Quebec OTA profit margins highest in the country: Rogers

Profit margins for private, conventional television broadcasters are higher in Quebec than anywhere else in the country, a study commissioned by Rogers Communications Inc. said. The study, conducted for Rogers by Strategic Inc. and cited in a Rogers application to the CRTC, found that Quebec’s private conventional broadcasters' pre-tax profits almost doubled over the past five years, rising on average from 5.1 per cent in 2007 to 10 per cent in 2011. Conventional, over-the-air TV stations' primary revenue source is advertising. The Quebec stations' 2011 profit margin “is higher than in any other region in Canada,” Rogers said in the June 19 CRTC application, published this month on the CRTC's website. In the application, Rogers seeks regulatory approval for its proposed $10.3-million acquisition of Montreal ethnic broadcaster CJNT-TV from Channel Zero Inc. Rogers plans to add CJNT to its Citytv network to help it compete for national advertising dollars with rival networks operated by BCE Inc. (CTV) and Shaw Communications Inc. (Global). Rogers has agreed to support a broadcasting application by a numbered company to operate a new, over-the-air, ethnic TV station in Montreal. The company says it will support that proposed station through tangible benefits and other assistance if the CRTC approves both applications. The company is trying to grow its Citytv audience share and advertising revenues by expanding the TV network into new markets. In January, the CRTC approved Rogers' purchase of the Saskatchewan Communications Network (SCN) for $3 million, which the company will use to air Citytv programming in Saskatchewan. According to the Rogers application, Strategic found that Quebec broadcasters improved operating profit margins over the past five years from 9.1 per cent in 2007 to 14.2 per cent in 2011. Rogers said “the private television sector in Quebec is the most profitable in Canada, meaning that it could readily cope with the presence of Citytv programming broadcast by a local station in the market.” Strategic pointed to room for growth in the Montreal advertising market, estimating it will grow by $82 million over the next five years, Rogers said. The application said other economic indicators, such as expected growth in retail sales, point to “positive growth and forward momentum” in the Montreal advertising market. “It is one of the top advertising markets in the country and the positive economic indicators suggest that this position is not likely to change over the next five years,” Rogers said. Strategic also found that Montreal-area residents are tuning in to Citytv programming offered over U.S. border stations and on Citytv signals retransmitted from distant markets, Rogers said. U.S. conventional broadcasters now hold a “12.8 share” of overall hours tuned in to the Montreal market, the company said. Offering a local Citytv station in Montreal would “repatriate” some of those tuning hours, Rogers said. “These findings clearly support the conclusion that the increased advertising revenues that Citytv Montreal will be able to generate will have negligible impact on other broadcasters in the market,” Rogers said. news@thewirereport.ca

Quebec OTA profit margins highest in the country: Rogers

Broadcast | September 24, 2012

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Quebec OTA profit margins highest in the country: Rogers

Broadcast | September 24, 2012

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