Television broadcasting, 2014

Released: 2015-08-25

The Canadian television broadcasting sector reported a 0.3% decline in total operating revenues to $7.6 billion in 2014. Profits before interest and taxes fell 22.0% to $836.8 million in 2014 from $1.1 billion in 2013.

The decline in 2014 was attributable to a 3.2% increase in operating expenses to $6.7 billion. The higher expenses were due primarily to programming expenses, which rose 5.3% from $4.6 billion in 2013 to $4.8 billion in 2014.

The private conventional television segment's share of revenues within the television broadcasting sector continued to shrink. At $1.8 billion in 2014, this segment accounted for 24.0% of the sector's revenues compared with 30.4% in 2010. Specialty television's share of the market continued to grow, generating revenues of $3.4 billion, which represented 45.3% of total revenues in 2014. The public and non-commercial television (19.8%) and pay television (10.9%) segments accounted for the rest of the television broadcasting sector's revenues.

Operating revenues for the public and non-commercial television segment grew 2.1% to $1.5 billion in 2014, the result of a $140.6 million increase in advertising sales, which offset a $106 million decline in government grants. However, a 4.2% increase in operating expenses led to losses of $22.5 million and a gross profit margin of -1.5% for the public and non-commercial television segment.

Despite a 4.2% increase in operating revenues, the specialty television segment saw its profits before interest and taxes decrease 7.5% in 2014, resulting in a profit margin of 26.6%. Operating expenses grew 9.1% to $2.5 billion, mainly the result of a $208 million increase in programming expenses.

The pay television segment earned a profit before interest and taxes of $97.0 million, leading to a gross profit margin of 11.8%. Pay television and specialty television were the lone segments to report a profit in 2014.

Advertising revenue continues to decline in the Canadian television broadcasting sector

Advertising sales, the largest revenue contributor, fell 0.8% to $3.4 billion, continuing the decline that started in 2011. From 2011 to 2014, air time sales decreased by $190.9 million. Recent technological changes, including new broadcasting platforms for television programming such as websites or mobile phones, have had a notable impact on the sector's financial results. Private conventional television was hit the hardest by this phenomenon. Its air time sales have decreased by $302.5 million since 2011, with revenues totalling $1.7 billion in 2014.

The decline in advertising sales in 2014 for the television broadcasting sector was offset by an increase in subscription revenues, which rose 5.5% from 2013 to $2.9 billion in 2014. This growth followed increases of 8.4% in 2012 and 5.3% in 2013.

Private conventional television's share of the advertising sales market fell below the 50% mark for the first time, reaching 48.9% in 2014. In contrast, specialty television held 36.7% of the advertising sales market and public and non-commercial television held 14.4%.

Chart 1 
Market share (air time) by type of broadcaster

Private conventional television in Quebec records its first loss since 1991 

Private conventional television in Quebec posted its first loss before interest and taxes since 1991, recording a loss of $12.3 million in 2014 compared with a profit of $24.2 million the previous year. The loss was due to an 8.9% decline in operating revenues to $393.1 million in 2014, while operating expenses fell 0.4% to $405.4 million. This differs from the last time losses were reported between 1987 and 1991, when the sector posted significant increases in programming costs rather than declines in operating revenues. During that period, programming costs rose 58.1% from $132.8 million in 1987 to $209.9 million in 1991.

Losses in other Canadian regions

The private conventional television segment in three other Canadian regions—the Atlantic provinces, Ontario and the western provinces—also recorded losses before interest and taxes in 2014. The Atlantic provinces reported losses of $15.5 million in 2014, following losses of $12.7 million in 2013. The losses in 2014 were due to a 3.4% decrease in operating revenues combined with a 0.5% increase in operating expenses.

In Ontario, operating revenues fell 5.9% from $828.3 million in 2013 to $779.4 million in 2014. Operating expenses rose 0.9% to $846.6 million, resulting in losses of $67.2 million. Ontario's private conventional television stations had not recorded such losses since the 2008-2009 recession.

Private conventional television stations in western Canada reported a loss in profits before interest and taxes of $53.5 million in 2014, mainly as a result of a decline in advertising sale revenues, which fell 8.4% to $528.5 million. The 1.8% decrease in operating expenses to $629.6 million was not enough to offset the decline in revenue.

Total operating revenues for private conventional television in Canada fell 7.2% in 2014 to $1.8 billion. Operating expenses edged down 0.3% to $2.0 billion, leading to losses of $148.5 million and a gross profit margin of -8.2%.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).

To enquire about the concepts, methods or data quality of this release, contact Dany Gravel (613-864-1350; dany.gravel@statcan.gc.ca), Investment, Science and Technology Division.