New CRTC data shows the true impact the pandemic on Canada’s TV and radio broadcasters, as well as which sub-sectors and regions bore the brunt of declines in ad spending.
Based on statistical and financial data provided for the broadcast year ended Aug. 31, 2020, total broadcasting revenues in 2020 declined overall by -6.6%, with the commercial radio (-20.9%) and private conventional television (-14.3%) sectors being most impacted.
Radio
Declines in advertising due to the pandemic in the second half of the 2020 broadcast year resulted in a significant drop of commercial radio station revenues. The 20.9% year-over- year decline in radio revenues is more than eight times the five-year Compound Annual Growth Rate (CAGR) of -2.4% reported from 2015 to 2019.
Over 700 commercial radio stations reported combined revenues of $1,149 million in 2020, compared to $1,453 million in 2019. French-language radio stations reported the smallest decline in revenues (-15.4%), followed by ethnic stations (-18.1%) and English-language stations (-22.2%).
Through no designated market reported positive revenue growth in 2020, larger markets also fared worse than smaller ones. Radio stations in Toronto, Montreal, and Vancouver reported revenue declines of 25.2%, while stations in other designated markets declined by 21.8% and stations in non-designated markets declined by 14%. Medicine Hat (-0.01%), Lethbridge (-8.2%), and the Montreal French-language AM stations (-7.7%) were the only designated markets with less than double digit declines in year-over-year revenue.
Toronto English-language AM stations (-31.3%) and the Kitchener Waterloo market (-30.4%) were the worst performing designated markets in Canada in 2020, although several other markets registered declines in revenue exceeding 25%.
In contrast to commercial radio, CBC Radio which has no reliance on advertising revenues, saw revenues increase by 3.6% over 2019, mainly due to a larger allocation of CBC’s parliamentary appropriation.
Television
The PBIT (Profit Before Interest and Tax) for commercial television stations continued to plummet, with a decline of $107 million in 2019 growing to more than $234 million in 2020, a PBIT margin of -18.6%, mostly due to significant reductions in ad revenues. Revenues for commercial stations decreased by $222 million, from $1,554 million in 2019 to $1,332 million in 2020, a decline of 14.3%, which by far exceeds the five-year CAGR of -3.0% reported from 2015 to 2019.
No region avoided the decreases in advertising revenue. However, the Atlantic region fared the best with a decline of only 6.4%, with the Prairies faring the worst with a 20.2% decline.
Despite an increase in revenues in 2019, Canadian programming expenditures (CPE) in 2020 decreased 6.7% to $625 million in 2020 from $670 million in 2019, the first decline in CPE for private commercial stations since 2017. While CPE increased from 2016 to 2019, spending on non-Canadian programming by this sector has declined by an average of 2.5% annually during the same period, further decreasing by 2.6% in 2020.
CBC’s conventional television, which derives its revenues from both advertising and the parliamentary appropriations, fared better than commercial TV during the pandemic, posting reduced revenues of -2.2%, which is less than the 10.9% reduction in revenues reported in 2019 (though it should be noted that Olympic games were held in 2018, giving CBC a boost). CPE levels were also lower, declining from $494 million in 2019 to $454 million in 2020, or -8.1%.
