2015 Highlights - Pay, Pay-per-view, Video-on-demand and Specialty Services Statistical and Financial Summaries

Specialty, Pay, Pay-Per-View & Video-On-Demand Services

Figure 1: Key Indicators


This figure presents several key indicators for the specialty, pay, pay-per-view and video-on-demand Canadian services in 2015 and is divided into six sections. The first five sections present textual information and the last section features a chart.
Section 1: There were 228 specialty, pay, pay-per-view and video-on-demand services that reported in 2015. 
Section 2: Total revenues were 4.25 billion dollars in 2015.
Section 3: Total expenses were 3.26 billion dollars in 2015.
Section 4: Profit margin was 20.8.0 percent in 2015.
Section 5: Total employment was 5,899 in 2015. Section 6: This section features two pie charts showing the revenues generated by each service language according to the number of services operated, in millions of dollars and percentage. The 158 English, Bilingual and No language services composed a 69.3% share of the services and generated 80.4% of revenues (3,421 million dollars). The 32 French-language services composed a 14.0% share of the services and generated 17.8% of revenues (756 million dollars). The 38 Ethnic-language services composed a 16.7% share of the services and generated 1.9% of revenues (78 million dollars).
  • There were 228 specialty, pay and on-demand (pay-per-view (PPV) and video-on-demand (VOD)) services in 2015; they generated $4.3 billion in revenues, up of modest 0.5% ($19.0 million) from 2014.
    • Revenue growth was hampered by a 1.5% ($19.0 million) decline in advertising revenue, which was offset by a 1.1% gain ($30.6 million) in subscriber revenues.
    • This was the slowest pace of growth recorded since 2009 in that sector.
    • The 4 largest ownership groups (BCE, Rogers, Shaw, and Corus) generated 77.1% of all revenues, a market share that was virtually unchanged from 2014.
  • Total expenses increased by 4.3%, from $3.1 billion in 2014 to $3.3 billion in 2015.
    • Programming and production expenses were the main driver with gains of $141.2 million (5.8%) in 2015. This category of expenses has increased by 27.8% ($560.0 million) since 2011.
  • Specialty, pay and on-demand services reported an average profitability before interest and taxes margin of 20.8% in 2015, down 3 percentage points from 2014.
  • These 228 services employed a total of 5,899 individuals in 2015. This represents a decrease of 4.8% (299 individuals) relative to 2014.

By language

  • In 2015, the breakdown of the 228 specialty, pay and on-demand services per language was as follows:
    • English/Bilingual/No language*: 158 services
    • French: 32 services
    • Ethnic: 38 services

    *”The Seasonal Channel”, operated by Stingray

  • English, bilingual and “no language” services accounted for the majority of the total number of services (69.3%) as well as of revenues (80.4%). They also were the most profitable language group (average PBIT margin of 22.8%).
    • Their revenues totalled $3.4 billion in 2015, which is a 1.1% ($36.7 million) decrease since 2014, mostly as a result of falling subscriber revenue (1.3% or -$30.0 million).
  • Revenues of the French-language services rose by $57.8 million to $755.6 million in 2015 as a result of a $61.0 million gain in subscriber revenues.
    • Expenditures of French-language services recorded the largest increase of all language groups (+20.6% or $111.1 million); this was largely as a result of higher spending by TV5 and TVA Sport.
    • Over the last 5 years, average PBIT margin decreased for each language groups, but most significantly for French-language services: their PBIT margin went from 25.3% in 2011 to 11.8% in 2015.
  • The third-language services’ revenues decreased by 2.6% (-$2.1 million) since 2014 and generated 1.9% ($78.5 million) of total revenues.
    • Ethnic services recorded a 2.7% decrease in expenditures (-$1.7 million), which contributed to maintaining their profit margin just above the 17% mark.

Figure 2: Key Indicators – by Service Type


This figure presents two diagrams tracking revenues and profitability margins for specialty, pay and on-demand (the combination of pay-per-view and video-on-demand) from 2011 to 2015.
Diagram 1: The first diagram is a column chart plotting total revenues in millions dollars by service type (specialty, pay and on-demand). Specialty services generated a revenue of 2,892 million dollars in 2011, 3,130 million dollars in 2012, 3,292 million dollars in 2013, 3,448 million dollars in 2014 and 3,516 million dollars in 2015. Pay services generated a revenue of 469 million dollars in 2011, 458 million dollars in 2012, 445 million dollars in 2013, 435 million dollars in 2014 and 424 million dollars in 2015. On-demand services generated a revenue of 387 million dollars in 2011, 389 million dollars in 2012, 354 million dollars in 2013, 353 million dollars in 2014 and 314 million dollars in 2015. Diagram 2: The second diagram is a line chart tracking profitability margins by service type (specialty, pay and on-demand) over time. Specialty services had a PBIT margin of 27.3% in 2011, 26.2% in 2012, 29.8% in 2013, 26.8% in 2014 and 25.3% in 2015. Pay services had a PBIT margin of 26.3% in 2011, 22.2% in 2012, 22.3% in 2013, 25.4% in 2014 and 15.0% in 2015. On-demand services had a PBIT margin of 4.4% in 2011, -2.2% in 2012, 0.5% in 2013, -6.6% in 2014 and -21.4% in 2015.
  • In 2015, the breakdown of the number of specialty, pay and on-demand services per type of service was as follows:
    • Specialty: 195 services (64 Category A; 121 Category B; 10 Category C)
    • Pay: 9 services
    • On-demand: 24 services (8 pay-per-view; 16 video-on-demand)

