Communications Monitoring Report 2018

Television revenues, excluding Internet-based video services, totaled $6.9 billion in 2017 (a decline of 5% compared to 2016), representing 40.1% of total broadcasting revenues.
- Private conventional television stations generated $1.6 billion in revenues in 2017, a 4.1% decrease compared to 2016.
- Revenues of CBC conventional television stations totaled $0.9 billion in 2017, a 20.4% decrease compared to 2016.
- Discretionary and on-demand services generated $4.4 billion in revenues, down 1.2% from 2016.
According to Ovum estimates, revenues in Canada of Internet-based video services reached $2.4 billion in 2017, growing on average by 28.9% per year from 2013 to 2017.
In 2017, there were 793 television services authorized for distribution in Canada, of which 447 (56%) were Canadian.
On average, Canadians 18+ watched 27 hours per week of traditional television in 2017.
Television services reported $2.9 billion in Canadian programming expenditures in 2017.
- News expenditures represented 24% of that amount. Spending on news declined on average by 2.9% per year from 2013 to 2017.
- Expenditures on programs of national interest totaled $671 million, a 4% increase from 2016.
There were 76 ownership groups operating television services in 2017. The top five groups reported 89% of revenues.
From 2013 to 2017, discretionary services experienced growth both in subscriber and advertisement revenues, reporting an average annual growth of 2.6% and 0.6% respectively.
In 2017, a single transaction of a value of $1.5 million generated $100,000 in tangible benefits.

Source: CRTC data collection, Ovum, CRTC internal database, Numeris, public disclosure of aggregate annual returns for large ownership groups

In 2017, private commercial conventional television stations and Canadian Broadcasting Corporation (CBC) conventional television stations combined with discretionary and on-demand services generated $6.9 billion in revenues and spent approximately $2.9 billion in Canadian programming expenditures (CPE). Discretionary services reported the majority of both the revenues (59%) and CPE (59%). In comparison, according to estimates from Ovum, revenues of Internet-based video services operating in Canada reached $2.4 billion, a 21.3% increase from 2016.

Canadians 18+ tuned in on average to 27 hours of content per week among the approximately 800 television services authorized for distribution in Canada in 2017. In addition to tuning to traditional television, Canadians 18+ watched 3.4 hours of Internet television on average per week, for a total of 30.4 hours of content viewing per week.

Consistent with previous years, the top five ownership groups out of approximately 80 entities in the Canadian television landscape generated 89% of television revenues in 2017. The top five groups also garnered 92% of the audience tuning shares in the English-language market and 82% of audience tuning shares in the French-language market, according to 2017 Numeris data (Canadians, 2+).

i. Sector Overview

Types of services

The traditional television sector is split into four main segments: private conventional stations, CBC conventional stations, discretionary services and on-demand services.

Discretionary services generated the largest portion of the television revenues with $4 billion (59%) reported in 2017, followed by private conventional stations at $1.6 billion (23%), CBC conventional stations at $944 million (14%), and on-demand services at $317 million (5%).

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Source: CRTC data collection

View data

	($ million)	% of total
Private conventional stations	$1,608	23.3%
CBC conventional stations	$944	13.6%
Discretionary services	$4,048	58.5%
On-demand services	$317	4.6%

There was a slow decline in television revenues from 2013 to 2017: on average, total television revenues decreased annually by 1.38%. However, during the same period, discretionary services reported an average annual revenue growth of 2.0%, driven by specialty services, largely due to the more robust subscription revenues (compared to advertising revenues).

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Source: CRTC data collection

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Source: CRTC data collection

While the traditional television sector is seeing its revenues decrease, its revenues still far exceed the estimated revenues of Internet-based video services in Canada which totaled $2.3 billion in 2017, representing approximately a third of the revenues of the traditional television sector.

Audience measurement

Traditional television and Internet-based television

While the majority of Canadians have adopted Internet-based video services, traditional television viewing still far exceeds viewing of Internet-based television. In 2017, Canadians 18+ watched on average a total 30.4 hours of television per week, with traditional television representing 89% of the viewing and Internet-based television only 11%.

