STATSCAN 2005 REPORT ON RADIO BROADCASTING Broadcaster
2005 Previous release Airtime sales by private radio broadcasters jumped by 8.7% in 2005, to $1.3 billion, the largest annual increase since 1988.
In 2005, the industry also achieved its highest profits in recent history. For each dollar of revenue, private radio stations recorded profits of 20.6 cents, before interest and taxes. Comparatively, profits had been 17.7 cents on average since the start of the current decade, and 6.6 cents during the previous decade.
Large market radio stations remained more profitable than small market radio stations. The profit margin before interest and taxes for all stations in the five main census metropolitan areas (CMA) reached 26.9% in 2005, compared to 15.1% for stations in other metropolitan areas, and 14.6% for stations operating outside metropolitan areas. In the large markets, Calgary (31.2%) and Ottawa–Gatineau (31.1%) were the most profitable, followed closely by Toronto (30.5%).
The rationalization of AM radio that started in the early 1990s continued in 2005. The number of stations and networks stood at 182, 8 less than in 2004. Despite the loss of stations, advertising revenue edged up 0.7% to $302.6 million. The AM radio segment posted profits before interest and taxes for a third consecutive year in 2005, following losses from 1990 to 2002.
The trend is quite the opposite for FM radio. The number of stations is constantly progressing, from 369 in 2004 to 393 in 2005.
For many years now, FM radio has been at the head of the industry, and 2005 was no exception to the rule. This segment's advertising revenue climbed 11.3% from the previous year to break the $1-billion mark. The profit margin before interest and taxes, at 25.4% in 2005, is similar to what was recorded over the previous five years.
The profitability of radio broadcasters varied widely depending on the broadcast language. Ethnic stations had a higher rate of growth of their air time sales (+11.9%) than their English language (+9.0%) and French language counterparts (+6.7%). Anglophone stations, however, recorded the highest profit margin (22.8%), followed by francophone stations (11.0%), and ethnic stations (9.7%). This ranking has remained unchanged in the last five years. The main comparative advantage of English language stations is that they spend a smaller proportion of their revenues on programming and administration. |