Broadcasting
Policy
Monitoring
Report
2003

Radio
Television
Broadcasting Distribution
Social Issues
Internet

For additional copies of the report, please contact:

Documentation Centre
Canadian Radio-television and
Telecommunications Commission (CRTC)
Les Terrasses de la Chaudière
Central Building
1 Promenade du Portage
Gatineau, Quebec

Mailing Address:
CRTC
Ottawa, Ontario
Canada
K1A 0N2

Telephone: 1 (819) 997-2429
1 (877) 249-2782 (toll-free)
TDD: 1 (877) 909-2782 (toll-free)

This publication is available electronically: www.crtc.gc.ca

This publication can be made available in alternative format upon request.

Ce document est également disponible en français.

ISBN # BC9-1/2003E-HTML
             0-662-35591-1

18 December 2003

Introduction

This is the fourth edition of the CRTC's Broadcasting Policy Monitoring Report, the 2003 version continues to measure the evolution of the Canadian broadcasting system. The Broadcasting Policy Monitoring Report was developed to provide an on-going assessment of the impact of CRTC regulations, policies and decisions¹ towards the achievement of the objectives of the Broadcasting Act. As in the past, we hope that this report will help to foster a more open and better-informed public discussion of broadcasting policy in Canada. The Commission invites parties to use the report to enrich their participation in our regulatory policy and licensing proceedings.

The 2003 edition updates the performance indicators and continues the trends outlined in previous reports. In addition, the 2003 report reviews the program signal theft issue and the Commission's role in resolving competitive disputes. A comparison of the viewing to, and scheduling of, both English and French-language Canadian drama/comedy programming across the Canadian broadcasting system between 1993 and 2002 is also provided.

The data and information used as the basis of the CRTC's policy monitoring is drawn from many sources. These sources include (1) information filed by participants in the normal course of the Commission's hearings and public proceedings; (2) information obtained from Statistics Canada; (3) audience measures from the Bureau of Broadcast Measurement (BBM) and Nielsen Media Research; (4) the Annual Financial Returns filed by CRTC licensees; (5) programming information filed as part of licensees' television logs; (6) the Commission's ownership records and radio compliance monitoring results; and (7) publicly available information, such as annual reports from publicly traded companies, CRTC decisions and public notices.

The CRTC is in a unique position to cross-analyze the television logging information and BBM viewing data, thus being able to track the level of viewing to Canadian programming across the Canadian broadcasting system.

The report is sub-divided in six sections: Overview, Radio, Television, Broadcasting Distribution, Social Issues and Internet.

Interested parties are welcome to provide comments for improvements or additions to future editions of the report and can do so by forwarding them to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2 or electronically at info@crtc.gc.ca .

The Broadcasting Policy Monitoring Report is also available electronically at www.crtc.gc.ca/ENG/publications/reports.htm

Table of contents

I. Overview

A. Diversity of Programming in the Canadian Broadcasting System
B. Diversity of Voices in the Canadian Broadcasting System
C. Advertising Revenue by Media
D. Trends in Television Viewing – Anglophones/Francophones
E. Competitive Disputes

II. Radio

A. Number of Commercial Radio Stations in Canada
B. Radio Tuning
     1. Tuning Trends
     2. Digital Radio
C. Ownership
     1. Revenues of the Top 10 Ownership Groups
     2. "Top 10" by Total Hours Tuned
D. Competitive Licensing
E. Canadian Talent Development (CTD)
     1. Applications for New Radio Licences
     2. Transfers of Control or Ownership (benefits)
     3. Renewal of Radio Licences
F. Diversity of Formats
G. Popularity of Formats
H. Promotion of a Financially Sound Sector
     1. Financial Performance
          a) Total Revenues – AM and FM
          b) Profits Before Interest and Taxes (PBIT) Margins
          c) Jointly Operated AM Stations
I. Promoting the Airplay of Canadian and French Vocal Music
J. Campus Radio
K. Community Radio
L. Ethnic Radio
M. Native Radio
N. Religious Radio
O. Low Power Radio

III. Television

A. Audience
     1. Average Weekly Hours Per Viewer
     2. Average Daily Viewing Hours
     3. Viewing Share by Station Group
     4. Viewing Share by Ownership Group
     5. Viewing to Canadian Programming
          a) % Viewing to Canadian Programming – 6 a.m. to 2 a.m.
          b) Distribution of Viewing by Program Type
B. Canadian Priority Programming
     1. Scheduling of Priority Programs
     2. Drama
C. Financial Performance
     1. Revenues
     2. CBC Conventional Television Advertising Revenues
     3. Aggregate Profits Before Interest and Taxes (PBIT) Margins (%)
D. Eligible Expenditures on Canadian Programming (CPE)
     1. English-Language
     2. French-Language
     3. Ethnic Specialty Services
E. Canada's Independent Production Companies
F. Specialty, Pay, PPV and VOD Services
     1. Financial Results for Pay, PPV and Specialty Analog & Digital Services
G. Companies with Significant Ownership Interests in Specialty, Pay, PPV Analog and Digital Services
H. Ethnic Television Stations
     1. Over-the-air Ethnic Television Stations
          a) Montréal
          b) Toronto
          c) Vancouver
     2. Ethnic Pay & Specialty Services
          a) Analog Ethnic Specialty Services
          b) Category 2 Digital Ethnic Pay & Specialty Services
I. Native Television Services
J. Religious Television Stations
     1. Over-the-air Religious Television Stations
     2. Specialty Religious Services
     3. Foreign Religious Services
K. The National Public Broadcaster
     1. Over-the-air Conventional Television Stations
     2. Specialty Services
L. House of Commons
M. Foreign Satellite Services Authorized in Canada
N. Tangible Benefits Resulting from the Transfers of Ownership or Control of Television Broadcasting Undertakings

IV. Broadcasting Distribution

A. Promoting Effective Competition
     1. Subscriber Levels of Incumbent and Alternative BDU Delivery Systems
     2. Rate Deregulation of Incumbent BDUs
B. Ensuring Contributions to Canadian Programming and Local Expression
     1. Contributions to Programming Funds
     2. Total Community Channel Expenses
     3. Number of Systems Maintaining a Community Channel
C. Affordability of Basic and Non-Basic Service Rates
D. Ensuring a Financially Strong Sector
     1. Total Revenues of Distributors
     2. Profit Before Interest and Taxes (PBIT) Margins
     3. Return on Investment (ROI)
E. Concentration / Vertical Integration
     1. Top 6 Cable Corporations by Total Basic Subscribers
     2. Pay & Specialty Services Owned by Top Five Distributors or Their Affiliates
F. Promoting Digital Technology
G. Distribution of Specialty Services in the Official Language of the Minority
H. Program Signal Theft

V. Social Issues

A. Programming Standards
     1. Complaints
     2. Canadian Broadcast Standards Council
     3. Advertising Standards Canada (ASC)
     4. Cable Television Standards Council (CTSC)
B. Accessibility
     1. Access for Persons Who Are Hearing Impaired
     2. Access for Persons Who Are Visually Impaired
     3. Current Requirements
     4. National Reading Services
C. Cultural Diversity

VI. Internet

A. Internet Use
     1. Computer Ownership by Canadian Households
     2. Internet Access
          a) Internet Access by Location
          b) Internet Access in Canadian Households
          c) Frequency and Duration of Internet Use
          d) Profile of Canadians Without Internet Access
          e) Internet Activities
          f) Type of Internet Access Used at Home
          g) The Canadian Internet Service Provider (ISP) Industry
     3. The Effect of Internet Use on Broadcast Media
     4. Trends in Internet Advertising and E-Commerce

Glossary

I. Overview

A. Diversity of Programming in the Canadian Broadcasting System

Section 3(1)(i) of the Broadcasting Act (the Act) states, in part, that the programming provided by the Canadian broadcasting system should

(i) be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes,
(ii) be drawn from local, regional, national and international sources,
(iii) include educational programs and community programs, […].