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Source: Numeris, MTM (respondents: Canadians 18+)

Note that 2014 data is unavailable for Internet-based television.

Although the viewership for Internet-based video services is growing, the number of hours that Canadians 18+ spend watching traditional television is still almost eight times higher than the number of hours they spend watching Internet-based television.

Traditional television leads in audience share and in audience penetration. In any given month in 2017, 94% of Canadians 18+ watched traditional television while 83% watched video content on the Internet during the same period.

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Source: MTM, Fall 2017 (respondents: Canadians aged 18+)

Past month refers to the 30 days prior to when the respondent is surveyed.

Traditional television

In 2017, Canadians 2+ watched an average of 25.3 hours per week^{Footnote 1} of traditional television, a 1.3 hour decrease compared to 2016 levels. Breaking down the audience data by age group shows that Canadians 65+ watch the most television, averaging 42.2 hours per week while children aged 2 to 11 watched on average 17.8 hours of television per week.

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Source: Numeris

From 2012-13 to 2016-17, average weekly hours of traditional television viewing decreased on average by 2.4% annually. This decrease is more pronounced in the teen and the 18-34 age groups while the 65+ age group slightly increased their television viewing during the same period.

Language markets and program categories

In 2016-2017, 46% of the average weekly viewing hours of English- and third-language content went to Canadian programs in the English-language market, while 60% of the viewing hours of French-language content in the French-language market went to Canadian programs.

Canadian Programs

Viewing habits of Canadians have not changed much in the past year in regards to program categories for traditional television. This is true for both English- and French-language markets. “News” is the leading category in terms of viewing of Canadian programs in the English-language market and the second most watched category of Canadian programs in the French-language markets. In 2016-2017, Canadian programming in the news category garnered on average 26.7M hours of viewing per week in the French-language market and 76.5M hours of viewing per week in the English-language market.

Canadian and non-Canadian programs

Combining Canadian and non-Canadian programs, the “Drama and comedy” category is the most popular in both markets garnering 36% of the viewing in English and 39% in French, when considering average weekly viewing hours for Canadian television services. The second-most watched program category in the English-language market is “Sports,” with 19% of the viewing. In the French-language market, the second most watched category is “General entertainment and human interest/Reality” with 20.2% of the viewing.

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Source: Numeris (Canadians 2+)

View data

	Average weekly viewing hours (million)	Percentage of weekly viewing hours (%)
Canadian	253	46%
Non-Canadian	297	54%

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Source: Numeris (Canadians 2+)

View data

	Average weekly viewing hours (million)	Percentage of weekly viewing hours (%)
Canadian	115	60%
Non-Canadian	77	40%

Figure 9.9 Average weekly viewing hours (million) for Canadian programs broadcast by Canadian television services, by language market, program origin, and program category, 2017

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Source: Numeris (Canadians 2+)

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Source: Numeris (Canadians 2+)

The above data is based on Canadian services with available data that incorporate country of origin and program genre .

Programming Expenditures

Canadian television services spent a total of $4.1 billion on programming expenditures in 2017 (4.7% decrease from 2016), with the vast majority (69%) going towards Canadian programming expenditures (CPE) and the programs of national interest (PNI) subcategory.

For every dollar of revenue broadcasters earned in 2017, $0.33 was spent on Canadian programming (excluding PNI), $0.10 was spend on PNI, and $0.19 on non-Canadian programming. Therefore, excluding VOD and PPV services as well as other public and not-for-profit conventional television stations, broadcasters spent $0.62 on programming expenses for every dollar of revenue earned.

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Source: CRTC data collection

Programming expenditures of video-on-demand (VOD) and pay-per-view (PPV) services, as well as other public and not-for-profit conventional television stations, are excluded in this figure.

For the purposes of this report, PNI expenditures include expenditures in any of the following program categories:

long-form documentary (category 2b);
drama and comedy (category 7);
French-language music, dance, and variety programming (categories 8 and 9); and
English-language award shows (subset of category 11).

