Advertising sales within the Canadian television industry fell 0.8% to $3.4 billion in 2014, according to Statistics Canada, continuing a downward trend that began in 2011 and shows no sign of abating.
TV ad sales fell by $190.9 million from 2011 to 2014, as continued consumer adoption of services like Netflix have had what Statistics Canada described as a “notable impact” on financial results.
The decline in advertising sales was partly offset by a rise in subscription revenues, which increased 5.5% to $2.9 billion, following increases of 8.4% and 5.3% in 2013 and 2012, respectively.
Private conventional television has been the hardest hit, with airtime sales falling by $302.5 million in the four-year period. Its losses have been partly offset by gains in the specialty sector.
Conventional TV controlled close to 80% of the total TV advertising market in 1999, but saw its share fall below 50% (48.9%) for the first time ever last year. Specialty TV accounted for 36.7% of the total TV advertising market, with public and non-commercial TV holding a 14.4% share.
Private conventional television’s share of total TV revenues fell to 24% in 2014, compared with 30.4% in 2010. Specialty TV’s market share continues to grow, reaching 45.3% on revenues of $3.4 billion.
Quebec’s conventional TV market, meanwhile, posted its first loss before interest and taxes since 1991, recording a loss of $12.3 million compared with a profit of $24.2 million in 2013. The loss was due to an 8.9% decline in operating revenues, while operating expenses fell 0.4%.
The last time the Quebec industry experienced revenue declines, between 1987 and 1991, they were attributable to significant increases in programming costs – which rose 58.1% from 1987 to 1991, to $209.9 million from $132.8 million – rather than declines in operating revenues, suggesting that the current losses are systemic.
The TV industry as a whole reported a 0.3% decline in total operating revenues, to $7.6 billion. Profits before interest and taxes (PBIT) fell 22%, to $836.8 million from $1.1 billion in 2013.
Statistics Canada attributed the declined to a 3.2% increase in operating expenses to $6.7 billion, attributable primarily to programming expenses – which rose 5.3%, to $4.8 billion from $4.6 billion the previous year.
