Advertising at English and French conventional TV stations experienced the largest drops in revenue for the last five years in 2014, according to new numbers released by the CRTC. However, despite the drops in ad dollars, total broadcast industry revenue went up in 2014.

English-language private conventional TV stations saw an overall drop of 7.6% in ad revenue from 2013 to 2014, from $1.4 billion to $1.3 billion, the largest drop of the past five years. The second-largest drop came in 2012 when revenues dipped by 7.2%.

French-language private conventional TV stations saw an advertising revenue drop of 7.9% from 2013 to 2014, moving from $290 million to $267 million. That drop far exceeds other recorded fluctuations from the past five years in the French market. The closest other drop was of 1.9% from 2009 to 2010.

On the flip side, CBC posted increases in overall conventional TV advertising, moving from $331 million in 2013 to $475 in 2014, a jump of 43.5%. Total revenue at the CBC also jumped, moving from $464 million in 2013 to $602 million in 2014, likely attributed to big-ticket events like the Sochi 2014 Olympics.

Overall, advertising revenue at private conventional TV stations dropped 7.6% in 2014, moving from $1.7 billion to $1.6 billion.

In 2014 the broadcasting sector overall, which includes radio and TV stations as well as discretionary services (pay, pay per view, VOD, specialty services), made $17.3 billion in revenues, an increase of 1.4% over 2013 numbers.  Increases at the CBC, BDUs and TV overall offset drops in radio and conventional TV to lead to the jump.

Those CRTC numbers are from the third part of the CRTC’s 2015 Communications Monitoring Report, which covers numbers from 2014.

Consumer trends

Last year, broadcast companies invested nearly $3 billion in the creation of new Canadian content, and nearly $60 million in new Canadian audio content in 2014. That is up slightly from the $2.7 billion spent on the creation of new Canadian content in 2013 and $52 million on the creation of Canadian audio content and to support Canadian artists.

Canadians spent a bit less time watching conventional TV last year, with numbers dropping across all age groups. The overall average amount of viewing remained stable at about 27.4 hours per week, compared with 27.9 hours in 2013.

Canadians 18 and older also watched 2.7 hours of content on the internet each week, up from 1.9 hours a week in 2013.

The percentage of Anglophones watching internet video content on a tablet jumped from 20% in 2013 to 26% in 2014. Francophone viewing of internet video on tablets also jumped from 16% to 25% for the same period.

In addition, the amount of internet video being watched on smartphones grew, jumping from 23% in 2013 to 38% in 2014 for Anglophones and 16% to 27% for the same period for Francophones.

The percentage of Canadian households with subscriptions to cable, satellite or IPTV services dropped slightly, from 83.7%, or 11.8 million households, to 82% or 11.6 million households in 2014.

In 2014 there was a small decline in the average time spent listening to radio stations, with Canadians spending 18.8 hours a week consuming radio in 2014, versus 19.3 hours in 2013. Online streaming was used by 22% of Canadians in 2014, with 18% using personalized online audio streaming services.

Revenue

About 91% of private conventional TV broadcasters’ revenues came from advertising in 2014, compared with 30% for discretionary services, which make the majority of their revenue from subscriptions.

Overall, five vertically integrated companies (BCE, Cogeco, Quebecor, Rogers and Shaw), generated $13.7 billion in broadcasting revenue in 2014, accounting for over 87% of total broadcasting revenues. The remaining entities had combined revenues of $3.6 billion, making up 13% of total broadcasting revenues.

Radio revenue overall fell slightly from $1.62 billion in 2013 to $1.61 billion in 2014. Of that, FM revenues dropped 0.4%, moving from $1.328 billion in 2013 to $1.323 billion in 2014. AM revenues dropped 1.3% from 2013 to 2014, moving from $295 million to $291 million. The CBC reported $1 million in radio advertising revenue in 2014, the first year the pubcaster had advertising. 

BCE held the majority share of revenue for both commercial radio and television, with 26% and 35%, respectively.

Rogers held the second-highest share of radio revenues at 14%, Corus had 10%, Newcap 8%, Cogeco 7% and all other companies held 35% of revenue in 2014.

Shaw held the second-highest share of commercial TV revenue in 2014, at 16%. The CBC and Rogers were tied at 12%, Corus had 10%, Quebecor 6% and all other companies combined had 8%.

Total conventional TV revenue dropped by 1.8% overall from 2013 to 2014, moving from $2.408 billion to $2.408 billion.

The CBC saw a revenue jump of 29.7% from 2013 to 2014, from $464 million to $602 million. Revenues at private companies dropped by 7.2% for the year, from $1.9 billion in 2013 to $1.8 billion in 2014.

Revenues at category A English-language specialty services rose from 2013 to 2014, moving from $1.3 billion to $1.4 billion. Category B English-language services also saw a lift, moving from $373 million to $375 million. Category C English-language specialty services jumped from $850 million to $968 million.

Revenues at French-language Category A specialty services dropped from 2013 to 2014, moving from $296 million to $268 million. Category B channels saw an increase, moving from $37 million in 2013 to $42 million in 2014. And French-language Category C specialty services moved up from $269 million in 2013 to $282 million in 2014.

In total, English and French specialty, pay, PPV and VOD services saw revenues go up from $4 billion in 2013 to $4.2 billion in 2014.

English TV revenue

French TV revenue

Programming investment

The majority of Canadian programming expenditure (CPE) in 2014 went to specialty and pay TV, amounting to 49% or $1.4 billion of the total spend. The CBC and conventional TV had CPE spend of $790 million, or 27% of the total. Other public and not-for-profit conventional TV channels got 2% of CPE for 2014, or $73 million.

Overall, $4.2 billion was spent on TV programming in Canada in 2014, with 54% going to Canadian programming (excluding programs of national interest), 31% to non-Canadian programming and 15% to programs of national interest (PNI).

In 2014 the CRTC approved of the divestiture of three of the remaining five services (Disney Junior, Disney XD and Family Channel) to DHX Media Ltd. DHX Media committed $17.3 million in tangible benefits to English-language initiatives as a result of the deal.

The regulator also approved of the divestiture of MusiquePlus and MusiMax to Groupe V Media in 2014, with Groupe V committing approximately $2.3 million in tangible benefits to French-language initiatives.

BDUs

BDUs made revenues of $9.1 billion in 2014, up 1.4% over 2013. In all, 82% of Canadian households had a subscription to a BDU service in 2014, down slightly from 83.7% in 2013. The companies had 11.6 million subscribers, down 1% from 2013. IPTV subscriber share was 15% in 2014, up from 12% in 2013. In 2014, BDUs paid $3.3 million in affiliation payments, with 88% of those going to Canadian services.

Canadian BDUs received $60.12 per cable subscriber in 2014, up from $59.43 in 2013. IPTV subscribers earned BDUs $67.61 in revenue a month in 2014, up from $64.64 in 2013.

During the 2013/14 broadcast year, about 5% of BDU revenues were directed to various funds for the production of Canadian programming. In 2014, that amounted to $218 million in funds for the CMF, up from $214.4 million in 2013. Expenditure to community channels was up, with $151.6 million in 2014 versus $138.6 million in 2013. Contributions to other independent funds was also up, sitting at $55 million in 2014 versus $51.7 million in 2013.

 Image courtesy of Shutterstock