Canadian programming expenditures

Television services spent over $2.9 billion on CPE in 2017. Discretionary services led with CPE totaling $1.7 billion or 59% of the total. While CPE decreased by 4.0% from 2016 to 2017, in the past five years, it increased by 8.7%, growing from $2.7 billion in 2013 to $2.9 billion in 2017.

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Source: CRTC data collection

View data

	$ million	% of total
CBC conventional stations	$509	17%
Private commercial conventional stations	$618	21%
Other public and not-for-profit conventional stations	$68	2%
Discretionary services	$1,727	59%
On-demand services	$20	1%

From 2013 to 2017, CPE grew and “Sports” dethroned “News” as the category that represents the biggest share of total CPE (30% of total CPE). Expenditures in the “Sports” category increased by 63.1%, compared to 2013. Conversely, CPE on "News” saw a decline of 11.1% during the same period. It represented 24% of total CPE in 2017 compared to 29% in 2013.

Significant gains have been made in CPE in the “Drama and comedy” category (8.9% increase) and in the “General entertainment, human interest and reality” category (9.1% increase), while CPE on the “Long-form documentary” category was relatively stable (1.1% decline), during the 2013 to 2017 period.

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Source: CRTC data collection

News

Although expenditures from private commercial stations accounted for 21% of overall CPE, these stations contributed over half of the CPE in the “News” program category. In fact, expenditures on news have gone up for both private conventional stations and discretionary services (3% and 5% respectively) since 2013.

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Source: CRTC data collection

PNI

In 2017, expenditures on programs of national interest totaled $671 million, a 4% increase from 2016. Similarly to 2016, the majority of the PNI went to the “Drama and comedy” category, followed by “Long form documentary”.

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Source: CRTC data collection

Programming expenditures of VOD and PPV services, as well as those of other public and not-for-profit conventional television stations, are excluded from these figures.

Sector composition

The television sector was composed of 76 ownership groups in 2017. The two largest broadcasters, BCE and Corus, garnered over half (52%) of the total television revenues and as well as over 70% of the tuning in the English-language market, while the five largest broadcasters generated over 89% of total revenues, reported 91% of the CPE and garnered over 92% of the tuning in the English-language market.

Infographic 9.2

2017	BCE	Corus/Shaw	CBC	Rogers	Quebecor	Groupe V Media
Television revenues	$2,321 M	$1,251 M	$1,107 M	$1,030 M	$453 M	$72 M
Share of total television revenues	34%	18%	16%	15%	7%	1%
CPE	$821 M	$385 M	$620 M	$526 M	$264 M	$36 M
Tuning share in the French-language market	17.3%	8.9%	18.3%	-	37.6%	8.4%
Tuning share in the English-language market	36.9%	35.4%	7.6%	12.3%	-	-

BCE leads in terms of revenues but it also spends the most in CPE with $821 million, followed by CBC ($620 million) and Rogers ($526 million).

Tangible benefits

Tangible benefits are another means by which the CRTC ensures that a diversity of voices and interests are represented in the Canadian broadcasting system. These benefits represent a proportion of the value of a transaction to transfer the ownership or change the effective control of a television service, usually paid over the course of a licence term. In 2017, a single ownership transaction of a value of $1.5 million generated $100,000 dollars for the English-language market.

Table 9.1 Value of television ownership transactions and corresponding tangible benefits from 1 January 2013 to 31 December 2017
Language	Metric	2013	2014	2016	2017	Total
English-language services	Transactions	4	2	2	1	9
	Value ($M)	944.4	174.3	5.7	1.5	1,125.9
	Benefits ($M)	94.4	17.4	1	0.1	113
French-language services	Transactions	3	1	0	0	4
	Value ($M)	1,512.8	22.9	0	0	1,535.7
	Benefits ($M)	151.3	2.3	0	0	153.6

Source: CRTC internal database

Figures for 2013 include the BCE/Astral ownership transaction (see Broadcasting Decisions 2013-310 and 2014-62), which resulted in $188 million in tangible benefits. Approximately $130 million of that amount was allocated to French-language initiatives and $58.3 million to English-language initiatives.

