Belt-tightening efforts, combined with increased ad revenues and revenues from the Local Programming Improvement Fund, helped Canadian TV broadcasters regain their profitability last year.
According to the latest Statistics Canada data, operating revenues for the TV broadcasting sector were $7.5 billion in 2011, a 5.4% increase from 2010.
Pay and specialty TV operating revenues rose an industry-leading 7.9% to $3.7 billion, followed by a 7.1% increase to $1.6 billion for public and non-commercial TV, and a 0.3% increase to $2.2 billion for private conventional TV.
The profit margin for private conventional TV was 7.2%, the highest it has been since 2005. Statistics Canada attributed the increase to a significant reduction in programming and production expenses. Private broadcasters reduced programming and production expenses by 11.3% last year.
Total TV ad revenues were $3.57 billion in 2011, a 4.7% increase from $3.41 billion in 2010.
Advertising dollars continued to shift towards the specialty TV sector, with 2011 revenues increasing 10.9% to $1.2 billion. At the same time, subscription revenues for pay and specialty services increased a healthy 7%. Subscription revenues now account for 64.4% of the pay and specialty sector’s $3.7 billion in operating revenues.
Conventional TV revenues increased 1.7% to $2.3 billion, but its share of the total TV ad market has dropped to 65.5% from 72.9% five years ago (private conventional TV’s share fell to 54.8% from 62.2% in the same period).
