Recession hitting broadcast and film industries harder than other culture industries: Conference Board report

The broadcast and film industries will suffer more than any other segments of the Canadian economy because of the global economic recession, according to the Conference Board of Canada. In a report that examines the impact of the recession on Canada’s culture sector, the board says broadcast and film advertizing revenues will especially be hit hard, shrinking 4.5% and 3.0% respectively. These percentages, together with revenue decline in nine culture categories examined in the report, represent an overall loss of $3.1 billion for the culture economy this year. In total, the culture industry was expected to rake over $72.2 billion in revenues for 2008. “The Conference Board estimates that the global recession will reduce the real value-added output of the culture sector by 4.8 per cent below what it would have been in the absence of the recession,” the report notes. In dollar terms, real-added value for the culture sector will reduce by about $2.2 billion this year. The decline in advertizing revenue is driven by low levels of business spending. Titled The effect of the global economic recession on Canada’s creative economy in 2009, the report estimates that industries that rely on advertizing will witness a 12.1% drop in business spending on advertizing. This effect is already visible in the broadcast and film industries. Major broadcasters like the CBC and Canwest have shed 800 and 560 jobs respectively due to dwindling ad revenues brought about by the recession this year. CTV cut 225 jobs this year. As well, lack of advertizing has forced broadcasters to shut down stations and sell assets. Some, like Canwest, have filed for bankruptcy protection. For the film industry, which the report says receives over 56% of its revenue from corporate spending by Canadian businesses, this news is also disheartening. Some members of the Director’s Guild of Canada (DGC) have had to endure long periods of unemployment, while others were forced to seek alternative employment outside the industry, the report notes. Quoting Brian Anthony, CEO and president of the DGC, the report captures a poignant picture of despair in the industry. “One Guild member came by the office to pay his membership dues in the hope that business will eventually pick up,’ said Anthony, “In the meantime, he found other employment: he was wearing a Canada Post uniform and was on his rounds.” Others in the industry echoed this sense of gloom. Sadia Zaman, executive director of Women in Film and Television (WIFT), says her organization has had to introduce a career transition program in recognition of the fact that many would not be returning to the industry, according to the report. However, the report has some good news for the broadcast and film industries, including other sectors of the culture industry that also rely on government support. Government funding is expected to hold steady compared to other sources of revenue. As a whole the culture sector receives 14.1% of its revenues from government sources. About 46.6% of this amount comes from the federal government, while the balance is sourced from provincial and municipal governments. About 91.0% of government funding for the broadcast industry comes from the federal government, and 9.0% comes from provinces. For the film industry, 74.6% of government funding is derived from the federal government and 25.4% is sourced from the provinces. “Nevertheless, the impact of the global recession on government spending will differ depending on the level of government. Although the global recession has triggered more spending on goods and services at the federal level, it has significantly reduced spending at the municipal level,” the report says. The report does not address the impact of the global recession on the digital media industry and cites two reasons for the omission. First, it notes that digital media is not classified as one of the categories of culture goods and services recognized by Statistics Canada. Secondly, it observes that data for digital media are quite limited, hindering accurate parameters for measurement. As a whole, the report concludes that the culture sector is a vibrant and important contributor to the Canadian economy. However, it warns that the sector is not immune to the effects of the global recession and suggests that salvation lies in flexibility and adaptation to changing trends and tough economic realities.

Recession hitting broadcast and film industries harder than other culture industries: Conference Board report

Broadcast | December 10, 2009

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