To further the above noted broadcasting policy, the Commission ensures that Canadians have access to a diversity of programming drawn from a variety of sources. The following tables provide a summary of the variety of television and radio services that are available in the Canadian broadcasting system. A table summarising the number and types of Canadian broadcasting distribution undertakings is also provided.

Table 1.1: Canadian Television Services

Excludes rebroadcasters and exempt television services.
*Includes bilingual (English and French) and Native services.
(1) Includes satellite to cable services.
(2) Includes only digital category 1 & 2 and VOD services launched prior to November 3rd, 2003.
Source: CRTC – APP Report 1200 (November 10, 2003) and CBC 2002-03 Annual Report.

Table 1.2: Canadian Radio Services

*Includes bilingual (English and French) and native services.
Excludes rebroadcasters and exempt radio services.
Source: CRTC – APP Report 1200 (November 10, 2003) and CBC 2002-03 Annual Report

Approximately 82% of Canadian households receive the basic service of a Canadian broadcasting distribution undertaking. This table provides a breakdown of the number and types of Canadian broadcasting distribution undertakings.

Table 1.3: Number of Broadcasting Distribution
Undertakings (BDUs)

Notes:
1. Source for cable undertakings is the CCTA's 02-03 annual report. This information is of September 2002 and is based on Mediastats databases.
2. Source for DTH, MDS and STV undertakings is the CRTC APP1200 Report run Nov. 6, 2003.

B. Diversity of Voices in the Canadian Broadcasting System

The Commission's mandate with regard to the diversity of voices in markets across Canada originates notably in sections 3(1)(d)(i), 3(1)(d)(ii) and 3(1)(i)(iv) of the Broadcasting Act.

Section 3(1)(d)(i) states that the Canadian broadcasting system should "serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada".

Section 3(1)(d)(ii) states that the programming provided by the Canadian broadcasting system should "encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view".

Section 3(1)(i)(iv) states that the programming provided by the Canadian broadcasting system "should provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern".

The Commission implements the above noted policy in its various policies and decisions. For example, in the Television Policy, the Commission continued its policy which generally permits ownership of no more than one over-the-air television station in one language in a given market. This policy assists in providing a diversity of voices in a given market.

In the Commercial Radio Policy, the Commission sought to strike a reasonable and acceptable balance between its concerns for preserving a diversity of news voices in a market, and the benefits of permitting increased consolidation of ownership within the radio industry.

In the Licence Renewals for the Television Stations Controlled by CTV and Global – Decisions 2001-457 and 2001-458 respectively, and the Licence renewals for the French-language national network TVA and CFTM-TV – Decision 2001-385, the Commission considered that it had a responsibility to ensure that a sufficient diversity of broadcasting news and information voices remains as consolidation continues to take place between broadcasters and related industries.

The following table monitors the evolution of the diversity of ownership and the diversity of programming choices in the 3 largest Canadian cities between 1991, 2001 and 2002. The city of Montréal has been subdivided into two markets, English-language and French-language, based on the broadcast language of the programming service. The table compares the following for each of the markets in each of the years:

• The number of different owners of television services available in the market that broadcast news and public affairs programming along with the total number of such services;
• The number of different owners of radio stations and daily newspapers available in each market along with the total number of radio stations and daily newspapers in the market.

Table 1.4: Comparison of the Diversity of Ownership and Programming
Choices in Montréal, Toronto and Vancouver
1991 – 2001-2002

Notes:
1. BBM Fall sweeps extended market data and CRTC research were used to determine the number of television services providing news and public programming.
2. BBM Fall sweeps central market data were used to determine the number of radio stations available in each market. It was assumed that all radio stations and newspapers available provided news and public affairs programming.
3. Although the number of foreign services is indicated, the number of foreign ownership is not provided.
4. Newspapers include only Canadian daily newspapers published locally. 1991 and 2001 figures have been restated to reflect additional ethnic daily newspapers.
5. Only out of market TV and radio services attracting a minimum of 0.1% audience share have been included.

Between 1991 and 2002, the number of available television and radio services has increased in each of Canada's three largest markets.

Since 1991, a significant increase in the licensing of French and English-language Canadian pay and specialty services has added to the diversity of viewing options of Canadians. In addition, the number of U.S. specialty services available has also increased. Increasing diversity in television ownership is evident in all three markets between 1991 and 2002.

The revised ownership policy in the 1998 Commercial Radio Policy, Public Notice CRTC 1998-41, 30 April 1998, has resulted in a decrease in radio ownership diversity between 2001 and 2002 in the Montréal French-language market and in the Toronto radio market between 1991 and 2002. The number of Canadian radio stations controlled by different ownership available in the Montréal French-language radio market and the Toronto radio market in 2002 were 14 and 25 respectively.

In each of the markets there has been an increase in cross-media ownership between 1991 and 2002. Cross-media ownership is defined as the same owner controlling more than one type of media in the market. Between 1991 and 2002, the number of cross-media owners increased from 1 to 2 in the Montreal English-language market, from 1 to 3 in the Montreal French-language market, from 4 to 6 in the Toronto market, and from 2 to 4 in the Vancouver market.

Not included in the above charts is the on-going development of the Internet and its potential impact on the diversity of voices and information available in markets across Canada. As of March 2003, 68%¹ of Canadians reported having access to the internet.

C. Advertising Revenue by Media

The following table and pie chart outline the trends in advertising revenues by the different media.

Table 1.5: Advertising Revenue by Media
($ millions)

Sources: Carat Expert, Panorama Publicitaire 2001 (1995 -2000); Carat Expert estimates for 2001 and 2002
Notes:
(1) Includes private conventional, CBC/SRC, specialty services, other public, educational, religious and not-for-profit services.
(2) Excludes classified ads.

 Chart 1.1: Share of Advertising Revenue by Media, 2002

The relative levels of advertising revenue earned by the different media have remained generally constant since 1995. For example, television advertising achieved a 35% share of the pie in 1995, as compared to 34.4% in 2002. Radio's levels have remained unchanged at 14.3% in 2002.

D. Trends in Television Viewing – Anglophones/Francophones

The following charts reveal the trends in viewing by Canadian anglophones and francophones to all television services available in Canada, Canadian and foreign, sub-divided by genre for the years 2000 to 2002. The viewing by genre² is further sub-divided between viewing to Canadian and foreign programs. The charts are based on BBM and CRTC research data for a 4-week period in the Fall of each year.

Chart 1.2: Viewing by English-language³ Viewers by Program Type
All Canada – All Services (Canadian and Foreign)
BBM Fall 2000 to 2002, 6 a.m. – 2 a.m.
Average Weekly Hours (000,000)

Excludes viewing to programs where Canadian content and program type could not be identified.

There has been little change to the viewing habits of Canadian anglophones in the past 3 years.

The chart reveals the popularity of drama/comedy programming to anglophone viewers. In each of the years drama/comedy programming is about twice as popular as viewers' second pick programming.

The viewing to Canadian programs by anglophones differs significantly between the genres. Viewing of news and analysis & interpretation programming is predominantly to Canadian programs. In contrast, viewing by anglophones to drama/comedy programming is predominantly to foreign programs. Overall viewing to Canadian programs by anglophones remains unchanged at approximately a third of total viewing.

Viewing to other programming has increased 26% since 2000. Roughly 70% of this increase is due to increased viewing to general entertainment and human interest programming, reflecting the recent popularity of reality style programs. The remaining increase is due to viewing of educational programming.

Chart 1.3: Viewing by French-language⁴ Viewers by Program Type
All Canada – All Services (Canadian and Foreign)
BBM Fall 2000 to 2002, 6 a.m. – 2 a.m.
Average Weekly Hours (000,000)

Excludes viewing to programs where Canadian content and program type could not be identified.

Drama/comedy programming is the most popular genre with francophone viewers, with news and analysis & interpretation programming a close second.

Viewing trends by francophones is predominantly to Canadian programs in all genres, with the exception of drama/comedy programs where the viewing has remained evenly split between Canadian and foreign programs. Overall viewing to Canadian programs by francophones has remained in the 70% range.

E. Competitive Disputes

The Competitive Disputes Team within the Broadcasting Directorate of the CRTC was introduced in 2000 to more effectively process and resolve disputes in the increasingly competitive broadcasting industry.⁵ Disputes can generally be categorized as follows: 1) between broadcasting distributors and the programming services that they carry on access issues and the related terms of carriage; 2) between competing broadcasting distributors over access to buildings and the end-user; and 3) between programmers regarding rights acquisition and markets served.

The Commission employs alternative dispute resolution techniques, such as fact-finding meetings, mediation and staff-opinions to attempt to break deadlocks and assist disputing parties to resolve their differences. When this proves unworkable, the Commission can determine on disputes by way of "final-offer" arbitration. These processes are usually conducted on a confidential basis as the matters in dispute often involve commercially sensitive information.

Alternatively, disputes may arrive at the Commission as allegations of undue preference or disadvantage by a party vis-à-vis the actions of another party. In such situations, the complainant seeks a Commission ruling that the given preference or disadvantage has material and serious consequences that are contrary to the public interest for the complainant and/or the Canadian broadcasting system.

Number of Disputes

Practices and procedures for resolving competitive and access disputes, Public Notice CRTC 2000-65, 12 May 2000, noted that parties would generally be required to attempt to resolve their differences through private, third party mediation, bilateral negotiations or some other means before the Commission would deal with the dispute. The intent of the framework was to use the Commission as a last recourse, if the parties proved unable, despite bona fide efforts, to achieve resolution on their own.

As of 30 September 2003, the Commission had received 83 dispute files. The majority of these, 61, were processed by way of the dispute resolution measures set out in sections 12 to 15 of the Broadcasting Distribution Regulations (the Regulations). Only two of these disputes ultimately required the issuance of a Commission determination following submission of "final offers" by the parties involved. The remaining 22 disputes involved allegations of undue preference or disadvantage under section 9 of the Regulations.

The average number of days to completion for all disputes was 146 days, with sections 12 to 15 disputes taking an average of 136 days to complete and with section 9 allegations an average of 205 days. When items, of all types, could be concluded without a determination by the Commission (17), an average of 67 days to completion was experienced.

Utilization of dispute resolution mechanisms at the Commission is increasing. In calendar years 2001 and 2002, 16 and 37 dispute resolution files were received respectively by the Commission. In the first 6 months of 2003, the Commission has received 29 complaint files.

Types of Disputes

Of the 83 disputes the Commission received between May 12, 2000 and September 30, 2003, 26 involved the negotiation or application of affiliation agreements, in particular the determination of an appropriate wholesale rate, between broadcasting distributors and specialty service providers. Thirteen disputes concerned multiple unit dwellings (MUDs). These involved issues of access to inside wire and/or allegations of breach of winback rules or other perceived unfair marketing practices as well as undue interference with competitive access by broadcasting distributors to MUDs.

More recently, 27 disputes involving a desire for the conduct of audits to substantiate reported subscriber totals or accounting methodology have been received by the Commission. The balance of 17 disputes involved a variety of subject matters including the inability to obtain programming rights (9), channel placement (4) and alleged violations of conditions of licences (4).

II. Radio

A. Number of Commercial Radio Stations in Canada

• The following tables list the number of commercial AM and FM radio stations by province over the past 5 years.

Table 2.1: Number of Commercial Radio Stations in Canada
AM & FM – All Languages

Source: CRTC Financial Database (includes stations that file annual returns as of August 31^st of each year)

Table 2.2: Number of Commercial FM Stations in Canada
– All Languages

Source: CRTC Financial Database (includes stations that file annual returns as of August 31^st of each year)

Table 2.3: Number of Commercial AM Stations in Canada
– All Languages

Source: CRTC Financial Database (includes stations that file annual returns as of August 31^st of each year)

• Between 1998 and 2002, 93 new commercial FM stations were introduced into the system. In comparison, there are 51 fewer commercial AM stations in operation.

Table 2.4: Number of AM to FM Conversions per Calendar Year

Source: CRTC Decisions

B. Radio Tuning

1. Tuning Trends

• The following charts and tables outline the total hours tuned to radio in an average week during the fall surveys of 1997-2002. Chart 2.1 and Table 2.5 provide the total hours tuned over the entire broadcast day while Chart 2.2 and Table 2.6 include the total hours tuned between 6 a.m. and 6 p.m.
• The purpose of Tables 2.5 and 2.6 is to monitor the on-going use of radio by Canadians.

Table 2.5: Radio Tuning in an Average Week, All Persons 12+,
5 a.m. to 1 a.m. Total Hours Tuned ("THT") (000's)

Note: Other is principally over-the-air tuning to U.S. border stations
Source: BBM Fall 1997 to Fall 2002

Table 2.6: Radio Tuning in an Average Week, All Persons 12+,
6 a.m. to 6 p.m. Total Hours Tuned ("THT") (000's)

Source: BBM Fall 1997 to Fall 2002

• The total average weekly hours tuned in Fall 2002 were slightly higher than the totals for Fall 2001, both over the entire day (5 a.m. to 1 a.m.) and the 6 a.m. to 6 p.m. period.

• The following charts are based on Tables 2.5 and 2.6 and serve to demonstrate the dominance of FM radio in both the English and French language markets.

Chart 2.1: Total Hours Tuned in an Average Week,
5 a.m. to 1 a.m., Fall 2002

Chart 2.2: Total Hours Tuned in an Average Week,
6 a.m. to 6 p.m., Fall 2002

• In the Fall of 2002, 93.0% of Canadians aged 12 and over listened to the radio at least 15 minutes per week, as compared to 94.0% in 1998.
• The average hours per week tuned per listener have remained in the 22 hour per week range since 1990.
• The average hours per week tuned per capita have remained in the 20 hour per week range since 1996. (Source: BBM Radio Databooks)

2. Digital Radio

• The Commission issued A Policy to Govern the Introduction of Digital Radio, Public Notice CRTC 1995-184, on 29 October 1995.
• As of August 2003, 56 licences for transitional digital radio undertakings (DRU's) had been granted. Of these licences, 42 were issued to existing commercial radio stations and 14 to existing CBC stations.
• These 56 stations are located in 4 different markets:
            Montréal: 12, Toronto: 24, Vancouver: 14 and Windsor: 6
• To find out more about digital radio, you can visit the following website: http://www.digitalradio.ca

C. Ownership

• In revising its ownership policy in the 1998 Commercial Radio Policy, Public Notice CRTC 1998-41, 30 April 1998 (Commercial Radio Policy) the Commission focused on developing a model that would allow for some measure of consolidation, while taking into account its general concerns for preserving a diversity of news voices and maintaining competition.
• Table 2.7 through 2.12 monitor ownership consolidation in the radio industry.

1. Revenues of the Top 10 Ownership Groups

Table 2.7: Ten Largest Radio Operators Radio
Revenue & National Share

Source: CRTC Internal Report "Ownership August 2002", CRTC Financial Database
Notes: Radio undertakings include networks.
Reflects ownership structure according to licensees' filing of annual returns at August 31 of each year. Ownership transactions not taking effect until after August 31 are not reflected until the following year.
Corus acquired control of Métromédia CMR Broadcasting Inc. in 2001.
Jim Pattison Industries acquired the radio stations of Monarch Broadcasting Ltd. in 2001.
Rogers acquired 14 stations and one network from Standard in 2002.
Standard acquired 4 stations from Craig and 64 stations plus 3 networks from Télémédia in 2002.
Newcap acquired 15 stations from Standard in 2002.
Astral acquired 19 stations and 6 networks from Télémédia in 2002.
A dash (-) indicates that a company was not in the top 10 in a given year.

• Astral, as represented in all tables, reflects the transaction that was approved pursuant to Decision 2002-90, the acquisition of assets from Télémédia. It should be noted that this transaction was finalized in October 2002.
• Currently eight Astral stations are being held in trust pending their sale: CKRS, CJRC, CHLN, CHLT, CKTS, CKAC, CHRC and CFOM-FM.
• The number of undertakings owned by the top 10 radio operators and their share of national revenue continue to rise, from 148 and 61% respectively in 1998 to 330 and 79% in 2002.

Table 2.8: Radio Revenues of the Largest
French Language Radio Operators

Source: CRTC Financial Database

Table 2.9: Radio Revenues of the 5 Largest
English Language Radio Operators

Source: CRTC Financial Database

2. "Top 10" by Total Hours Tuned

Table 2.10: Tuning to the Ten Largest Radio Operators

Note: Total private and all radio listening hours include tuning to non-English and non-French stations (i.e. Multilingual and Native stations).
Sources: CRTC Internal Report "Ownership August 2002", July 2002
              BBM, Fall 2000 to 2002

• The tuning share of the ten largest radio groups has risen considerably between 1998 and 2002, from 53% to 64%.

Table 2.11: Tuning to the Two Largest French Language
Radio Operators, 2002

Source: 2002 BBM Fall Survey

• Astral Radio Inc. garnered 60% of French language radio revenues and 46% of the hours tuned in 2002.

Table 2.12: Tuning to the Five Largest English Language
Radio Operators, 2002

Source: 2002 BBM Fall Survey

D. Competitive Licensing

• In the Commercial Radio Policy, the Commission determined that in order to encourage competition and choice it would no longer apply the criteria outlined in the Radio Market Policy, Public Notice 1991-74, 23 July 1991. The elimination of the Radio Market Policy combined with the revised common ownership policy have resulted in numerous competitive processes for new FM stations in markets across Canada.
• In Decision CRTC 99-480, 28 October 1999, the Commission outlined the factors that will generally be among those relevant to the evaluation of competitive applications. The Decision also noted that the relative weight and significance of the factors would vary depending on the specific circumstances of the market concerned.
• The following table reveals the factors that were noted in the Commission's decisions as contributing to the success of competitive applications since the introduction of the Commercial Radio Policy.

Table 2.13: Factors Contributing to Successful Applications for
Commercial Radio Licences Considered in Competitive
Processes Following the 1998 Commercial Radio Policy

Source: CRTC Decisions

• "Can. Con." refers to applications that proposed to exceed the minimum regulatory requirement of Canadian content.
• Of the 48 new licences awarded via competitive processes, only 8 were awarded to a licensee included in the 10 largest commercial radio operators.

E. Canadian Talent Development (CTD)

• The Commission reviews radio licensee contributions to Canadian talent development (CTD) in the following instances:
  - Applications for new radio stations
  - Transfers of control or ownership (benefits)
  - Renewal of radio licences

1. Applications for New Radio Licences

• Since the introduction of the Commercial Radio Policy in 1998 the Commission has licensed 48 new radio stations through competitive processes in markets across Canada through to October 2003. These successful applicants have committed over $27 million to CTD initiatives over their initial licence terms.
• In addition, there were 36 new radio licences or AM to FM flips granted without a competitive process. These licensees committed a combined $395,000 towards CTD initiatives.

2. Transfers of Control or Ownership (benefits)

• As outlined in the Commercial Radio Policy, applicants for the transfer of ownership or control of radio stations must make commitments that represent a minimum direct financial contribution to CTD of 6% of the value of the transaction. Three percent is to be allocated to the StarMaker/RadioStar music marketing and promotion fund, two percent to either FACTOR or MusicAction and one percent at the discretion of the purchaser to other eligible endeavours.
• Since the adoption of the 1998 Commercial Radio Policy to October 19, 2003, there have been 75 Commission approved control and/or ownership transactions involving 311 radio stations.
• CTD benefits from these transactions have totalled $ 92.6 million.

Table 2.14: Value of Radio Transactions and Corresponding Transfer Benefits
for the period May 1, 1998 to August 31, 2003

* Value determined by the Commission for the purpose of calculating transfer benefits.
Source: CRTC Decision and Administrative approvals as of October 19, 2003

3. Renewal of Radio Licences

• As part of their licence renewal applications, all licensees of private commercial radio stations are asked to make an annual financial commitment to CTD.
• In Contributions by radio stations to Canadian talent development _ a new approach, Public Notice CRTC 1995-196, 17 November 1995, the Commission, in conjunction with the industry, established an approach that would ensure a minimum annual payment of $1.8 million to eligible third parties associated with CTD.
• The following table indicates the amount of money contributed to CTD initiatives in the context of licence renewals.

