Advertising revenues for Canadian television grew just 1.8% in 2007, the smallest gain in a decade according to Statistics Canada.
Conventional TV was hardest hit by the slowdown, with ad revenues increasing a meagre 1% to $2.04 billion from $2.02 billion. Ad sales account for about 94% of the conventional sector’s annual revenues. Total revenues for the conventional sector increased 1.1% to $2.19 billion from $2.16 billion the previous year.
The doldrums in the conventional sector were at least partly offset by a 7.5% gain in the specialty category, where ad revenues increased to $948.3 million from $882.4 million.
Meanwhile, increased consumer demand for video-on-demand and pay-per-view led to a 13.5% jump in revenues for the pay TV category. Revenue for VOD and pay-per-view services increased 25.8% to $197.8 million in 2007, accounting for almost two-thirds of the growth in the pay segment.
According to StatsCan, the weak performance of conventional TV compared to specialty and pay is part of a “strong long-term trend.” Conventional TV accounted for 55.9% of all TV revenues in 2007, a marked decline from 79.4% just a decade earlier.
The shift towards specialty and pay TV has led conventional broadcasters to expand their portfolios in recent years. Last year, Winnipeg-based Canwest—which owns the Global and E! conventional channels—partnered with U.S. investment bank Goldman Sachs to purchase specialty broadcaster Alliance Atlantis, owner of a series of top-rated specialty services including HGTV, Food Network Canada and Showcase, for $2.3 billion. And in 2006, CTVglobemedia paid $1.7 billion for CHUM Limited, which operated specialty channels including MuchMusic and Bravo.
