Specialty channels continue to show strong growth

By THE CANADIAN PRESS
April 25

GATINEAU, Que. - Specialty television channels including pay TV, pay-per-view and video-on-demand services brought in $2.7 billion in revenue last year, a 9.1 per cent increase over 2006, according to statistics compiled by the CRTC.

Profits for those services also rose substantially to $647.1 million, before deductions for interest and taxes paid. That's up 13 per cent from 2006.

By far the largest amount of revenue generated by the channels came from cable and satellite TV subscribers. Cable subscribers accounted for $1.2 billion while ExpressVu and StarChoice contributed a total of $574.8 million.

Advertising sales was the next-biggest source of revenue for the specialty channels, with $928.8 million from national advertising and $19.8 million from local advertising.

The channels also spent more on programming last year, although the amount spent on Canadian programming was up only modestly compared with the increased spending on foreign programming.

About $917.9 million was spent on Canadian programming, up 3.3 per cent from $888.4 million in 2006.

In contrast, the industry spent far less on foreign programming but the growth was stronger, rising by 10 per cent to $323.2 million from $293.8 million in 2006.

Last month, the CRTC released figures showing that the country's private-sector conventional television services trailed the specialty channels in terms of both revenue and profitability.

The conventional TV stations generated $2.2 billion in total revenue, including $1.5 billion from national advertising and the rest from local advertising.

Overall profit before interest and tax was $112.9 million in 2007, one about one-sixth as much as the specialty channels did over the same period.

The country's largest private-sector television companies, CTVglobemedia and CanWest, have said they want cable and satellite operators to pay for distributing conventional channels much as they do now for specialty channels.

The major cable companies, primarily Shaw Communications Inc. and Rogers Communications Inc., oppose paying for conventional channels. They say higher subscriber fees would drive away customers.