In Broadcasting Decision 2013-310, the Commission directed BCE to divest itself of 11 specialty television services. Divestiture of these services generated $60.1 million in additional tangible benefits from other purchasers. Approximately $36.2 million of this amount was allocated to English-language initiatives and $23.9 million to French-language initiatives. The Commission further stipulated that BCE supplement any shortfall between the total amount of tangible benefits generated on the latter sale of Astral’s 11 specialty television services and the $72.7 million of tangible benefits attributed to them under the BCE/Astral transaction. The 2013 figures have been restated, increasing tangible benefits resulting from the BCE/Astral ownership transaction from $175.4 million to $188 million.

In Broadcasting Decisions 2013-737 and 2013-738, the Commission approved the divestiture of six of these services (Historia, Séries+, TÉLÉTOON Rétro, TELETOON/TÉLÉTOON, TELETOON Retro, and Cartoon Network) to Corus. Corus committed $40.5 million in tangible benefits: approximately $21.6 million to French-language initiatives and $18.9 million to English-language initiatives.

In Broadcasting Decision 2014-388, the Commission approved the divestiture of three of the remaining five services (Disney Junior, Disney XD and Family Channel) to DHX Media. DHX Media committed approximately $17.3 million in tangible benefits to English-language initiatives.

In Broadcasting Decision 2014-465, the Commission approved the divestiture of the remaining two services (MusiquePlus and MusiMax) to Groupe V Média. Groupe V Média committed approximately $2.3 million in tangible benefits to French-language initiatives.

ii. Conventional television stations

Infographic 9.3

2017	Private conventional television stations	CBC conventional television stations
Number of reporting stations	93	27
Revenues	$1.6B	$944M
2016-2017 revenue growth	-4.1%	-20.4%
CPE	$618M	$509M
Profit before interest and tax (PBIT)/Earnings before interest, tax, depreciation and amortisation (EBITDA)	-6.3% PBIT	7.1% EBITDA
Average weekly viewing hours in Canada (excluding the Quebec French-language market)	176.3M	28.3M
Average weekly viewing hours in the Quebec French-language market	66.0M	27.1M

In 2017, the combined revenues of private and CBC conventional television stations totaled $2.6 billion. These segments continue on a slow revenue decline averaging a 5.4% decrease per year from 2013, when they totaled $3.2B, to 2017.

Average viewing hours for private conventional television stations totaled 304.5 million hours per week for the 2017 broadcast year, a 6.8% decrease over the 2016 level of 327 million hours per week.

In 2017, when Canadians were asked by Media Technology Monitoring (MTM) what type of television service they watched, 7% of Canadians replied watching conventional stations over the air, consistent with 2016 which was 1% higher than in 2015.

Local and national advertising represent the vast majority of revenues for private conventional television stations. The majority of the decrease in these stations’ revenues was observed in the advertising revenues. For CBC television stations, the observed decline in revenues from 2016 to 2017, was mainly a result of a change in CBC’s reporting methodology to exclude digital media activities from its reporting. Part of the decrease was also attributable to a decrease in conventional television advertising revenues.

As previously stated, advertising constitutes the vast majority (86%) of the revenues of private conventional television stations, and represents 19% of revenues of CBC conventional stations. Parliamentary appropriations represented 71% of the revenues of CBC conventional television stations.

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Source: CRTC data collection

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Source: CRTC data collection

“Network payments” includes net payments made to the affiliates as a reduction of the revenue. For the affiliates it should include their share of the network net payments, or the reverse as the case may be;

“Infomercials” is programming exceeding 12 minutes in length that combines entertainment or information with the sale or promotion of goods or services into a virtually indistinguishable whole;

“Syndicated production” is the revenue perceived by the sale or airing permission of a program produced by a network to another network;

“SMLPF” is the Small Market Local Programming Fund;

“Local time sales” are revenues from the sale of air time by local sales representative, net of advertising agency commissions and trade discounts;

“National time sales” are revenues for national advertising, net of any advertising agency commissions and trade discounts;

“Other” includes broadcast-related revenue received from the use of talent services and technical facilities;

“Parliamentary appropriations” is government funding for operating and working capital expenditures.

