A growing owned content business was not enough to offset ongoing ad spending declines for Corus in Q2.
For the three months ended Feb. 28, Corus’ revenue was $343.9 million, a year-over-year decline of 5%. For the fiscal year to date, revenues at Corus are down 6%.
Revenues in Corus’ television segment were down 5% in the quarter, due to an 8% decline in advertising revenue and 7% decline in subscriber revenue, though it was partially offset by an increase of 28% in production, distribution and other revenue.
Corus pointed to the same declines in ad spending and demand other media companies have been struggling with in recent months. It called out a long list of categories that have trimmed back ad spending: health & beauty, retail, financial services, government, toys, communications, direct-to-home and services categories, though there have been increases in gambling and travel ads. The company also pointed out that ad revenue has improved compared to recent quarters; it decline by 11% in Q1 and 14% in Q4 2022.
The decline in subscriber revenue was partially due to the comparison to the prior year quarter, when Corus had a $5.9 million retroactive adjustment, though the company did say the declines in traditional linear TV subscriptions continued, and at a rate the exceeded the growth it is seeing in streaming. The increase in distribution revenue primarily came from agreements by Corus Studios and higher service work by Nelvana.
Expenses in the TV division were also up in Q2, due to increased original programming deliveries, a ramp up of Canadian content the extension of long-term output deals.
Doug Murphy, president and CEO of Corus, said that the long-term investments the company is making into premium digital video, cross-platform monetization and content are part of a strategic plan for profitable growth in the future, even if advertiser pullback is making for a rough go of things right now.
“We are streamlining our operating model, balancing the near-term realities of current macroeconomic headwinds with long-term value creation as we optimize our asset base,” he said. The recent changes to our financial priorities reinforce our commitment to responsible capital allocation while positioning Corus to emerge in a position of strength when the advertising economy recovers.”
Revenues in Corus’ radio division were up slightly, 1% year-over-year, and 2% for the fiscal year to date. The company attributed this to greater advertiser spending from the travel and entertainment sectors, as well as overall growth in podcast advertising. Expenses in radio were roughly the same as in the previous year, as higher podcasting costs and copyright fees were offset by lower short-term compensation accruals and other cost reductions measures.
