Conventional TV profits fall 85% in 2012: CRTC

Profits for Canada’s private conventional TV broadcasters fell more than $128 million last year as viewers continue to embrace web-based viewing options like Netflix and advertisers shift more dollars into digital media. New data released by the Canadian Radio-television Telecommunications Commission (CRTC) showed that private conventional television’s profits before interest and taxes (PBIT) dropped from […]

Chris Powell June 17, 2013

Profits for Canada’s private conventional TV broadcasters fell more than $128 million last year as viewers continue to embrace web-based viewing options like Netflix and advertisers shift more dollars into digital media.

New data released by the Canadian Radio-television Telecommunications Commission (CRTC) showed that private conventional television’s profits before interest and taxes (PBIT) dropped from $151.6 million to $22.9 million for the year ending Aug. 31, 2012—an 85% decline. The profit margin fell to 1.1% from 7.1% a year earlier.

Revenues for Canada’s private conventional stations—a group that includes CTV, Global Television, City and Quebec’s TVA—fell 4.9% to $2.04 billion for the year, while expenses increased just over 1% to $1.92 billion.

While local airtime sales remained relatively stable at $354.6 million—a negligible 0.2% decline from 2011—national sales slumped by $114.9 million, or 7.8%, to $1.35 billion, according to the CRTC.

The most pronounced revenue decline was in the often-overlooked infomercial category, which fell 13.7% to $15 million.

Private broadcasters invested $661.8 million on Canadian programming last year, a 17.6% increase from 2011. More than half that amount—$353.6 million—was devoted to news programming, followed by $82.3 million for general interest programming, $68.5 million for sports programming and $58.9 million for drama series.

Investment in foreign programming fell slightly, to $725.8 million.

Private broadcasters employed 6,343 people and paid $537.2 million in salaries last year, with the average employee making a salary of $84,693. By contrast, the CBC employed 6,319 people at an average salary of $95,987.

The CBC’s French and English-language services reported advertising revenues of $372.7 million last year, a 1% increase from $369.6 million generated by the public broadcaster in 2011. The CBC invested $786.1 million on programming, 93% of which went towards Canadian content.

The financial reports came two days after a presentation by CRTC chairman Jean-Pierre Blais at the Banff World Media Festival in which he alluded to the challenges facing the TV industry, and announced the regulator’s intention to “take the pulse” of the public before undertaking future regulatory proceedings.

“Broadcasting, as we once knew it, is no longer—and will never again be—the same,” he said, noting that the medium no longer has a monopoly on information and entertainment.

Blais said that content creators and broadcasters must be mindful of what the public wants. “Your future success rests, in large part, on listening—and responding—to what Canadians have to say,” he said. “Translating their expectations and aspirations into positive outcomes will keep your sector productive and prosperous in the years ahead.”