Private conventional television market composition

In 2017, the two largest broadcasters, BCE and Corus, garnered 64% of the total conventional television revenues and reported 63% of the CPE for conventional television stations with 46 of the 93 stations.

In comparison, the two largest French-language broadcasters combined reported 17% of the conventional television revenues with 11 television stations and accounted for 22% of the CPE for conventional television stations.

The five largest conventional television broadcasters combined represented 69 stations and reported 94% of the revenues in 2017.

Infographic 9.4 – Private conventional television stations of large ownership groups

2017	BCE	Corus	Rogers	Quebecor	Remstar
Number of stations	30	16	27	11	5
Conventional television revenues	$675M	$353M	$206M	$219M	$47M
Share of private conventional television revenues	42%	22%	13%	14%	3%
CPE	$229M	$160M	$56M	$110M	$28M
Tuning share in the French-language market	0.8%	-	-	24.4%	6.7%
Tuning share in the English-language market	14.8%	9.3%	4.1%	-	-

iii. Discretionary & on-demand services

Infographic 9.5

Discretionary services
2017	Specialty services	Pay services	Total
Number of reporting services	265	6	271
Revenues	$3.7B	$0.3B	$4.0B
2016-2017 revenue growth	0.2%	-14.7%	-1.3%
CPE	$1.6B	$0.1B	$1.7B
PBIT	25.6%	19.9%	25.1%
Average weekly viewing hours in Canada (excluding the Quebec French-language market)	N/A	N/A	336.7M
Average weekly viewing hours in the Quebec French-language market	N/A	N/A	105.3M

On-demand services
2017	Pay-per-view services	Video-on-demand services	Total
Number of reporting services	7	14	21
Revenues	$99.4M	$217.6M	$317.0M
2016-2017 revenue growth	13.2%	-5.6%	-0.4%
CPE	$6.6M	$13.7M	$20.2M
PBIT	19.6%	6.9%	10.9%

Discretionary and on-demand services include specialty and pay (discretionary services) and pay-per-view (PPV) & video-on-demand (VOD) (on-demand services). In 2017, for the first time in the past five years, discretionary and on-demand services exhibited a negative growth compared to the previous year (-1.2%). Nevertheless, these services remain very profitable undertakings with a combined revenue of $4.4 billion and a profitability margin of 24.1% for 2017.

Discretionary and on-demand services are spearheaded by specialty services which represent close to 85% of the total revenue for the category. Their growth has been of 3% per year for the past five years with a profitability margin over the 25% mark for the past 5 years. There could be some signs of market saturation as growth for last year was of 0.21%. Examples of specialty services include Food Network, Sportsnet 360 and Canal D.

Revenues of pay services continue in the same declining trend of the past years with an income of $345 million. A negative growth of -14.7% compared to the previous year can be in part attributed to the closure of two services. This brings the total of reporting pay services to six. Examples of pay services include The Movie Network and Super Écran.

With revenues of $318 million in 2017, video-on-demand services are also in a declining trend. Revenues are decreasing at an average rate of 3.5% per year for the past five years. VOD services are numbered at 14, among these are Bell TV On Demand or Illico sur demande.

PPV services accounted for the smallest revenues in this category ($99 million, 2017) but the biggest growth in the past year (13.2%, compared to previous year). Many of the seven services saw growth in subscriber revenues. Notwithstanding last year’s financial performances (PBIT 19.6%), this is a market segment that is trending towards a slow decline in revenues (-0.1% per year for the past five years). Examples of services include Shaw Pay-Per-View and Canal Indigo.

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Source: CRTC data collection

In 2017, subscriber revenues represented 67% of revenues while advertising revenues represented 30%. These proportions were similar in 2013. Subscriber revenue is comprised of terrestrial subscribers (52% of total revenues in 2017) and Direct-to-home subscribers (16% of total revenues). Advertising revenues are split between national ads (29% of total revenues 2017) and local ads (1% of total revenues).

Both subscriber and advertising revenues have grown in the past five years (1.9% per year for subscribers, 0.6% per year for ads). Subscriber and ad revenue growth is negative when compared to the previous year (-1.2% for subscriber revenue; -1.4% for ad revenue).

