In the same year in which domestic producers felt the pinch of scarce funding dollars, Canadian conventional broadcasters enjoyed a level of profitability in 2003 not seen since 1999.

However, conventional broadcasters are quick to dampen enthusiasm about the CRTC’s Statistical and Financial Summaries 1999-2003 report, published earlier in February, by describing strong revenue and profits growth in 2003 as anomalous, and the performance of 2004, to date, as disappointing.

According to the CRTC’s report, net profits at private television stations doubled from $95.6 million (on revenues of $1.9 billion) in 2002 to $189.8 million (on revenues of $2.1 billion) in 2003.

The 10.4% growth in year-over-year revenue in 2003 is significantly higher than the 2.8% average overall growth over the past five years, says the regulator.

ACTRA jumped on the numbers, and was quick to scold broadcasters for cutting back on Canadian shows despite the strong bottom lines. ‘These major corporations have doubled their profits while Canada’s performers and other creators are left in the cold,’ says Stephen Waddell, national executive director of the actors union.

But Jack Tomik, president of CanWest Media Sales in Toronto, says 2003 television sales volume benefited from a resurgence of the advertising market – especially new product launches, a hot auto retail business, a busy entertainment sector and a jump in electronics and hard goods marketing. He adds that Canadian broadcasters have been successful in bringing down fixed costs, so that when there is an above-average revenue year, profits can improve dramatically.

‘In 2003, the Earth, moon and stars aligned,’ says Tomik, ‘but ’04 is back to normal. The fall was very disappointing for broadcasters with meager increases. The first quarter of fiscal 2004 was anemic – good for the specialty channels that are growing like gangbusters, but lethargic for conventional broadcasters. 2003 will be a high point in the sales trend.’

Also boosting revenues was the startup of new stations like Channel M in Vancouver and increased ad rates demanded by broadcasters.

Last year was ‘a banner year for us, up 8%, pushed by strong television revenues,’ says Tom Curzon, CTV’s VP, corporate communications. ‘With shows like Canadian Idol and CSI, we had advertisers lining up, giving us fairly substantial profits.’

At CTV, first-quarter revenues (ended Nov. 30) are ‘a little softer’ than for the first quarter in 2003, says Curzon.

Meanwhile, CanWest Global reports Canadian revenues are off 11% in the first quarter of 2004 compared to the same period in 2003 – a situation exacerbated by a shift of premium programming to CTV. CHUM, for the first quarter of 2004, reported flat revenues compared to the same period in 2003.

The CRTC report shows that expenses at the conventional stations also grew, in part because of increased spending on Canadian television production.

In 2003, $117.8 million was spent on Canadian drama, which represents a 20.8% increase over 2002. Spending on human-interest programs grew 33.1% over the year to $51.7 million in 2003. Spending on musical and variety programs was down significantly, however, decreasing from $24.5 million in 2002 to $11 million in 2003.

In 2003, private television stations spent $300.2 million on news programs (up 3.3% over 2002) and $56.4 million on other Canadian information programs (up 4.2% over 2002).

There may be some correlation between increased profits and increased program spending, say broadcasters, but the cost of acquisition in 2003 increased with the stepped-up competition for programming in the market – even for older domestic shows sitting on the shelf that could help broadcasters meet their Canadian content quotas.

Licence fees also increased, adding to the expense line. There is no indication that the Canadian Television Fund crisis increased programming costs for broadcasters needing to ante up more to keep shows on the air. For instance, CTV says no more money was poured into The Eleventh Hour by the broadcaster because of the funding crisis last spring.

The CRTC report also shows the aggregate television salaries increased almost 13% to $539.6 million compared to the tally for salaries in 1999. The average individual salary is also up nationally over the five-year period, improving almost 9% to $68,700 in 2003.

-www.crtc.gc.ca