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CRTC

Broadcasting Policy Monitoring Report

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Introduction

The CRTC Action Plan 2000-2003 included the establishment of a broadcasting monitoring framework based on performance indicators to measure the results and effectiveness of CRTC policies and identify policy areas that may require further review or adjustment.

This first edition outlines the initial performance indicators that the CRTC will use in its on-going assessment of the impact of CRTC broadcasting policies and decisions.

In the past few years, most of the major broadcasting policies have been revised. These policies were used as the starting point to develop the performance indicators:

• New Regulatory Framework for Broadcasting Distribution Undertakings – Public Notice CRTC 1997-25
• Commercial Radio Policy – Public Notice CRTC 1998-41
• New Media – Broadcasting Public Notice CRTC 1999-84 and Telecom Public Notice CRTC 99-14
• A Policy Framework for Canadian Television – Public Notice CRTC 1999-97
• Ethnic Broadcasting Policy – Public Notice CRTC 1999-117
• Licensing Framework Policy for New Digital Pay and Specialty Services – Public Notice CRTC 2000-6
• Campus Radio Policy – Public Notice CRTC 2000-12
• Community Radio Policy – Public Notice CRTC 2000-13

The CRTC will report on the performance indicators annually and will amend its broadcasting monitoring framework to reflect changes to the broadcasting environment and CRTC policies. The framework is sub-divided in four sections:

• Radio
• Television
• Broadcasting distribution
• New media.

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Table of contents

Page

Radio

I. Radio tuning and relationship with other media
    A. Tuning trends
    B. Advertising
    C. Digital radio
II. Ownership
    A. The top ten ownership groups
    B. Top ten by total hours tuned
    C. Transfers of control and competitive licensing
III. Diversity of formats
IV. Popularity of formats
V. Promotion of a financially sound sector
    A. Financial performance
        1. Total revenues – AM and FM
        2. Profit before interest and tax (PBIT) margins
        3. Jointly operated AM stations
VI. Promoting the airplay of Canadian and French vocal music
VII. Campus radio
VIII. Community radio
IX. Ethnic radio

Television

I. Advertising revenue by media
II. Audience
    A. Average hours per viewer
    B. Viewing share by station group
    C. Viewing to Canadian programming
        1. Canadian programming – all English services & all French services
        2. Distribution of viewing by program type
        3. Viewing to Canadian programs – Summary
III. Scheduling of Canadian programming in peak viewing hours
    A. English-language services
    B. French-language services
IV. Financial performance
    A. Total revenues
        1. English-language services
        2. French-language services
    B. Aggregate profit before interest and taxes (PBIT) margins (%)
        1. English-language services
        2. French-language services
V. Funding of Canadian productions
    A. English-language Canadian program expenditures
    B. French-language Canadian program expenditures
VI. Canada's top independent production companies
VII. Pay and specialty services owned by the largest conventional TV groups

Broadcasting Distribution

I. Promoting effective competition
    A. Subscriber levels of incumbent and alternative BDU delivery systems
    B. Relative market share of incumbent and alternative BDU delivery systems
    C. Rate deregulation of incumbent BDUs
II. Promoting contributions to Canadian programming and local expression
    A. Contributions to programming funds
    B. Total community channel expenses
    C. Number of systems maintaining a community channel
III. Affordability of basic service rates
IV. Promoting a financially strong sector
    A. Total revenues
    B. Profit before interest and taxes (PBIT) margins
    C. Return on investment (ROI)
V. Concentration / Vertical integration
    A. Top six distributors by total basic subscribers
    B. Pay & specialty services owned by top six
VI. Promoting digital technology

New Media

I. Usage of New Media
    A. Canada and the Internet
    B. Characteristics of New Media services
    C. Internet access
    D. Internet use by television viewers
    E. Uses of New Media
II. The Canadian Internet service provider (ISP) industry
III. Language and the Internet
IV. Canadian presence in New Media
    A. Initiatives for Canadian New Media content
    B. Canadian multimedia industry
V. New Media advertising trends
VI. E-commerce

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Radio

I. Radio tuning and relationship with other media [up to Table of contents]

    A. Tuning trends

• The following charts and tables outline the total hours tuned to radio in an average week for the years 1994-1999. Chart and table 1 provide the total hours tuned over the entire day, while chart and table 2 include the total hours tuned between 6 a.m. and 6 p.m.

Table 1: Radio tuning in an average week
total hours tuned ("THT")
(000s)

Note: Other is principally tuning to U.S. stations.
Source: BBM Fall 1994 to Fall 1999

Table 2: Radio tuning in an average week
6 a.m. to 6 p.m., total hours tuned ("THT")
(000s)

Source: BBM Fall 1994 to Fall 1999, BBM data for 1996 is unavailable for this time period

• Both tables reveal the continued importance of radio to Canadians. Average weekly hours have increased over both the entire day and between 6 a.m. and 6 p.m. from 1994-1999.
  
