Local TV stations bleeding revenue from lost advertising

Times are tough for local television in Canada, with a new report showing private stations saw a significant decrease in advertising revenue in 2014.

The Canadian Radio-television and Telecommunications Commission released financial information for local television on Monday, underlining the financial squeeze stations are facing in an age of increased competition from online video providers like Netflix Inc. Private stations suffered a 7.2 per cent revenue drop in 2014 to $1.8 billion from $1.94 billion the previous year, largely because advertisers spent $117.1 million less on local television.

Greg MacDonald, a telecom analyst with Macquarie Capital Markets Canada Ltd., said it’s unlikely those numbers will improve.

“I think the trend will stay the same or get worse for companies that don’t have something unique that can be sold beyond the existing platform,” he said. “Companies that have broadcast assets that don’t have ownership of their content will be the ones that will be most at risk.”

Surprisingly, in a year when local private stations suffered, the CBC saw a big revenue bump. The CBC and Radio-Canada brought in $474.6 million in advertising revenues in 2014, 43 per cent more than the previous year. The CBC had better enjoy the windfall while it lasts, however. The big bump in advertising dollars can largely be attributed to the fact the network had a full National Hockey League season to broadcast that year in addition to the Sochi Winter Olympics and the Brazil FIFA World Cup, bringing in many more advertising dollars than the CBC was able to attract during the previous year’s lockout.

The CBC has since lost NHL advertising revenues to

which signed a 12-year, $5.2-billion deal for Englishlanguage professional hockey rights, starting with the 2014-15 season.

The CRTC is making sweeping changes to broadcast regulations after a fall hearing into the future of television, dubbed Let’s Talk TV. Many of those changes, such as allowing consumers to pick and pay for the channels they want and ending the practice of protecting genre specialty channels from competition, are expected to further harm the bottom lines of Canada’s major broadcasters.

At the hearing, former Bell Media president Kevin Crull said the company is running out of ways to keep its local news operations afloat.

“I don’t have a Plan B,” he said. “I think we’re out of cost ideas that don’t dramatically damage the delivery of the product.”