Source : Globe & Mail
Ask them any other day and Canada's broadcast industry would be quick to tell you that the 30-second spot is alive and kicking, that the digital video recorder threat is overblown and that the television industry is doing just fine, thank you very much.
But this is the week the Canadian Radio-television and Telecommunications Commission is holding hearings into the future of the industry. So the sky is falling and broadcasters say they need a share of cable fees. And while you're at it, CRTC, they would also like the freedom to air a few more ads each hour.
Here's a guide to navigating the murky waters of television advertising revenue.
The perception: Television's share of the advertising pie is shrinking.
The reality: Not by much. According to the Canadian Media Directors Council, television represented 26 per cent of the 2005 ad spend, down from 27 per cent in 1996. Over the same period, newspapers' share fell to 15 per cent from 18 per cent. The big winner is the Internet, which now accounts for 4 per cent of ad spending, up from zero in 1996.
The perception: TV viewership is down, especially among young people.
The reality: The average Canadian watched 25.1 hours of television a week in 2004/2005, up from 23.7 hours in 2001/2002, according to BBM Canada. The biggest increases in viewership came from children and teenagers.
The perception: TV revenue (from all sources) is down.
The reality: Over the past 10 years, TV revenue has grown faster than Canada's gross domestic product, according to a study prepared for the Canadian Association of Broadcasters. In 2004/2005, revenue was $4.7-billion (0.34 per cent of GDP) up from $2.5-billion (0.3 per cent) in 1994/1995.
The perception: TV advertising revenue is down.
The reality: CRTC data show television advertising revenue was $3-billion in 2004/2005, up from $1.9-billion in 1994/1995. Similar data from Nielsen Media Research show revenue of $3.3-billion in 2005, up from $2.4-billion in 1998.
The perception: Broadcasters collect more money from specialty channel subscriber fees than they do from advertising.
The reality: Specialty channels such as TSN and MuchMusic receive revenue from cable and satellite providers for each customer who subscribes to their channels. Those fees totalled $1.4-billion in the 2004/2005 year, according to the CRTC, about half of what broadcasters receive in ad revenue. However, broadcasters are right to say the share is shifting. In 1994/1995, the industry-wide advertising/subscription fee ratio was 81 per cent to 19 per cent. Last year, it was 68.4 per cent to 31.6 per cent.
The perception: The free broadcasters are losing share to specialty channels.
The reality: This one's true. In the fall of 1985, conventional TV had a 79.4-per-cent share of hours spent watching TV, while specialty channels represented just 2 per cent, according to BBM Canada. By the fall of 2004, specialty TV had a 44.4-per-cent share, compared with 42.8 per cent for conventional TV.
The perception: Television ad revenue is projected to fall.
The reality: Canadian TV ad revenue should reach $3.4-billion by 2009, according to Zenith Optimedia estimates. But specialty channels will reap most of the rewards. They're expected to see a 35.8-per-cent increase in ad revenue over four years, compared with 5.5 per cent for conventional television.
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