Television broadcasting
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Operating revenues in the television broadcasting sector reached $7.5 billion in 2011, up 5.4% comparatively from 2010.
Pay and specialty television continued to climb, with operating revenues increasing 7.9% year over year to reach $3.7 billion. Operating revenues for private conventional television reached $2.2 billion in 2011, an increase of 0.3%. Operating revenues of public and non-commercial television increased to $1.6 billion, an increase of 7.1%.
In 2011, the profit margin for private conventional television was 7.2%. This follows smaller margins posted in 2009 and 2010 (-5.7% and +0.2%, respectively). The profit margin before interest and taxes in 2011 was at its highest level since 2005.
The profit margin before interest and taxes for private conventional television has been improving for the past two years in part because of greater expenditure control. In 2011, Private conventional television broadcasters decreased their programming and production expenses by 11.3%. In 2010, the year-over-year increase of these same expenses was only 1.7%. These growth rates were the lowest of the past 10 years, except in 2007 (0.7%).
The combined effect of the expenditure control, the increased advertising revenues, and revenues from the Local Programming Improvement Fund in the past two years helped these television broadcasters regain their profitability.
In 2011, pay and specialty television posted a profit margin before interest and taxes of 24.9%, slightly down from 2010 (25.3%). The profits before interest and taxes for pay and specialty television reached $930.5 million.
In 2011, advertising revenues for conventional television (private, public and non-commercial) showed slower growth (1.7%) than for pay and speciality television (10.9%). Conventional television has been losing ground in the television advertising market for several years. In 2011, conventional television captured 65.5% of the television advertising market, compared to 72.9% five years earlier.
The advertising market shares for public and non-commercial television have remained relatively stable in the past few years, at 10.7% in 2011. Private conventional television saw its advertising market shares fall from 62.2% to 54.8% in five years. In 2011, television advertising revenues as a whole were $3.6 billion.
Subscription revenues and advertising revenues both contributed to the growth of pay and speciality television in 2011. Subscription revenues were up 7.0% and advertising revenues increased 10.9%. Subscription revenues accounted for 64.4% of operating revenues, whereas the proportion of advertising revenues equaled 33.1% for these two industry segments.
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