• Tuning to AM stations, both English and French, declined annually from 1994 to 1999, while tuning to FM stations increased.

• The following charts compare the tuning levels of AM and FM stations in 1999, and clearly demonstrate the predominance of FM radio.

 

 

    B. Advertising [up to Table of contents]

Table 3: Advertising revenue by media
($ million)

Note: Daily newspaper revenues exclude classified ads.
Source: Carat Expert, Panorama Publicitaire 2000

Chart 3: Share of advertising revenue
by media, 1999

Table 4: Share of advertising revenue by media
(%)

Source: Carat Expert, Panorama Publicitaire 2000

• Total commercial radio advertising revenues have increased annually from 1994 to 1999.

• Radio's share of the advertising pie has gradually declined from 1994 to 1999.

    C. Digital radio  [up to Table of contents]

• As of July 2000, 53 licences for transitional digital radio undertakings (DRUs) had been granted. Of these licences, 41 went to existing commercial radio stations and 12 to existing CBC stations.

• In addition, three licence amendments to add digital radio broadcasting transmitters (DRBs) had been granted. These amendments are temporary measures which allow the licensee to simulcast its conventional station digitally while the licensee's application for a DRU is being processed. Of the DRBs, one belonged to a private commercial station and two to the CBC.

 

II. Ownership

    A. The top ten ownership groups  [up to Table of contents]

Table 5: Ten largest radio operators
Radio revenue & national share
by 1999 ranking

Notes: WIC's radio assets were acquired by Corus Entertainment Inc., Decision CRTC 2000-222 (July 6^th, 2000), and Shaw Communications' radio assets were transferred to Corus Entertainment Inc. Radiomutuel was acquired by Astral Communications Inc., Decision CRTC 2000-5 (Jan. 12^th, 2000).
Sources: CRTC Internal Report `Ownership August 1999', August 2000 & CRTC Financial Database

• The majority of corporations in the top ten by revenue experienced a steady increase in radio revenues between 1997 and 1999. The revenue increases can be attributed to both general economic expansion and acquisitions.

• Both the number of stations operated by the top ten and their national share of revenues are on the rise.

    B. Top ten by total hours tuned  [up to Table of contents]

Table 6: Ten largest radio operators tuning
by 1999 ranking

	Listening hours (000s)			All radio share (%)
Corporations:	1997	1998	1999	1997	1998	1999
Rogers Communications Limited	32,639	34,648	46,662	6	6	9
Standard Broadcasting Corp. Ltd.	43,543	47,068	43,275	8	9	8
CHUM Limited	37,116	38,196	40,663	7	7	7
Télémédia Communications Inc.	37,789	40,357	38,401	7	7	7
WIC - Western International Com. Ltd.	37,337	39,249	38,293	7	7	7
Métromédia CMR Broadcasting Inc.	21,239	22,490	24,055	4	4	4
Shaw Communications Inc.	24,401	25,411	22,628	5	5	4
Radiomutuel Inc.	19,382	19,023	20,191	4	3	4
Newcap Broadcasting Limited	-	-	11,477	-	-	2
Maritime Broadcasting System Limited	-	10,241	10,697	-	2	2
Rawlinson Group	15,115	14,073	-	3	3	-
Radiomédia Inc.	9,158	-	-	2	-	-
Total	277,719	290,756	296,342	54	53	54
Total private radio	436,935	466,091	459,198	-	-	-
Total all radio - Canada	516,564	552,798	544,637	100	100	100

Source: CRTC Internal Report 'Ownership August 1999', August 2000

• Changes in the total number of hours tuned by group are related primarily to acquisitions.

• The ten largest radio groups attracted 54% of the audience and 63% of radio industry revenues in 1999. The stations owned by these groups are generally located in larger markets.

    C. Transfers of control and competitive licensing  [up to Table of contents]

• Between the April 1998 issuance of Public Notice CRTC 1998-41 of the new Commercial Radio Policy and September 2000, there have been 43 transfers of control transactions involving 166 radio stations.

• Transfer benefits from the above transactions amounted to $26.3 million.

Chart 4: Value of radio transactions
($ 000s)

Source: CRTC Decisions and Administrative Approvals

Chart 5: Value of transfer benefits
($ 000s)

Source: CRTC Decisions and Administrative Approvals

Chart 6: Breakdown of transfer benefits

Source: CRTC Decisions and Administrative Approvals

• Since the introduction of the new Commercial Radio Policy, the Commission has licensed 18 new FM stations through competitive processes in medium and large markets.

Table 7: Factors contributing to successful applications for commercial
radio following Public Notice CRTC 1998-41

Source: CRTC Decisions

 

III. Diversity of formats  [up to Table of contents]

• The following tables (8-11) compare the diversity of radio formats available in a sample of markets from across Canada, 1997-1999.

