Revenues for Pay and Specialty Television Continue to Climb

While conventional television revenues declined for the first time in a decade in 2007, revenues for pay and specialty television continued to climb. Public and non-commercial conventional television was hardest hit by the slowdown, which affected both its advertising revenue and grants, according to a study by Statistics Canada.

Private conventional television experienced a slight recovery after stagnating in 2006. This segment faced a particular challenge in 2007 as a result of a weak advertising market. Advertising sales generally account for about 94% of this segment's annual revenues. Advertising revenue for the television sector as a whole increased only 1.8% in 2007, the smallest growth in a decade, while the share of private conventional television continued to decline.

The pay television segment experienced the strongest growth in the whole sector, driven largely by the increasing popularity of pay-per-view television and video-on-demand. Revenues from those services increased a substantial 25.8% in 2007 to $197.8 million, accounting for almost two-thirds of the growth in the pay television segment.

The specialty television segment also had a strong year, with revenues up 8.0%. Its two main sources of income (subscriptions and advertising revenues) increased, although less so than in 2006.

The weak performance of conventional television compared with pay and specialty television is part of a strong long-term trend. Conventional television accounted for 55.9% of all television broadcasting revenues in 2007, considerably less than the 79.4% a decade earlier.

As for profitability, the profit margin before interest and taxes for all private television broadcasters rose slightly between 2006 and 2007. Pay and specialty television channels accounted for almost 85% of private television profits in 2007.

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