Falling ad dollars lead to third straight decline for BDUs: CRTC

Overall BDU revenues fell to $8.54 billion in 2017, marking the third consecutive year of losses, according to the report.
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Overall TV and radio broadcasting revenues declined by 3.3% between 2016 and 2017, according to a financial report released by the CRTC on Monday (July 9).

In total, the commission reported that BDU revenues dropped to $8.54 billion in 2017, from $8.73 billion the year before, representing a third consecutive year of decline. The data from the report is based on financial filings for the year ended Aug. 31, 2017.

Within the $8.54 billion, private conventional TV revenues decreased to $1.61 billion, from $1.68 billion, while discretionary and on-demand revenues fell to $4.34 billion, from $4.42 billion.

On the private conventional TV side, the 4.1% revenue drop represented the sixth consecutive year that conventional TV services have reported revenue declines due to falling ad dollars. “Conventional television revenues are declining faster than any other industry in the broadcasting sector,” said the report. As well, total expenses ($1.61 billion) for private conventional outweighed total revenues ($1.64 billion) for the fourth year in a row.

Meanwhile, revenues for discretionary and on-demand services fell less sharply  by around 1.2%  however, the decline put an end to four consecutive years of moderate growth. The report added that there is a divergence in the profitability of the top-performing discretionary services. Overall, the top 10 services reported year-over-year revenue increases of 3.7%, while the services outside of the top 10 reported year-over-year decreases of 4.7%.

Looking to the CBC, the public broadcaster’s conventional TV revenues dropped to $944 million, from $1.185 billion the year before. However, the commission noted that this decline was amplified by the fact CBC excluded all digital activity from financial reporting for its conventional TV services, which resulted in an approximately $240 million (or 20.4%) decrease.

Canadian production expenditure (CPE) also decreased as a result of the decline in TV revenues, with CPE for private conventional TV services dipping by 2.4% to $618 million in 2017, from $634 million 2016. In terms of where that CPE spend went, $42 million was directed to drama, $47 million to reality TV, $8 million to long-form documentary and $20 million to music and variety.

CPE for specialty channels was $1.64 billion for 2017, with more than 50% of that going to sports programming (in total $853 million was spent on sport in 2017, an increase of $32 million from the previous year). Elsewhere, $100 million went to drama, $79 million to reality TV, $98 million to long-form documentary, $20 million to music and variety and $270 million to news, analysis and interpretation.

CBC’s total CPE investment was $509 million, compared to $635 million in 2016. “Given that digital media expenditures are no longer reported, it is not clear if CBC’s overall investments have changed from 2016 to 2017,” states the report. In 2017, $177 million of CBC’s CPE was directed toward Canadian drama, $38 million to long-form Canadian documentary content and $51 million to human interest programming.

In contrast to TV, overall revenues for commercial radio remained relatively steady, with $1.52 billion for 2017, compared with $1.55 billion a year ago. CBC Radio, meanwhile, posted revenues of $295 million, up from $291 million in 2016.

Elsewhere, IPTV outperformed satellite for the first time since it was introduced to the Canadian market. IPTV added over 130,000 subscriptions to its subscriber base in 2017 (growing by around 10%), with 2.6 million Canadian households now subscribing to IPTV. Satellite services, meanwhile, fell by 7.2%.

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This story originally appears in Playback