Conventional television’s recent ‘difficult period’ can be blamed on the loss of advertising market share to specialty television, according to a recent Statistics Canada report on the television sector.

Specialty television led the sector in revenues of $2.3 billion in 2008, ousting conventional television from the top spot it had held for many years according to the report, which considered statistics for the year ending Aug. 31, before the economic downturn.

Specialty revenues were up by 6.5% thanks to a rise in both subscription revenues (5.4%) and advertising revenues (8.1%). Meanwhile, private conventional television saw a decrease in revenues by 1.8% over the previous year to $2.1 billion — the second annual decline in revenues for the segment in three years.

Overall, however, the TV sector’s total operating revenues rose by 5.4% to a total of $6.5 billion. This was partly due to a rise in public and non-profit TV revenues. ‘The upturn was largely attributable to advertising revenues from the Summer Olympics and a substantial increase in grants,’ says StatsCan.

M2 Universal president Sara Hill says the migration of ad dollars to specialty is due to the rise in share of tuning and the ease of sponsorship integration. ‘Some advertisers now use a mix of 100% specialty,’ says Hill.

According to BBM statistics, total TV viewing in Canada from Sept. 2008 to May 2009 was 37% to specialty channels and 55% to conventional.

Before interests and taxes, specialty channels’ profit margin surpassed 20% for the fourth consecutive year. Conventional, meanwhile, generated a profit of less than 1% before interests and taxes — the lowest in 30 years. ‘Nearly half of all private and conventional stations posted losses before interests and taxes in 2008,’ according to the report.

A growing interest in on-demand television is credited with an advance in revenues for the pay television segment. Operating revenues were up by 11.8%, totaling $612 million, while revenues from on-demand services climbed by 36.3% from 2007 to $269.6 million.

From Media in Canada