Specialty Services

  • Revenues for specialty services totalled $3.5 billion in 2015, an increase of $68.7 million (2.0%) relative to 2014 and a $623.8 million (21.6%) gain since 2011.
  • There has been a shift in the relative importance of the different revenue sources for specialty services overtime:
    • Advertising revenues, which totalled $1.2 billion in 2015, were virtually unchanged from 2011, while BDU subscribers’ revenues have grown by 10.2% a year, on average in the last five years. Consequently, BDU subscriber revenue’s share of total revenues has steadily increased from 38.7% in 2011 to 46.9% in 2015, while that of advertising revenues declined from 42.6% to 35.1% over the period.
  • For the first time since 2009, category A specialty services reported a year-over-year decline in revenues (-1.7% or -29.0 million), partly attributable to a 5.8% decrease in advertising revenues. Yet, these services earned 49.1% of total specialty services’ revenues.
  • Revenues of category C services continued to trend upward in 2015 with a 7.0% gain. This growth came from 3 sports-related service, namely TVA Sports, Sportsnet and Sportsnet One.
  • Total expenses for specialty services increased by $97.8 million (4.0%) in the past year.
  • Specialty services, notably category A services with a 32.4% PBIT margin, were the most profitable of all types of services in 2015.

Pay Services

  • There were 9 pay services in operation in 2015:
    • Their revenues decreased by 2.6% relative to 2014 to $424.0 million. Since 2011, pay services revenues have decreased by a total of $45.0 million, or by 9.6%.
    • Expenses rose by $32.6 million (10.3%) to $349.9 million in the past year. Notably, Canadian Programming Expenditures (CPE) increased by $20.9 million (29.4%) since 2014 to $92.1 million in 2015.
    • These services remained profitable in 2015 with an average PBIT margin of 15.0%.

On-Demand Services (PPV and VOD)

  • On-demand services continued on their downward trend in 2015:
    • The 24 on-demand services (8 PPV and 16 VOD) operating in 2015 reported revenues of $314.4 million, down $38.3 million (10.9%) from 2014, and $72.4 million (18.7%) from 2011.
    • Expenses were up 1.6% ($5.5 million) to $353.2 million in 2015; CPE rose by 51.0% ($12.7 million) in the past year, and by 123.0% ($20.7 million) relative to 2011.
    • On demand services reported a significant drop in profitability in 2015; their PBIT margin fell 14.8 percentage points between 2014 and 2015 to -21.4%.

Specialty, Pay, Pay-Per-View & Video-On-Demand Individual Services

Figure 3: Financial Performance of Top 10 Highest Grossing Individual Services

Figure 3
Highest Grossing Services Ownership Group Revenue $ millions P.B.I.T. Margin
The Sports Network (TSN) BCE 442,840 26.2
Sportsnet Rogers 360,368 14.9
Le Réseau des Sports BCE 162,477 11.9
The Movie Network BCE 120,564 3.4
Discovery Channel BCE 97,373 24.0
CBC News Network CBC 87,952 8.9
Sportsnet One Rogers 86,907 41.4
TVA Sports Groupe TVA 81,786 -47.6
Movie Central Corus 81,734 -8.3
W Network Corus 79,862 45.3

Specialty Services

Figure 4: Program Expenditures


This figure presents program expenditures for specialty services in 2015 and shows two diagrams decomposing program expenditures into more detailed components. 
Diagram 1: The first diagram is a hierarchical chart of program expenditures. The top box presents total program expenditures and the three sub-boxes presents Canadian Programming Expenditures (CPE), non-Canadian programming expenditures and production expenditures. The information presented in each box is as followed:
•	Total programming & production expenditures were 2.0 billion dollars
•	Canadian Programming Expenditures (CPE) were 1.5 billion dollars
•	Non-Canadian Programming Expenditures were 434 million dollars
•	Production Expenditures were 55 million dollars Diagram 2: The second diagram is composed of one pie chart that presents the share of Canadian Programming Expenditures (CPE) for each of the following categories:
•	Expenditure in Sports represented 46% of specialty service CPE
•	Expenditure in Information represented 32% of specialty service CPE
•	Expenditure in Music and Entertainment represented 18% of specialty service CPE 
•	Expenditure in others programming represented 4% of specialty service CPE
  • Specialty services reported program & production expenses of $2.0 billion in 2015, up by $107.6 million (5.7%) from 2014.
  • Specialty services’ program and production expenses were composed of:
    • $54.9 million in Production Expenditure;
    • $434.2 million in Non-Canadian Programming Expenditure; and
    • $1.5 billion in Canadian Programming Expenditure (CPE).
  • Canadian Programming Expenditures (CPE) rose by $103.2 million (7.4%) to reach $1.5 billion in 2015. Of that amount:
    • 27.2% ($409.9 million) of specialty services’ CPE was spent on acquisitions from independent producers, up $34.1 million (+9.1%) from 2014;
    • $254.0 million was spend on programs of national interest (PNI) in 2015, down $27.6 million (-9.8%) compared to 2014;
    • $689.4 million was spent on sports programming, an amount that represented 45.7% of total CPE in 2015. Of note, spending on that category of programming was up by $145.4 million (26.7%) in the past year, partly as a result of the acquisition of NHL programming rights by Rogers and Groupe TVA, notably.
  • This year’s publication includes, for the first time, broadcasters’ programming spending for the Animation category, and children’s programming.  In 2015, specialty services spent:
    • $48.0 million on animation programming
    • $114.8 million on children’s programming
  • Non-Canadian programming expenditures increased by $45.0 million (11.6%) in 2015.
    • Notably, expenditures on non-Canadian sports programming increased by $17.4 million (17.4%), while spending on drama, film and animation non-Canadian programming rose by a combined $18.8 million (12.4%).
Date modified: