CRTC weighs in on future of broadcasting

The just-released CRTC report on the future of broadcasting in Canada predicts a major shift of audio-video via personal digital technologies over the next five years. Not exactly a big surprise - but some of the Commission's other statements may raise eyebrows.

Shifting media consumption patterns have had marginal negative impact on the country’s broadcasting system so far, according to The Future Environment Facing the Canadian Broadcasting System report released yesterday by the Canadian Radio-television and Telecommunications Commission (CRTC). In stating that conclusion, the report does note that – with younger Canadians increasingly accessing programming through unregulated platforms such as Internet and mobile networks – the CRTC must now monitor developments and assess the inevitable impact of this evolution on TV and radio broadcasters on an ongoing basis.

The report predicts that over the next five years, growth in audio-video technologies will shift to personal digital technologies – digital music and video players, ultra-portable PCs, digital cameras, mobile and smart phones, plus associated content and services – while demand for household technologies such as digital cable and DTH (cable/satellite TV) services will decline. The CRTC concludes that television’s ultimate future is on-demand, but the jury is out on whether Canadians will choose to receive their programming through a set-top PVR, cable VOD or on a PC or screen with broadband Internet connection.

While the number of digital households in Canada jumped from 10% to 40% between 2000 and 2004, growth is slowing. Digital household penetration only increased from 40% to 44% from 2004 to 2006 and is expected to peak at 58% to 60% by 2011.

Canadian English-language conventional TV services garnered a 27% share of total TV viewing in 2004/05, a slight loss from 28.1% share in 2002/03. Demand for English-language pay and specialty, including digital services, increased from 25.7% share in 2002/03 to capture 29.1% of total viewing in 2004/05.

On a positive note for Canada’s conventional broadcasters, total share of Canadian viewing of US conventional television dropped to 7.7% in 2005 from 9.4% in 2003.

Audience tuning habits

Weekly television viewing hours for all persons (2+) declined slightly from 28.7 hours for the 2001/02 TV year to 28.1 hours for 2004/05. Viewing by children 2 to 11 increased from 19.3 hours to 20.5 and for teens aged 12 to 17, 20.9 to 21.3 hours. The decreases are seen in the adult demos. Viewing by all adults 18+ dropped from 30.9 hours to 29.9. Those aged 18 to 34 watched 25.0 hours in 2001/02 and 23.3 in 2004/05; 18 to 40 viewed 26.5 and 25.0; and the 25 to 54 demo 27.7 hours versus 26.5.

Radio tuning habits have remained relatively stable over the past five years, although there’s been a noticeable shift from AM to FM radio and a decline in listeners by those between the ages of 12 and 34. Total per capita radio listening dropped by one hour and 15 minutes per week from 2000 to 2005. Teens aged 12 to 17 listened to 10.5 hours a week of radio in 2000 but only 8.6 hours in 2005. The 18 to 24 year-old group dropped from 18.1 to 15.2 hours and 25 to 35 year olds 20.6 to 18.1 hours.

Share of ad revenue by media

Although total revenues for private conventional TV stations increased 16.1% between 2000 and 2005, TV’s share of the total ad revenue pie declined. Television captured 34% of total ad revenue in 2000 but slipped slightly to 33.7% in 2005. Other broadcast media fared much better. Radio’s share rose from 13.9% to 14.7% and the Internet from 1.5% to 5.8% in the same years.

Billboard advertising’s share increased slightly, from 4.1% to 4.5%, as did magazine, which grew from 11.1% to 11.5%. Newspaper advertising experienced declines in revenue with daily newspaper dropping from 23.9% to 19.9% share and weekly newspaper from 11.4% to 9.9%.