Revenues soar 13.9% for specialty services - Stats Canada


The rapid growth of specialty television services and pay-TV is having a profound impact on revenues, profits and employment in the Canadian television industry, according to the latest figures.

In 2001, specialty television reported revenues of $1.2 billion, up 13.9% from 2000. This level represented 26.6% of total television industry revenues of $4.5 billion, compared with only 19.0% in 1998.

Similarly, pay-TV revenues reached $286.0 million in 2001, a 33.8% gain from 2000. This level represented 6.3% of total revenues, double the proportion of 3.3% in 1998. (Statistics in this release are for the fiscal years ending August 31.)

From 1998 to 2001, the share of total revenues represented by private conventional TV and public and non-commercial TV combined has declined from 77.7% to 67.1%.

The profit margin of the pay-TV segment increased from 18.1% in 1998 to 21.7% in 2001, while that of specialty television rose from 14.5% to 17.4%.

Pay-TV's profitability depends on its ability to attract new subscribers rather than advertising revenues. The increased penetration of direct-to-home satellite services and digital cable has had a positive impact on the financial performance of these operators.

Television broadcasters sold airtime worth more than $2.5 billion last year, up 4.3% from 2000, the biggest increase in the last three years. Airtime sales accounted for 56.6% of total industry revenues.

The strongest growth in airtime sales occurred in the specialty segment, where sales jumped 15.1% to $438.0 million. This represented 17% of the industry total, up significantly from 10% in 1998.

Private conventional broadcasters still accounted for the lion's share, with almost $1.8 billion in airtime sales last year, up 1.5% from 2000.

About 58% of conventional stations reported profits in 2001, down from 67% in 2001, while the percentage of specialty services that realized a profit remained essentially unchanged at about 75%.

Average weekly employment in the television industry fell from 20,094 in 2000 to 19,507 in 2001 after two years of marginal gains. This downturn is attributable to the public and non-commercial segment, where the workforce fell more than 11.0%. Employment among private broadcasters rose 3.7%.

Television broadcasters spent 59% of their revenues on programming and production in 2001, compared with 57% in 2000. This upward trend was observed in all segments of the industry, except pay-TV.

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