Table 2.15: CTD Annual Contributions – Licence Renewals

Source: CRTC Financial Database, Annual Returns

F. Diversity of Formats

• In the development of the Commercial Radio Policy the broadcasting industry submitted that an increase in consolidation in markets would lead to an increase in the diversity of formats.
• The following tables (tables 2.16 to 2.19) compare the diversity of radio formats available in a sample of markets across Canada from 2000-2002.
• Note that formats change frequently. The format information used in tables 2.16 to 2.19 is based on the BBM Fall market books for the respective years in conjunction with other reference material.
• Overall, the number of distinct radio formats available in the sample of markets has increased slightly since the introduction of the Commercial Radio Policy.

Table 2.16: Formats of Market Stations for Vancouver,
Kelowna, Calgary and Regina

Table 2.17: Formats of Market Stations for Sudbury, London,
Toronto and Ottawa-Gatineau

Table 2.18: Formats of Market Stations for Montréal,
Québec and Saguenay

Table 2.19: Formats of Market Stations for Halifax and St. John's

G. Popularity of Formats

Chart 2.3: Ten Most Popular English-Language Formats – 2002

Chart 2.4: Ten Most Popular French-Language Formats – 2002

H. Promotion of a Financially Sound Sector

1. Financial Performance

a) Total Revenues – AM and FM

• One of the Commission's objectives in developing the 1998 Commercial Radio Policy was to ensure a strong, well-financed radio industry that is able to achieve its obligations under the Broadcasting Act.

Table 2.20: Radio Revenues in Canada
1998 – 2002

Note: Ethnic stations are included under English Radio.
Source: FDB Financial Summary Reports

Chart 2.5: Radio Revenues

• Total revenues for English language FM radio grew by 5.4% in 2002, while total revenues for English language AM radio declined by 3.4% in 2002.
• Total revenues for French language FM radio have grown at a relatively constant pace of between 5% to 8% since 1998, and grew by 5.7% in 2002.
• French language AM radio continues to see a steady decline in the number of stations, decreasing from 20 in 2001 to 18 in 2002. Revenues grew by 3.0% over the same period.

b) Profits Before Interest and Taxes (PBIT) Margins

Table 2.21: PBIT Margins – AM and FM (%)

Note: Ethnic stations are included under English language Radio.
Source: FBD Financial Summary Reports 1998-2002

Chart 2.6: Radio PBIT Margins

c) Jointly Operated AM Stations

• Many AM stations are jointly operated with at least one other FM station in their market. When viewed as a combined entity these joint operations, both English language and French language, are profitable.
• In 2002 stand-alone AM stations were also profitable, both in the English and French language markets.

Table 2.22: Jointly Operated & Stand Alone AM Stations

Source: CRTC Financial Database

I. Promoting the Airplay of Canadian and French Vocal Music

Table 2.23: Canadian Content and French Vocal Music

Note: Radio stations are analyzed for compliance to their regulated Canadian music and French vocal music requirements during the licence renewal process. The above results are based on a limited sample of stations and are not necessarily representative of the radio community as a whole. The Commission's approach to radio licensees found in non-compliance is outlined in Practices Regarding Radio Non-Compliance, Circular No. 444, 7 May 2001.
Source: CRTC, evaluation of licence renewal applications during 2002

• The Commercial Radio Policy increased the required number of category 2 musical selections broadcast each week that must be Canadian from 30% to 35% for commercial AM and FM radio stations.
• The Commercial Radio Policy maintained the level of French-language vocal category 2 music selections to be broadcast each week at 65% and introduced the requirement of 55% French-language vocal category 2 music Monday through Friday between 6 a.m. and 6 p.m.
• These requirements have since been incorporated in the Radio Regulations, 1986, as amended from time to time.

J. Campus Radio

• As stated in Campus radio policy, Public Notice CRTC 2000-12, 28 January 2000, there are two types of campus radio stations, community-based campus and instructional. A community-based campus station's programming is primarily produced by volunteers, who are either students or community members. The primary objective of an instructional campus station is the training of professional broadcasters.
• There are currently 49 campus stations licensed across Canada, 40 community-based campus stations and 9 instructional campus stations.
• Of the community-based campus stations, 6 are French, 33 are English and one is bilingual.
• Of the instructional campus stations, one is French and 8 are English.
• The majority of campus radio revenues comes from sources other than advertising, for example, revenues from the educational institution they are associated with, grants, the local community, fund-raising, etc.

Table 2.24: Revenues for Community-Based Campus Radio Stations

Sources: CRTC Financial Database
CRTC Licence Application System

Table 2.25: Revenues for Instructional Campus Radio Stations

Sources: CRTC Financial Database
CRTC Licence Application System

K. Community Radio

• As stated in Community radio policy, Public Notice CRTC 2000-13, 28 January 2000, there are two kinds of community radio stations: Type A and Type B. A community station is a Type A station if, at the time of licensing, no radio station other than the CBC is operating in the same language in all or part of its market. A community station is a Type B station if, at the time of licensing, there is at least one station, other than the CBC, operating in the same language in all or part of the same market.
• In addition to advertising revenues, community radio stations receive revenues from fund-raising, grants, and other sources.
• There are currently 42 Type A and 40 Type B community stations.
• Of the Type A community stations, 28 are French, 13 are English and one is bilingual.
• Of the Type B community stations, 19 are French, 19 are English, one is bilingual and one is multicultural.

Table 2.26: Revenues for Type A Community Stations ($'000)

Source: CRTC Financial Database

Table 2.27: Revenues for Type B Community Stations ($'000)

Source: CRTC Financial Database

L. Ethnic Radio

• The Commission revised its ethnic broadcasting policy in Ethnic Broadcasting Policy, Public Notice CRTC 1999-117, 16 July 1999.
• The Commission considered that the primary goal of the policy was to ensure access to ethnic programming to the extent practicable, given resource limitations. As one way of furthering this objective, the Commission has licensed ethnic radio broadcasters that specialize in providing ethnic programming.
• There are currently 15 ethnic radio stations broadcasting in Canada. The following tables provide the languages of programming broadcast by each of these stations. The stations are grouped by the markets they are licensed to serve. The information comes from each individual station's programming schedule, as of October 2003.
• The Commission has licensed two additional ethnic radio stations that had not commenced operations as of October 2003. In Ethnic FM radio station in Toronto, Broadcasting Decision CRTC 2003-115, 17 April 2003, a new ethnic station was licensed for Toronto. In Ethnic FM radio station in Montréal, Broadcasting Decision CRTC 2003-194, 2 July 2003, a new ethnic station was licensed for Montréal.

Table 2.28: Ethnic Radio, Vancouver

Table 2.29: Ethnic Radio, Edmonton, Calgary, Winnipeg

Table 2.30: Ethnic Radio, Toronto

Table 2.31: Ethnic Radio, Ottawa and Montréal

• The majority of CJWI-AM's ethnic programming is in French.

