Corus once again felt the pinch from advertisers scaling back spending on television ads in Q1, but the company’s investments into streaming and new approaches to ad buying have it hopeful that it remains set up for future growth.

For the three months ending Nov. 30, 2022, revenue at Corus was down by 7% year-over-year, primarily driven by an 8% dip in revenues from its TV division.

The company cited shrinking demand and spending in television advertising across North America in the quarter, due to “continued disruptions to consumer behaviour patterns and supply chains.” In particular, Corus said demand from direct to consumer, food, beverage, retail, toy, health and beauty advertisers was down, as was automotive, as the sector continues to face supply chain challenges.

There was also a 3% decrease in distribution, production and other revenue, which the company attributed to timing of content licensing sales and declines in book publishing sales; it expects stronger growth in these areas for Q2. Subscription revenue was flat from the year prior, with growth in streaming subscribers and expansion of services offsetting declines in linear TV.

Corus’ TV division also faced a 5% increase in expenses during Q1. This included an 8% decline in direct cost of sales, due largely to more original programming deliveries driving an increase in amortization of program rights. There was also a 2% increase in general and administrative expenses, due to higher labour costs, increased marketing spending on new streaming services (such as Pluto TV), more development costs and higher travel costs related to news coverage on Global.

Altogether, this led to TV profits being down 26% year-over-year in the quarter.

Despite this, Corus cited reasons to be optimistic about growth in TV for the future. In particular, revenue from new platforms was up 13% year-over-year, due to the launch of Pluto TV and Teletoon+, adding Disney properties to the content on Stack TV and strengthening the content on its Global TV and Global News streamers. In addition, the company’s “optimized advertising revenue” – which includes the company’s efforts to sell ads based on audience segments, as well as the Cynch automated buying platform – grew by 31% in the quarter. Together, the company says this will help it capitalize on the addressable video advertising market, which continued to grow in Canada through 2022.

Also, while it shrunk year-over-year, Corus’ profit margin for television remains at a healthy 33%, with $21 million in free cash flow.

In radio, where the company’s revenue is primarily driven by advertising, the company had a modest $536,000 increase in earnings, representing 2% year-over-year growth. Corus said it has seen increased radio spending from clients in entertainment, travel, restaurant and retail, though that has been partially offset by declines in automotive, general services and home products.