Table 8: Formats of market stations for Vancouver, Kelowna, Calgary and Regina

Sources: -BBM
              -CRTC Research

Table 9: Formats of market stations for Sudbury, London, Toronto and Ottawa-Hull

Sources: -BBM
              -CRTC Research

Table 10: Formats of market stations for Montréal, Québec,
Chicoutimi-Jonquière and Halifax

Sources: -BBM
              -CRTC Research

Table 11: Formats of market stations for St. John's

Sources: -BBM
              -CRTC Research

• In most markets, the number of distinct formats available has either risen or stayed constant since the introduction of the new Commercial Radio Policy.

 

IV. Popularity of formats  [up to Table of contents]

Table 12: Total hours tuned (THT) by format for Canada (000s)

Source: BBM

Chart 7: Ten most popular formats in Canada, 1999

Source: BBM

 

V. Promotion of a financially sound sector  [up to Table of contents]

    A. Financial performance

        1. Total revenues - AM and FM

Table 13: Radio revenues

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

Chart 8: Radio revenues

Source: CRTC Financial Database

• Total revenues for English FM radio have experienced a 10.3% average annual growth rate between 1995 and 1999.

• French FM radio has also seen a steady increase in total annual revenues over this period, with an average annual growth rate of 7.2%. There has been an increase in the number of French-language FM stations, which has compensated for the fall in average annual revenues per station for French FM radio since 1997.

        2. Profit before interest and tax (PBIT) margins

Table 14: PBIT margins - AM and FM
(%)

Note: Ethnic language stations are included under English radio.
Source: FBD Financial Summary Reports

• Profit before interest and tax (PBIT) margins for both English- and French-language FM stations have improved steadily from 1996 to 1999.

• Revenue decreases in both English- and French-language AM stations resulted in increased losses in 1999.

Chart 9: Radio PBIT margins

Source: CRTC Financial Database

        3. Jointly operated AM stations

• Many AM stations share joint operations with at least one other FM or AM station in their market. When viewed as a combined entity, these joint operations tend to be much more profitable than AM stations viewed alone.

• 137 or 61% of English commercial AM stations were jointly operated with at least one other AM or FM station in 1999. The aggregate PBIT margin of these joint operations averaged 17% in 1999.

• The remaining 86 English commercial AM stations operating on a stand-alone basis in 1999 had combined revenues of $88 million and an aggregate PBIT margin of 9%.

• 14 of the 27 French commercial AM stations were operated jointly with at least one other AM or FM station in 1999. The aggregate PBIT margin of these joint operations averaged 15% in 1999.

• The remaining 13 stand-alone French commercial AM stations had combined revenues of $6.9 million and an aggregate PBIT margin loss of -18%.

 

VI. Promoting the airplay of Canadian and French vocal music  [up to Table of contents]

Table 15: Satisfaction of Canadian content and French vocal music requirements

Note: Radio stations are routinely analyzed for compliance to their regulated Canadian music and French vocal music requirements. The above results are based on a limited sample of stations.
Source: RAP Unit, evaluation of licence renewal applications during 1999

 

VII. Campus radio  [up to Table of contents]

• There are currently (August, 2000) 37 campus radio stations across Canada: 31 community-based and six instructional. Thirty of these stations submitted financial returns for 1999.

• 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.

• The majority of campus radio revenues come from sources other than advertising. For example, revenues from the educational institute they are associated with, grants, the local community, fund-raising, etc.

Table 16: Revenues for community-based campus radio stations
($ 000s)

Sources: CRTC Financial Database
              CRTC Licence Application System

Table 17: Revenues for instructional campus radio stations
($ 000s)

Sources: CRTC Financial Database
              CRTC Licence Application System

VIII. Community radio  [up to Table of contents]

• There are two kinds of community radio stations, Type A and Type B. A community radio station is a Type A station if, at the time of licensing, no other radio station other than the CBC is operating in the same language in all or part of its market. A Type B station is one where, at the time of licensing, there is at least one station, other than the CBC, operating in the same language in all or in part of the same market.

• There are currently 34 Type A and 27 Type B community radio stations. Not all community radio stations have filed financial returns with the Commission. The partial results are as follows:

Table 18: Revenues for Type A community radio stations
($ 000s)

Source: CRTC Financial Database

Table 19: Revenues for Type B community radio stations
($ 000s)

Source: CRTC Financial Database

• In addition to advertising revenues, community radio stations receive revenues from fund-raising, grants, and other sources.

 

IX. Ethnic radio  [up to Table of contents]

• There are 13 licensed ethnic radio stations in Canada. The following tables outline 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 August 2000.

Table 20: Ethnic language broadcasting, Vancouver

Table 21: Ethnic language broadcasting, Edmonton, CKER-FM

Table 22: Ethnic language broadcasting, Calgary, CHKF-FM

Table 23: Ethnic language broadcasting, Winnipeg, CKJS

Table 24: Ethnic language broadcasting, Toronto

Table 25: Ethnic language broadcasting, Montréal, CFMB

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