Operating revenues for Canada’s private radio stations were “relatively stable” in 2014, according to the latest data from Statistics Canada, with a slight 0.5% decline to $1.6 billion.
However, the report also notes that this is the industry’s first revenue decline since 2009.
The report comes amid a prolonged – and rapidly accelerating – shift in media consumption habits, with a recent study by ZenithOptimedia revealing the average Canadian spent 75.4 minutes per day listening to radio in 2014, down from 87.4 minutes in 2010.
The report projects time spent with radio to continue falling, reaching just 63 minutes a day by 2017. It notes that both younger Canadians and those with a higher than average household income tend to favour online platforms at the expense of offline media such as radio and TV.
Advertising generated 98.5% of total operating revenues for private radio broadcasters last year, but while local advertising accounted for $1.1 billion, its share of the total ad pie decreased at the expense of national and network advertising.
According to Statistics Canada, local radio sales accounted for 67.7% of total operating revenues in 2014 – their lowest recorded contribution.
Advertising revenues for AM stations fell slightly, 1.2%, to $283.4 million from $286.8 million in 2013. The AM sector’s profit margin before interest and taxes declined for the second straight year, falling 4.6% to below 5% for the first time since 2007.
The report attributed the decline to a 1.3% decrease in operating revenues, which fell to $290.7 million from $294.5 million. The number of AM stations also continued to decrease, to 126 from 128 in 2013. However, the report also notes the rate has slowed from the period between 2008 and 2012.
Operating revenues in the FM sector fell 0.3% to $1.3 billion, mirroring a 0.6% decline in ad revenue. The FM sector’s profit before interest and taxes fell to 21.6% from 22.8% in 2013, with total profits of $287.1 million.
French language and ethnic stations were among the industry’s bright spots, with operating revenues for the country’s French stations increasing 2.1% to $267.4 million and the profit margin increasing from 14.2% to 16.5%, the largest increase since 2010.
Working from a smaller base, ethnic stations had profits of $7.3 million, with the profit margin before interest and taxes rising to 14.9% from 11.3% in 2013. Operating revenues for English stations fell 1.1% to $1.3 billion, with the profit margin before interest and taxes decreasing to 19.1% from 21.8% in 2013.
