Sports content powering TV revenue
Despite all the concern about so-called “cord-cutters”, “cordnevers” and competitive streaming platforms, the total sales generated by television services in Canada actually grew in 2014 compared to the prior year.
According to data r eleased Thursday by the country’s broadcasting regulator, revenues for specialty, pay, pay-per-view and video-ondemand offerings rose 3.1 per cent to $4.2 billion in the year ending August 31, propelled by a 13.6- per cent gain recorded by domestic sports channels under banners such as BCE Inc.’ s The Sports Network (TSN) and Rogers-Communications Inc.’ s Sportsnet.
TSN, for example, posted a 13-per-cent gain in sales during the period to $452.2 million while sister French-language channel, Réseau Des Sports (RD S), saw revenue rise six per cent to $177.6 million.
Rivals BCE and Rogers have been adding sports media rights to their content arsenals and feeding this programming that’s best consumed live to their television, Internet and wireless subscribers. This week, the pair published duelling releases declaring themselves the country’s most-watched sports station.
For the industry as a whole, a 5.9 per cent increase in annual subscription sales in 2014 offset a 4.2 per cent slump in national advertising, as the category continues to fight for both viewership and ad dollars along with the plethora of burgeoning alternative mediums. This contraction snaps what had been a streak of at least three years of rising national television ad revenue.
Jean-Pierre Blais, chairman of the Canadian Radio-television-and-Telecommunications Commission, spoke Thursday to the Western Association of Broadcasters about what he referred to as “the age of abundance”, a paradigm shift that’s offering the ordinary viewer so much more choice and control of the dial. He called consumers “emperors”, and many are choosing to either cut the cord or, in the case of “cord-nevers”, forgo installing it in the first place.
“(Viewers) control everything: what they watch, when they watch, where they watch, how they watch,” said Blais, according to a copy of his prepared remarks.
The parent companies of these legacy stations are spending more to keep up with overthe-top competitors such as Netflix, combating illegal sites and connections such as Virtual Private Networks (VPNs), developing their own web streaming platforms such as Shomi and CraveTV, acquiring and creating more content with the hope that people will watch, and strengthening the technology behind all these services.
Unsurprisingly as a result, expenditures increased to $3.1 billion, squeezing profit margins before interest and taxes to 23.7 per cent from 26.5 per cent. The total amount spent on Canadian programming rose to $1.5 billion in 2014, with a rise in the amount spent on made-in-Canada scripts, filler production and content rights. Expenses related to foreign programming also jumped to $574 million from $528 million.