Institutional links

• Quick Links

  • Today's Releases
  • Decisions, Notices and Orders
  • Public Proceedings

• Resources

  • Glossary

Privacy and Security
Transparency

4.0 Broadcasting

4.1 Boadcasting - Financial review

Broadcasting revenues include revenues from radio, television, and BDUs. Radio revenues include AM and FM commercial radio stations. Television revenues include CBC conventional television, private conventional television, and pay, pay-per-view (PPV), video-on-demand (VOD) and specialty services. BDU revenues include cable and Direct-toHome (DTH) / Multipoint Distribution Service (MDS) as well as Internet Protocol television (IPTV) service, but exclude Internet and telephony service revenues.¹⁸⁵ Revenues from the radio, television, and BDU markets are analyzed in greater detail in subsections 4.2, 4.3, and 4.4, respectively.¹⁸⁶

A) The Industry

In June 2008 there was a change in the effective control of TQS inc. (5 TV stations) from Cogeco to Remstar Diffusion¹⁸⁷ and the CBC acquired the assets of several French-language television programming undertakings in Quebec from TQS inc.¹⁸⁸

i) Radio

The radio industry had five large companies that collectively had 70% of the commercial radio revenues in 2008. The remaining 30% of commercial radio revenues was captured by a large number of smaller companies.

ii) Television

By the end of 2008, the television industry had eight large companies that collectively controlled directly or indirectly over 87% of the television revenues which can be seen in Figure 4.1.2.

iii) Broadcast Distribution

The broadcast distribution industry had five large companies that captured approximately 90% of the broadcast distribution revenues.

B) Revenues

Total revenues from broadcasting services were approximately $14.0 billion in 2008, an increase of 7.3%. Radio revenues increased from $1.5 billion in 2007 to $1.6 billion in 2008, showing an increase of $0.1 billion (5.2%), while television revenues increased from $5.3 billion to $5.5 billion, an increase of $0.2 billion (4.5%), and BDU revenues increased from $6.3 billion to $7.0 billion. Revenue growth in broadcasting came predominantly from the pay, PPV, VOD, and speciality services, and BDUs.

Advertising revenues are a major component of the broadcasting industry. Generally, these revenues account for between 50 to 95% of the broadcaster's total revenues. Over the 2004 to 2008 period, commercial radio and conventional television advertising revenues increased 6.5 and 0.9% respectively; whereas, pay, PPV, VOD, and speciality television advertising revenues increased 9%. Internet advertising revenues however increased 56% over the same period. By 2008, Internet advertising revenues are at the same level as those from radio.

Revenues reported by the pay, PPV, VOD, and specialty services continue to increase annually and since 2005 they have been the largest revenue component of total television revenues. The revenues reported by these services increased $208 million (7.6%) from 2007 to 2008. Since 2004, these services have increased by an average of 9.2% per year which represents the largest growth component of the television market. The number of services reporting financial results over this same period has increased from 123 in 2004 to 182 in 2008. This was largely due to the proliferation of digital services.

Revenues reported by the CBC and private conventional television sector increased by $23 million (0.9%) from 2007 to 2008. Since 2004, these revenues have grown by an average of 1.1% per year. During this same period, CBC and the private conventional television sector garnered 54% of total television revenues reported, but in 2008, this percentage decreased to 46%.

The BDUs experienced the most revenue growth in 2008. As seen in Table 4.1.1, cable and DTH/MDS revenues grew by $0.4 billion (9.9%) and $0.2 billion (11.0%) in 2008, respectively.

i) Radio - revenues

Revenues generated by radio operators were derived mainly through advertising. In 2008, advertising revenues increased $80.0 million (5.5%) over the previous year, slightly below the 6.5% annual growth rate over the 2004 to 2008 period.

ii) Television - revenues

Pay, PPV, and VOD services rely entirely on subscription revenues, while specialty services have both advertising and subscription revenue streams. In 2008, 44% of specialty service revenues were derived from advertising and the remaining 56% was generated through subscription fees. Total television advertising revenues experienced a slight increase in growth of 2.8% from 2007 to 2008 while subscription revenues increased 6.9%.

iii) BDU - revenues

BDU revenues from basic and non-basic programming services increased 10.2% from $6.3 billion in 2007 to $7.0 billion in 2008. BDU revenues represent approximately 50% of total broadcasting revenues in 2008.

C) Earnings Before Interest Taxes and Depreciation (EBITDA) and Profit Before Interest and Taxes (PBIT) margins

i) Radio PBIT

• AM radio reported an $11.2 million (68.3%) increase in profit before interest and taxes (PBIT) from 2007 to 2008. The PBIT margin for AM radio in 2008 was 8.4%.
• FM radio reported a $24.9 million (8.8%) increase in PBIT from 2007 to 2008. The PBIT margin for FM radio in 2008 was 24.6%.

ii) Television PBIT

PBIT and PBIT margins for the private conventional television and pay, PPV, VOD, and specialty services, excluding CBC conventional television, gradually increased from $0.6 billion in 2003 to $0.8 billion in 2005. Since 2005, it has declined by $0.1 billion, resulting in a 13.0% decline.