M. Native Radio

• Native radio is governed by the Native Broadcasting Policy, Public Notice CRTC 1990-89, 20 September 1990. The policy framework is designed to improve the quality and quantity of access by native broadcasters to the Canadian broadcasting system.
• These undertakings have a distinct role to play in fostering the development of aboriginal cultures and, where possible, the preservation of ancestral languages.
• The greatest concentration of activity in aboriginal broadcasting involves community-based radio stations in small remote locales.
• There are two types of Native radio stations:

• Type A: A native radio station is a Type A station if, at the time the licence is issued or renewed, no other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force.

• As a result of the Exemption order respecting certain native radio undertakings, Public Notice CRTC 1998-62, 9 July 1998, Type A stations are no longer required to hold a broadcasting licence from the Commission.

• Type B: A native radio station is a Type B station if, at the time the licence is issued or renewed, at least one other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force. There are currently 49 Type B native radio stations licensed.

Table 2.32: Revenues for Type B Native Stations ($'000)

Source: CRTC Financial Database

• The principal sources of revenue for Native radio stations are non-commercial.

N. Religious Radio

• The Commission's Religious Broadcasting Policy is set out in Public Notice 1993-78, 3 June 1993.
• The Commission's approach to religious broadcasting is based on the following principles:

• Recognition of alternative values: The policy recognizes the legitimate needs and interests of those who wish to receive various kinds of religious programming.
• The importance of balance: Licensees are required to provide balance on matters of public concern and the Commission considers that religion is a matter of public concern. Balance means that a reasonably consistent listener will be exposed to a spectrum of differing views on issues of public concern within a reasonable period of time.

• There are currently 55 radio stations in Canada with a format based on spoken word religious programming, and/or religious music programming, 25 are French and 30 are English.

O. Low Power Radio

• A new licensing policy for low power radio was issued in Policy framework for community-based media, Public Notice 2002-61, 10 October 2002. This new policy includes a definition of markets where low-power frequencies will be deemed to be scarce, circumstances where a low-power call for competing applications may occur and a priority system for assessing competing low power radio applications.
• The following table outlines the number of low and very low power radio stations in Canada as of August, 2003, by type:

Table 2.33: Number of Originating Low and Very Low Power Private English-
Language Radio Stations in Canada by Type

Source: CRTC Decisions

Table 2.34: Number of Originating Low and Very Low Power Private French-
Language Radio Stations in Canada by Type

Source: CRTC Decisions

Table 2.35: Number of Originating Low and Very Low Power Radio Stations
in Canada – Other than English or French Language

Source: CRTC Decisions

III. Television

A. Audience

1. Average Weekly Hours per Viewer

• BBM data indicates that the average total weekly hours per viewer 2+ increased in 2002 by approximately ½ hour.
• Nielsen Media Research reports an increase of 1.2 hours per week in 2002.

Chart 3.1: Average Weekly Hours per Viewer – All Persons 2+

Sources: BBM: 2002-2003 Television Data Book; Nielsen Media Research; CBC Research

• On a per capita basis in 2002, the average weekly hours for Nielsen and BBM were 26.3 and 21.6 hours respectively.

2. Average Daily Viewing Hours

Chart 3.2: Average Daily Viewing Hours - All Persons 2+
– BBM Fall 2002

• Thursday, Sunday and Monday continue to be the most popular television viewing days of the week, as reported by both Nielsen and BBM.

3. Viewing Share by Station Group

Table 3.1: Fall 1993 to Fall 2002 for All Persons 2+,
All Regions Excluding Québec,
Monday to Sunday, 6 a.m. to 2 a.m.

* BBM Fall 2001 sample was conducted during the promotional viewing period.
** Includes viewing to non-U.S. pay & specialty service
*** Includes viewing to House of Commons (CPAC), Provincial Legislatures, Cable Community Channel, Other Educational and Religious
- As of Fall 1997, moved CFMT from English-Language to Other-Language.
Source: BBM Fall 1993-2002

• The total viewing share of Canadian English-language television services, in all regions excluding Québec, has remained relatively constant since 1993.
• BBM reports¹ that Canadian English-language pay and specialty services have increased their share of total viewing by 17% since 1993, reaching a 22.8% share of viewing in fall 2002.
• Neilsen² Research data reports that the share for Canadian English pay and specialty services in all regions excluding Québec averaged 31.1% over the period of October 28 to November 24, 2002.

Table 3.2: Fall 1993 to Fall 2002 for All Persons 2+,
Province of Québec,
Monday to Sunday, 6 a.m. to 2 a.m.

* BBM Fall 2001 sample was conducted during the promotional viewing period.
** Includes viewing to non-U.S. pay & specialty service
*** Includes viewing to House of Commons (CPAC), Provincial Legislatures, Cable Community Channel, Other Educational and Religious
- As of Fall 1997, moved CFMT from English-Language to Other-Language.
Source: BBM Fall 1993-2002

• The total viewing share for Canadian French-language television services in Québec has remained relatively constant since 1993.
• BBM reports³ that Canadian French-language pay and specialty services have increased their share of total viewing by about 11.9% since 1993, reaching a 17.5% share of viewing in Fall 2002 in the province of Québec.
• Nielsen⁴ Research data reports that the share of French-language pay and specialty services in the province of Québec averaged 27.1% over the period of October 28 to November 24, 2002.

4. Viewing Share by Ownership Group

• In Building on Success – A Policy Framework for Canadian Television, Public Notice CRTC 1999-97, 11 June 1999 (the Television Policy), the Commission established that the renewal of all the conventional television licences held or controlled by a group will generally be considered by the Commission at the same time.
• This approach gives the Commission the opportunity to make a strategic assessment of the contribution of all aspects of a licensee's operations to the Canadian broadcasting system.
• Table 3.3 sets out the combined viewing share of conventional and specialty services controlled by the conventional English and French-language television ownership groups. This table reflects only those specialty services in which these groups have a 50% or greater ownership interest.
• This table shows that, on a combined basis, conventional television ownership groups have been able to maintain or increase their overall viewing share through acquisition and new specialty services.
• Table 3.4 sets out the combined viewing share of the pay, per-per-view (PPV) and specialty services controlled by the largest English and French-language ownership groups that are primarily Pay, PPV and specialty service operators. This table reflects only those services in which the groups have a 50% or greater ownership interest.

Table 3.3: Combined Viewing Share of Conventional and Specialty
Services Controlled, 50% or Greater, by Conventional
English and French-Language TV Ownership Groups

Sources: BBM Fall 1997 to 2002; Economic Analysis and Research Broadcasting Directorate, CRTC;
CRTC Acquisitions and Ownership Policy Section.
* BBM sample was conducted during the introductory promotional viewing period for digital specialty services.
(1) Percentage of direct and indirect voting interest;
(2) BCE Inc. holds a 68.5% voting interest in Bell Globemedia Inc; the 1997 viewing shares includes Baton stations and CTV Network (Baton acquired control of CTV Network in October 31, 1998); CTV acquired NetStar March 24, 2000 and therefore acquired controlling interest in TSN, RDS and Discovery specialty channels; BCE Inc. acquired controlling interest in CTV on December 7, 2000. BGM sold its interest in Canal Évasion January 2003.
(3) Manalta Investments Company Ltd. (Craig Family) holds 87.71% of the Voting interest of Craig Media Inc.
(4) Quebecor inc. directly and indirectly owns and control 54.72% of the voting interest of Quebecor Media Inc.
(5) Cogeco inc. holds through subsidiaries 60% of the voting interest of TQS inc.
(6) TVA conventional television stations & LCN were controlled by Vidéotron from 1997 to 2001. Quebecor acquired controlling interest of these services in 2002. TQS inc. conventional stations were controlled by Quebecor from 1997 to 2001. Cogeco acquired controlling interest in 2002. Refer to Chart 3.27 for details.