Subscriber and advertising revenues are growing at a slow rate.

Between 2013 and 2017, viewership for discretionary services declined by -1.6% per year, albeit with a more significant decline in the last year (-6.4%).

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Source: CRTC data collection

View data

	$ million	% of total
Subscriber revenues	$2,940	67.4%
Advertising revenues	$1,329	30.4%
Other revenues	$96	2.2%

Discretionary and on-demand service market composition

In 2017, the two largest broadcasters, BCE and Corus, garnered 59% of the total discretionary service revenues and reported 47% of the CPE of these services, as well as garnering 48% of the tuning in the English-language market.

While Rogers comes into third place in terms of discretionary service revenues with $771 million in 2017, it reported $460 million in CPE, placing it in second place, behind BCE which reported $590 million in CPE and $1,556 million in revenues.

Infographic 9.6 – Discretionary services of large ownership groups and the CBC

2017	BCE	Corus	Rogers	CBC	Quebecor	Remstar
Number of discretionary services	32	44	10	5	7	2
Revenues	$1,556M	$832M	$771M	$164M	$184M	$24M
Share of the revenues of discretionary services	38%	21%	19%	4%	5%	0.4%
CPE	$590M	$226M	$460	$112M	$151M	$8M
Tuning share in the French-language market	16.5%	8.9%	-	4.9%	13.2%	1.7%
Tuning share in the English-language market	22.1%	26.1%	8.2%	2.0%	-	-

In 2017, the four largest broadcasters garnered 82% of the total revenues for on-demand services and reported $14.2 million in CPE with 13 of the total 21 services.

Infographic 9.7 – On-demand services of large ownership groups

2017	BCE	Quebecor	Rogers	Shaw
Number of on-demand services	6	2	2	3
Revenues	$89.1M	$49.2M	$53.3M	$65.8M
Share of the revenues of on-demand services	28%	16%	17%	21%
CPE	$1.9M	$2.8M	$9.5M	-

iv. Internet-based video services in Canada

Internet-based video services are a growing segment. This market segment generated revenues totaling an estimated $2.4 billion in Canada in 2017. Considering that the traditional television sector generated $6.9 billion in revenues in 2017, Internet-based video services would represent approximately 35% of this total, comparable to the revenues of private and CBC conventional television stations combined.

Internet-based video services are segmented into three main distinct business models:

Subscription-based video-on-demand (SVOD) service refers to an Internet-based service model in which a client pays a subscription fee to gain access to a library of content. This category includes both the services where the content of the library is aired according to a linear schedule (for example, Rogers NHL Live) and those where a user chooses amid a catalogue of content which is available regardless of viewing time (for example, Club illico, Crave, and Netflix).

Transactional video-on-demand (TVOD) service refers to an Internet-based service model in which a client pays only for the specific content watched. The client usually does not pay to access the service itself. Examples of this type of service are iTunes, Microsoft Movies & TV, and the PlayStation Network.

Advertising video-on-demand (AVOD) service refers to an Internet-based service model in which a client typically has free access to content but is exposed to advertisements. YouTube is an example of this type of service.

Infographic 9.8

	SVOD	TVOD	AVOD	Total
2017 Estimated revenues in Canada	$1,331M	$451M	$583M	$2.4B
2016-2017 growth	26.3%	8.7%	21.2%	21.3%
Share (%) of estimated revenues of Internet-based video services	56%	19%	25%	N/A

All data pertaining to Internet-based video services were acquired from a third party and should be regarded as estimates.

While the traditional television sector saw its revenues decline on average by 1.3% per year from 2013 to 2017, estimated revenues of Internet-based video services in Canada grew at an annual average rate of 28.9% during the same period.

SVOD services led Internet-based video services in terms of total revenues and growth. In 2017, SVOD services garnered 56% of total estimated Internet-based revenues, totaling $1.3B and grew on average by 38.8% per year from 2013 to 2017. AVOD and TVOD services came in second and third place, respectively, in terms of total estimated revenues and growth.

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