• The PBIT reported by the private conventional television sector went from $113 million in 2007 to $8 million in 2008. In 2008, the number of private conventional television services reporting financial results increased slightly to 99.
• The PBIT reported by the pay, PPV, and VOD television services increased $38.5 million (6%) to $686 million from 2007 to 2008. The number of pay, PPV and VOD services reporting financial results also increased from 178 in 2007 to 182 in 2008.

Overall television PBIT declined by $66.4 million (8.7%) from 2007 to 2008.

iii) BDU EBITDA

The EBITDA margin for cable undertakings from basic and non-basic programming activities increased from 23.3% in 2007 to 28.1% in 2008. Similarly, the EBITDA margin from basic and non-basic programming activities reported by DTH and MDS undertakings continued to increase from 17.1% in 2007 to 19.0% in 2008.

The combined EBITDA margin for cable, and DTH and MDS undertakings from basic and non-basic programming activities increased from 21.4% in 2007 to 25.3% in 2008.¹⁸⁹

Statistical information - Broadcasting revenues

Table 4.1.1 Broadcasting revenues ($ millions)

											Growth	CAGR
	2004		2005		2006		2007		2008		2007-2008	2004-2008
Radio
AM	303		306		322		329		329		-0.1%	2.1%
FM	924		1,031		1,093		1,173		1,251		6.6%	7.9%
Radio Total	1,227		1,337		1,415		1,502		1,580		5.2%	6.5%
Television
CBC conventional television*	375		292		392		356		412		15.7%	2.4%
Private conventional television	2,066		2,147		2,143		2,171		2,138		-1.5%	0.9%
Pay, PPV, VOD, and specialty service	2,065		2,222		2,499		2,725		2,936		7.7%	9.2%
Television Total	4,506		4,661		5,034		5,252		5,487		4.5%	5.0%
BDU
Cable	3,405		3,522		4,008		4,334		4,762		9.9%	n/m
DTH/MDS undertakings	1,329		1,438		1,641		1,834		2,036		11.0%	n/m
Non-reporting BDUs	306		350		142		142		156		9.9%	n/m
BDU Total	5,039		5,310		5,791		6,309		6,953		10.2%	8.4%
Broadcasting Total	10,773		11,308		12,240		13,064		14,020		7.3%	6.8%

n/m = not meaningful
* CBC revenues include advertising and other commercial revenues. Parliamentary appropriations are not included.
CAGR refers to cumulative annual growth rate
Source: CRTC data collection

Figure 4.1.1 2008 Commercial radio revenues, by broadcaster

Source: CRTC data collection

*In December 2007, the Commission approved an application by Astral Media Inc. to acquire Standard Broadcasting Corporation Limited’s radio assets

The percentage of total revenue calculation is based on total revenues reported for each service where the broadcaster had greater than 50% direct and indirect voting interest as of 31 August 2008.

Figure 4.1.2 2008 Commercial television revenues, by broadcaster

Source: CRTC data collection

Notes:

*              In December 2007, the Commission approved an application by Canwest for authority to change effective control of Alliance Atlantis Broadcasting Inc.’s television specialty services.
**            In September 2007, the Commission approved an application by Rogers Broadcasting Inc. to change effective control of the five OTA Citytv stations previously owned and operated by CHUM Limited.
***          Based on advertising, subscriber and other commercial revenues only and does not include parliamentary appropriations.
****        Includes conventional TQS stations. In June 2008 the Commission approved, subject to certain conditions, the acquisition by Remstar Diffusion Inc. of TQS's network and television stations in Montreal, Quebec, Trois-Rivières, Sherbrooke, and Saguenay. The Commission also approved the acquisition by CBC of the assets of the French-language television programming undertakings CKSH-TV Sherbrooke,
CKTM-TV Trois-Rivières and CKTV-TV Saguenay and its transmitter CKTV-TV-1 Saint-Fulgence, Quebec, from TQS inc.Percentage of total revenue calculation is based on total revenues reported for each service where the broadcaster had greater than 50% and/or direct and indirect voting interest as at 31 August 2008.

Figure 4.1.3 2008 BDU revenues, by operator

Source: CRTC data collection

Note: * Includes non-reporting BDU revenues

Figure 4.1.4 Total broadcasting revenues and PBIT/EBITDA margins

Source: CRTC data collection

BDU revenues include non-reporting BDU revenues, but exclude exempt and non-programming services. BDU EBITDA represents only basic and non-basic services.

Figure 4.1.5 Canadian advertising revenues

Canadian Marketing Association - Marketing’s Contribution of the Canadian Economy, 2007, and Interactive Advertising Bureau of Canada and CRTC data collection