Private radio broadcasting
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A year of stabilization for the radio industry
The operating revenues of the private radio broadcasting sector totalled $1.6 billion in 2012, up a modest 0.3% from 2011. The majority of these revenues (98%) were from advertising.
The annual growth rate for 2012 was the lowest since 2000, except for 2009, when revenues were down 5.3% compared with 2008 because of the economic slowdown. After the 2010 recovery, the growth rate of radio broadcasting revenues stabilized.
The profit margin before interest and taxes was 19.7% in 2012, up from 19.4% in 2011, with profits totalling $320 million. The industry has still not returned to the level of profitability it had before the 2008 economic slowdown.
FM and AM radio
For the FM radio sector, operating revenues edged 0.7% higher to $1.3 billion in 2012, up $9 million. Although expenses rose just 0.2% in 2012, FM radio’s profit margin before interest and taxes has still not returned to its pre-recession levels. The profit margin for 2012 was 21.8%, up slightly compared with 2011 (21.4%).
The number of FM radio stations continued to increase in 2012, as 11 new stations were added. Since 2000, 294 new FM radio stations have gone on the air in Canada.
The number of AM radio stations continued to decline in 2012, as there were five fewer stations than in 2011. Since 2000, there are 110 fewer stations on the AM band in Canada. Many of them moved to the FM band, and the least profitable ones went out of business.
In 2012, the operating revenues and expenses of AM radio stations were both down 1.6% compared with 2011, falling to $307 million and $274 million respectively. The profit margin before interest and taxes remained above the 10% threshold, at 10.7%.
Ontario stations still the most profitable in Canada
Ontario’s private radio broadcasters remained the most profitable in the country. Despite a small 2.2% decline in operating revenues and an even larger 3.1% decrease in operating expenses, Ontario’s private radio stations posted their best profit margin before interest and taxes in the last 12 years (24.7%).
In Alberta, private radio stations’ profit margin before interest and taxes grew from 19% to 21.2% in 2012. This performance was attributable to a large increase in revenues (+3.4%) and restraint in expenses (+0.5%) in 2012. This growth made Alberta’s radio broadcasters the second most profitable in Canada.
After two consecutive annual increases, the profit margin of Manitoba’s private radio stations before interest and taxes declined to 16.8% in 2012, compared with 20.5% in 2011. This decrease was attributable to a sharp rise in expenses, up 6.6% from 2011. Saskatchewan’s radio broadcasters remained the least profitable in the provinces, reporting a profit margin of 11% before interest and taxes, down from 11.8% in 2011.
The profitability of private radio stations in the Atlantic region has been declining steadily for the last seven years. The profit margin of the region’s private radio stations before interest and taxes fell from 27% in 2005 to 14.6% in 2012.
Ethnic radio stations still growing
In 2012, ethnic radio stations reported the highest rate of operating revenue growth, at 4.7%, compared with 0.3% for English-language stations and -0.4% for French-language stations.
For English-language radio, profits before interest and taxes rose 1.0% to $274 million, compared with 6.8% for French-language stations ($40 million) and 37.9% for ethnic stations ($6 million). Profit margins were 20.9%, 15% and 12.9% respectively in 2012.
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