BCE’s revenue grew by 3.5% year-over-year in Q1, but that was despite a drop in media revenues as advertiser demand remained soft in an uncertain macroeconomic environment.
Operating revenue for Bell Media was down 5.5%. Ad revenue was down 4.7% due to lower demand in both TV and radio, though the company said the decline was partially offset by recovery in the out-of-home market, as well as 4% growth in digital ads. Subscriber revenue was down 4.1%, though that was largely due to comparison to Q1 2022, where the company had a favourable retroactive adjustment.
Bell Media’s overall digital revenue grew 2% as a result of customer growth for Crave (up 6%) and the new TSN streaming service, as well as more bookings for the SAM TV audience segmentation and targeting platform.
In the communications and technology division, operating revenue increased by 4.9%, driven by growth in mobile and internet subscribers, sales of consumer mobile phones and enterprise equipment, partially offset by declines in legacy voice, data and satellite TV services.
Operating costs across the company were also up 7.7%. More product sales resulted in a higher cost of goods sold, but Bell also had increases in TV content costs, labour costs, contractual increases for sports programming and other premium content, as well as charges related to the acquisitions of independent ISPs EBOX and Distributel.
Bell remains optimistic about the year ahead, however, as the challenges experienced in the quarter were expected and built into its financial plan. The company reconfirmed its financial guidance for the full year, targeting 3.5% revenue growth.
Alongside the earnings release, BCE announced that long-time chief financial officer Glen LeBlanc would be retiring after 18 years in the role. Curtis Millen, currently SVP of corporate strategy and treasurer, will be promoted to CFO effective Sept. 1, though LeBlanc will continue to advise the company on its financial operations until the end of the year. He will also continue in several governance capacities for the company, including vice-chair of Bell Atlantic, chair of Northwestel and board member and chair of the audit committee for Maple Leafs Sports & Entertainment.