Table 3.4: Combined Viewing Share of Specialty Services Controlled,
50% or Greater, by the Three Largest English and French-
Language Ownership Groups that Are Primarily Pay,
PPV and Specialty Service Operators

Sources: BBM Fall 1997 to 2002; Economic Analysis and Research, Broadcasting Directorate, CRTC;
CRTC Acquisition and Ownership Policy Section
* BBM sample was conducted during the promotional viewing period for digital specialty services.
(1) Percentage of direct and indirect voting interest;

5. Viewing to Canadian Programming

a) % Viewing to Canadian Programming – 6 a.m. to 2 a.m.

Charts 3.3 and 3.4 outline the level of viewing to Canadian programs as a percentage of all viewing to all foreign and Canadian programs available in Canada.

Chart 3.3: Viewing to Canadian Programs as a Percentage of
all English-Language Programs

Source: BBM and CRTC Research

Chart 3.4: Viewing to Canadian Programs as a Percentage of
all French-Language Programs

Source: BBM and CRTC Research

b) Distribution of Viewing by Program Type

• Charts 3.5 through 3.16 compare the viewing levels to Canadian and foreign programs distributed by Canadian broadcasters by program type.
• The source for these charts is BBM and CRTC Research.

i) English-Language – Canadian Private Conventional TV

Chart 3.5: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.6: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

ii) English-Language _ CBC (owned & operated) and Affiliates

Chart 3.7: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.8: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

iii) English-Language – Canadian Pay & Specialty Services

Chart 3.9: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.10: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

iv) French-Language – Canadian Private Conventional TV

Chart 3.11: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.12: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

v) French-Language – SRC (owned & operated) and Affiliates

Chart 3.13: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.14: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

vi) French-Language – Canadian Pay & Specialty Services

Chart 3.15: Broadcast Day – 6 a.m. to 2 a.m. Persons 2+

Chart 3.16: Peak Viewing Period – 7 p.m. to 11 p.m. Persons 2+

B. Canadian Priority Programming

• In Building on Success – A Policy Framework for Canadian Television, Public Notice CRTC 1999-97, 11 June 1999 (the Television Policy), the Commission indicated that one of its goals in developing the policy is to "ensure quality Canadian programs at times when Canadians are watching".
• The Television Policy states that the Commission wishes to ensure the availability of a range of diverse programming in a sufficient number of hours to attract audiences to Canadian programming during peak viewing periods (7 p.m. to 11 p.m.).
• "Under-represented Canadian programming" (drama, music and dance, and variety programs) was redefined as "priority programming" and expanded to include long-form documentaries, regionally produced programs and entertainment magazines programs.
• The Television Policy also required that the large multi-station ownership groups offer as a minimum, in each broadcast year, an average of 8 hours per week of priority Canadian programming during the 7 p.m. to 11 p.m. peak viewing period. This requirement is in addition to any benefit commitments made by these broadcasters in connection with transfers of ownership or control. Currently, CTV, Global and TVA meet the Commission's definition of large multi-station ownership groups. Other conventional ownership groups, such as CHUM and Craig, have committed to the 8 hours per week requirement as a result of transfers or new licensing applications.
• The 150% dramatic time-credit that previously could be applied against regulated Canadian content requirements was also discontinued for the large multi-station ownership groups. In its place, the Commission introduced a 150% time-credit for Canadian dramas that receive the full 10 Canadian key creative points and 125% for Canadian drama programs that receive between 6 and 9 points. The broadcasters can apply these time-credits against their minimum 8-hour per week priority programming requirement.
• The majority of the television stations controlled by CTV and Global were renewed in 2001⁵. TVA's network television licence and its mother station CFTM-TV Montréal were also renewed⁶. In its renewal decisions, the Commission indicated that it would be monitoring and evaluating Canadian priority programming scheduling practices and related audience levels, in order to test whether the goals of the Television Policy were being achieved.

• The 2001 renewal decisions for TVA and CTV also outlined significant transfer benefits related to priority programming that the groups were required to fulfill during their next licence term:

• In its Transfer of effective control of CTV Inc. to BCE Inc., Decision CRTC 2000-747, 7 December 2000, the Commission required the licensee to broadcast a minimum of 175 hours of original Canadian priority programming over the licence term (in addition to the base level of eight hours per week), and a minimum total incremental expenditure of $140 million over the licence term on the benefits-related priority programming.
• In its Transfer of effective control of TVA to Québecor Média inc., Decision CRTC 2001-384, 5 July 2001, the Commission required the licensee to expend a minimum of $39.8 million of the benefits on priority programming, incremental to a base level of priority programming expenditures as outlined in the decision.

• The priority programming benefits for both TVA and CTV commenced in the 2001/2002 broadcast year.

1. Scheduling of Priority Programs

• The following chart sets out the total number of Canadian priority programming hours scheduled during the 1998/99 to 2001/02 broadcast years for the following stations:
  - CFTO-TV, Toronto (CTV)
  - CIII-TV, Toronto (Global)
  - CFTM-TV, Montréal (TVA)
• Results for the 2000-01 and 2001-02 broadcast years are based on the revised definitions of priority programming that came into effect on September 1, 2000. The number of hours that qualify for the old and new 150% and the new 125% drama / comedy time-credits are also highlighted in this graph.

Chart 3.17: Number of Hours of Drama/Comedy and
Other Canadian Priority Programming Scheduled
Annually _ 7 p.m. to 11 p.m.

Note: Results for the 2000-01 and 2001-02 broadcast years are based on the revised definitions of priority programming that came into effect on September 1, 2000.
Source: CRTC Logs (Aug. 2003)

• The following chart sets out the total number of Canadian priority programming hours, other than drama/comedy, scheduled in 1998/99 to 2001/02 broadcast years for CFTO-TV, Toronto (CTV), CIII-TV, Toronto (Global) CFTM-TV, Montreal (TVA).

Chart 3.18: Number of Hours Non-Drama/Comedy Canadian Priority Programming Scheduled Annually – 7 p.m. to 11 p.m.

Note: Results for the 2000-01 and 2001-02 broadcast years are based on the revised definitions of priority programming that came into effect on September 1, 2000.
Source: CRTC Logs (Aug. 2003)

• The following chart compares the percentage of hours broadcast for each Canadian priority programming category during the peak viewing period of 7 p.m. to 11 p.m. from 1998/99 to 2001/02 for CFTO-TV, Toronto (CTV), CIII-TV, Toronto (Global) and CFTM-TV, Montréal (TVA).

