Overall television broadcast revenues broke the $6 billion barrier in 2006, an increase of 8.2% from 2005, and the third largest year-over-year increase in the past decade, according to a new report from Statistics Canada. The report also stated that ad revenues for the industry rose 7.6%, to $3.3 billion.
Revenues for private, conventional casters were flat at $2.2 billion in 2006, unchanged from the year before, while profits fell 62.5% to just over $90 million – the first time in 15 years that that particular segment made less than $100 million, according to a study released yesterday.
The 4.1% profit margin posted by those broadcasters in ’06 was the smallest in 30 years. The 23-page report notes that, though the segment has seen flat revenue more often than not over the past five years, increased spending on programming and promotions sent profits into a tail spin. Increased competition and downward pressure on advertising prices are also taking a bite out of the books.
StatsCan’s numbers match those of a CRTC report issued in March and recent findings by the Canadian Association of Broadcasters. The new report notes that the CRTC’s recent lifting of ad time limits on conventional TV ‘should enable broadcasters to increase their revenues, though the impact that the decision will have on the advertising market remains to be seen.’
That $2.2 billion was, nonetheless, the biggest slice of revenue earned in the TV sector last year, though specialty and other channels are closing in on the conventionals. Revenue at specialties was up 11.2% to just over $2 billion, while pay TV soared 17.7% to $482.3 million, thanks to runaway growth of pay-per-view and VOD.
The high revenue at the specialties was offset by a slight dip in profit, down to $447.8 million from $449.2 million. StatsCan also notes that the cable channels are growing more slowly than in their early days. ‘Revenues grew at an average annual rate of 10.8% in the last five years, compared with 17.3% in the previous five years. This trend affected both advertising and subscription revenues,’ the report states. ‘This loss of momentum is not surprising. Introduced over 20 years ago, specialty television is no longer a brand-new industry in an initial period of rapid growth. (It) has now reached a plateau characterized by decelerating growth.’
Last year was also good to public and non-profit broadcasters, due largely to the return of NHL hockey to CBC, which helped push ad revenues up 44.2% to $351.1 million.
This story first appeared in Playback Daily.
