caused by the pandemic.”
“Second-quarter results were significantly affected by lower profitability in the Broadcasting segment, more specifically at TVA Network, as a result of our ongoing strategy of enhancing our investment in content,” said Pierre Karl Péladeau, acting president and CEO of TVA Group, in the press release.
“The status quo that the CRTC is maintaining can only lead to the weakening, undermining and continued decline of private television in Canada in the face of foreign competition, and as a result there is little potential for revenue growth” – Pierre Karl Péladeau, acting president and CEO of TVA Group
“The programming aired during this interim period testifies to our commitment on this front: viewers were able to enjoy a wide variety of content including major variety shows, reality shows and new programs. TVA Network grew its market share by 0.7 points during the quarter. Its hit variety show Star Académie drew an average audience of over 1.5 million viewers,” he said.
“Despite the soft advertising market due to the business environment, our strong programming enabled us to stand out with advertisers and to limit the impact on our over-the-air network’s advertising revenues, which declined by a slight 1.7%. Our digital platforms increased their revenues by 19.9% during the quarter, due in part to the growing popularity of TVA+.”
Péladeau indicates in the release that they expect advertising revenues to continue to trend downwards in the coming quarters as foreign subscription video-on-demand services have said they will be introducing advertising-supported subscription tiers to their offerings. (Netflix and Disney+ have recently confirmed plans to do this.)
“This added competition comes on top of heightened competition from the public broadcaster, Radio-Canada, which has been carrying ‘infomercials’ in addition to its existing advertising vehicles for several quarters now,” he said.
“Furthermore, their growth on the web is enabling them to capture even more of the advertising dollars that are the sole source of revenues for over-the air television stations that bring Quebec families together in front of their television screens.”
Péladeau expressed dismay at the CRTC’s recent decisions to give the public broadcaster more flexibility when it renewed its licences and ignore calls to remove advertising from it.
“The status quo that the CRTC is maintaining can only lead to the weakening, undermining and continued decline of private television in Canada in the face of foreign competition, and as a result there is little potential for revenue growth,” he said.
“We call on the Minister of Canadian Heritage to intervene to ensure that Canadians continue to have access to multiple sources of news and entertainment, and to protect our society’s pluralism and diversity.” (Cartt.ca reached out to TVA to clarify this, and to see if the company is formally calling for the government to intervene in a specific way but have not yet received a response. We will update this story should we hear back.)
For more on TVA’s Q2 2022 financial results, please click here.