Chart 3.19: Percentage of Hours Scheduled for Each Canadian Priority Programming Category from 1998/99 to 2001/02

Note: Results for the 2000-01 and 2001-02 broadcast years are based on the revised definitions of priority programming that came into effect on September 1, 2000.
Source: CRTC Logs (Aug. 2003)

2. Drama

• In Support for Canadian television drama – Call for comments, Broadcasting Public Notice CRTC 2003-54, 26 September 2003, the Commission is soliciting comments from producers, broadcasters and the public on actions it might take to support the production and broadcast of more high quality, original, English-language Canadian drama and to attract larger audiences to such programming. The Commission is also seeking comments on actions it might take to ensure that high quality, original French-language Canadian drama remains a key component of prime time viewing.
• Charts 3.20 to 3.23 compare the viewing and scheduling of both English and French-language Canadian drama/comedy across the Canadian broadcasting system between Fall 1993 and Fall 2002.

Chart 3.20: Viewing to English-Language Canadian Drama/Comedy Programming - BBM Fall 1993 & Fall 2002
Average Hours Viewed per Week (000,000)
7 p.m. to 11p.m.

Chart 3.21: Scheduling of English-Language Canadian Drama/Comedy Programming - BBM Fall 1993 & Fall 2002
Average Hours Scheduled per Week
7 p.m. to 11p.m.

Chart 3.22: Viewing to French-Language Canadian Drama/Comedy
Programming - BBM Fall 1993 & Fall 2002
Average Hours Viewed per Week (000,000)
7 p.m. to 11p.m.

Chart 3.23: Scheduling of French-Language Canadian Drama/Comedy
Programming - BBM Fall 1993 & Fall 2002
Average Hours Scheduled per Week
7 p.m. to 11p.m.

C. Financial Performance

1. Revenues

Chart 3.24: English-Language Private Conventional Television and
Pay, PPV & Specialty Services

Notes: Includes ethnic & bilingual services; 1999 to 2001 Private conventional revenues have been restated.
Source: CRTC Financial Database

• he 8% revenue increase in 1998 for private conventional television was caused by the entrance of 5 new stations (CKMI-TV, Québec; CJNT-TV, Montréal; CKAL-TV, Calgary; CKEM-TV, Edmonton; CIVT-TV, Vancouver). Since then, revenue growth for the conventional players has been flat.
• Pay, PPV and specialty revenues have been increasing steadily. The number of English services has more than doubled since 1996 increasing from 20 to 45 in 2001. In 2002, an additional 47 English and 3^rd language digital services reported 1^st year results.
• Specialty television services have a dual revenue stream from both advertising and subscription. Pay and PPV services, on the other hand, rely entirely on subscription revenues.

Chart 3.25: Revenues of English-Language Private Conventional Television Services by Group

Source: CRTC Financial Database

• Based on conventional stations owned or controlled by the ownership group on August 31st of each year.
• In its decision Acquisition by CanWest Global Communications Corp., through its wholly-owned subsidiary CW Shareholdings Inc., of the ownership interests held previously by WIC Western International Communications Ltd. in various conventional television stations and in certain other broadcasting undertakings, Decision CRTC 2000-221, 6 July 2000, the Commission approved the acquisition by CanWest Global of certain television stations previously held directly or indirectly by WIC. In doing so, the Commission required CanWest Global to divest its interests in CFCF-TV and CKVU-TV. The divestitures took place in the fall of 2001. The stations were held in trust during this period. Consequently, the revenues for 2000 and 2001 shown for Global here exclude CFCF-TV and CKVU-TV.
• CTV revenues for 1999, 2000 and 2001 include the CTV network plus CTV stations, less the network payments to CTV affiliates. BCE acquired controlling interest in CTV on December 7, 2000

Chart 3.26: Private French-Language Conventional Television,
Pay, PPV and Specialty Services Revenues

Excludes bilingual services
Source: CRTC Financial Database

• Revenue growth for French-language private conventional stations has averaged 4% per year since 1996. The number of stations has also remained unchanged.
• French-language pay, PPV and specialty services have achieved strong revenue growth. Since 1996, the number of services has increased by 89% from 9 to 17 services in 2002.
• French-language specialty services rely heavily on subscription revenues. In 2002, only 23% of their revenues were derived from advertising.

Chart 3.27: Revenues of French-Language Private Conventional
Television Services by Group

Source: CRTC Financial Database

Notes:
• Based on conventional stations owned or controlled by the ownership group on August 31st of each year.

Vidéotron:
• Held majority voting interest in Groupe TVA inc. In 2002, Quebecor acquired effective control of Vidéotron.

Quebecor:
• Held majority voting interest in TQS Inc. (CFJP-TV & CFAP-TV) from 1999 to 2001.
• In its decision Transfer of effective control of TVA to Quebecor Media inc. Decision 2001-384, dated July 5, 2001, Quebecor acquired control of Groupe TVA inc. Approval was subject to the condition precedent that Quebecor divest itself of TQS inc. On December 7th, 2001 (2001-746) the Commission approved the purchase of TQS inc by Cogeco Inc. (60%) and Bell Globemedia Inc. (40%).

Cogeco:
• In its decision Acquisition of the assets of CFRS-TV and of CKRS-TV and its transmitter CKRS-TV-1, Decision 98-503, November 24, 1998, Cogeco acquired two television stations and a transmitter.
• In December 2001 it acquired majority controlling interest of the TQS Inc. television stations.

2. CBC Conventional Television Advertising Revenues

Chart 3.28: Advertising Revenues – CBC Conventional Television

Source: Financial Annual Return filed with the CRTC

3. Aggregate Profits Before Interest and Taxes (PBIT) Margins (%)

Chart 3.29: Aggregate PBIT Margins of English-Language Private
Conventional Television & Pay, PPV and Analog Specialty Services

Notes: Includes ethnic & bilingual services; 1999 to 2001 Private conventional results have been restated.
Source: CRTC Financial Database

• The drop in profitability in 1998 for conventional television stations was caused by five new services reporting first year losses. A large one-time write-off by one of the large broadcasters also contributed to the downturn in 1998.
• The number of Pay, PPV and Specialty services has been climbing steadily over the past several years. The introduction of 12 new services in 1998 caused the aggregate PBIT margin decrease in 1998 and 1999.
• The 2002 Pay, PPV & Specialty results reflect $284 million in profits from the analog services with a PBIT of 21%. The digital services reported losses of $140 million in 2002 which resulted in a combined PBIT margin of 10% for English and third-language analog and digital Pay, PPV and Specialty services.

Chart 3.30: Aggregate PBIT Margins of Private French-Language
Conventional Television & Pay, PPV and Specialty Services

Source: CRTC Financial Database

• In 2002, the number of French-language specialty services increased from 16 to 17 with the addition of ARTV.

D. Eligible Expenditures on Canadian Programming (CPE)⁷

1. English-Language

Table 3.5: Private Commercial Conventional Television

Includes ethnic stations
Source: CRTC Financial Database

Table 3.6: CBC Television

Source: CBC Annual Reports to the CRTC

Table 3.7: Pay, PPV and Specialty Services