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The Broadcasting Environment and CBC/Radio-Canada’s Audience Performance

The Broadcasting Environment and CBC/Radio-Canada’s Audience Performance. Prepared for Hubert T. Lacroix’s Appearance Before the Heritage Committee on April 27, 2009 Ottawa. Table of Contents. Overview of the Broadcasting Industry Financing the Broadcasting Industry

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The Broadcasting Environment and CBC/Radio-Canada’s Audience Performance

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  1. The Broadcasting Environment and CBC/Radio-Canada’s Audience Performance Prepared for Hubert T. Lacroix’s Appearance Before the Heritage Committee on April 27, 2009 Ottawa

  2. Table of Contents • Overview of the Broadcasting Industry • Financing the Broadcasting Industry • The English-Language TV Market • The Francophone TV Market • Emerging Technologies in the Video World • CBC Radio’s Audience Performance • Radio-Canada’s Audience Performance • Emerging Technologies in the Audio World • Internet • What the Public Says

  3. 1 Overview of the Broadcasting Industry

  4. 1. Overview of the Broadcasting Industry A $14.2 Billion Dollar Industry • A mixed private/public system • Employing some 53,000 Canadians • Main sectors of activity include: • Television • Radio • Distribution (Cable & Satellite) Source: CRTC*$2B of TV distribution revenue is paid to specialty TV broadcasters Source: CBC/Radio-Canada Annual Report 2007-08, Staff at March/09

  5. 1. Overview of the Broadcasting Industry Television: The Key Players • Operating revenues totaling over $6.0 billion • 22,000 employees • Main players: • CTVglobemedia • CBC/Radio-Canada • CanWest • Astral • Corus • Quebecor • Rogers Source: Private estimates based on CRTC Broadcast Policy Monitoring Report 2008, CBC/Radio-Canada Annual Return to CRTC

  6. 1. Overview of the Broadcasting Industry There Has Been an Explosion of Choice 438 349 282 Source: Nielsen Media Research, BBM

  7. 1. Overview of the Broadcasting Industry With Ownership Concentrated in Few Hands $5 Billion in Mega Mergers Approved in 2007 French Television English Television Based on 2007 Television Revenues (excludes CBC/Radio-Canada appropriation)

  8. 1. Overview of the Broadcasting Industry Usage of TV Has Remained Strong, Despite the Growth of the Internet Weekly Per Capita Hours of Viewing to Television All Persons 2+, 1987-1988 to 2007-2008 Source: BBM, Nielsen Media Research, Statistics CanadaAs of 2004-05, data are the results of a fusion of Mark II and PPM data. This has inflated per capita viewing over previous years

  9. 1. Overview of the Broadcasting Industry Radio: Providing the Local Connection • Operating revenues totaling $1.8 billion • Main players: • CBC/Radio-Canada • Astral • New Cap • Corus • Rogers • CTVglobemedia (CHUM) Source: 2007 Broadcast Policy Monitoring Report

  10. 1. Overview of the Broadcasting Industry Deregulation Has Led to Growth Total Revenues and PBIT Margin of Private Radio Radio Deregulated

  11. 1. Overview of the Broadcasting Industry And a Highly Concentrated Industry Which Became More so With Astral’s $1.1 Billion Purchase of Standard Radio (September 2007) Private Radio BEFORE Private Radio AFTER Based on 2006 Total Radio Revenues Based on 2007 Total Radio Revenues

  12. 1. Overview of the Broadcasting Industry There Has Been Some Slippage in the Usage of Radio Weekly Per Capita Hours Of Listening To Radio All Persons 12+, 1987 to 2008 Source: BBM (Fall Sweeps)

  13. 1. Overview of the Broadcasting Industry Distribution: 90% of Canadians Pay for TV Source: Nielsen Media Research, BBM

  14. 5 Companies Account for 90% of Subscribers 1. Overview of the Broadcasting Industry • Now the largest segment of the broadcasting industry • A $6.1 billion dollar industry • Major players: • Rogers • Vidéotron • Bell TV • Shaw / Star Choice • Cogeco

  15. Financing the Broadcasting Industry 2

  16. 2. Financing the Broadcasting Industry How Is the Industry Financed • Subscription revenues are now, by far, the most important source • The various sectors rely on different revenue sources • Note, this does not include the contribution of CTF and Tax Credits Source :Statistics Canada 2007

  17. 2. Financing the Broadcasting Industry Advertising on Conventional Television Is Flat and Expected to Decline Source: TV Basics (1996-2007); CRTC (2008) and TD Newcrest forecast (as of January 2009)

  18. 2. Financing the Broadcasting Industry However, the Current Economic Crisis Has Hit Conventional Broadcasters Particularly Hard Growth of Conventional TV Advertising (Broadcast Year-to-Date Change vs Prior Year) 10.0% Broadcast Year 2008 Broadcast Year 2009 (YTD) 8.0% Conventional TV advertising struggled to grow in 2008 … 6.0% 4.0% 2.0% 0.0% … and dropped precipitously when the economic crisis hit. -2.0% -4.0% -6.0% -8.0% Jul-08 Jan-08 Jun-08 Jan-09 Apr-08 Feb-08 Mar-08 Feb-09 Oct-07 Nov-07 Oct-08 Nov-08 Sep-07 Dec-07 Aug-08 Sep-08 Dec-08 May-08 Source: TVB TSS Advertising Tracking Reports (Released April 2009 with broadcast (Sep. - Aug.) year to date (YTD) February 2009 results)

  19. Advertising: An Important Part of Our Funding 2. Financing the Broadcasting Industry Revenues and operating sources of funds - CBC|Radio-Canada 2007-2008 (millions of dollars)

  20. But Our Advertising Revenue Has Weakened 2. Financing the Broadcasting Industry • Advertising is vital to the operations of our television networks • It represents 50% of CBC Television’s budget and 40% of Télévision de Radio-Canada’s • And like other conventional broadcasters, CBC/Radio-Canada’s advertising revenue has weakened CBC|Radio-Canada’s Advertising Revenues: 1990-2008(Dollars in millions and in 2008 constant dollars)

  21. 2. Financing the Broadcasting Industry … While Our Appropriation Has Remained Flat for Many Years • Our government appropriation has declined by almost $400 M since 1990 CBC|Radio-Canada’s Parliamentary Appropriation: 1990-2008(Dollars in millions and in 2008 constant dollars)

  22. The English-Language TV Market 3

  23. 3. The English-Language TV Market Almost Three-Fifths of All Viewing Occurs Within the Digital Universe Distribution Of Viewing to English TV by Viewing Environment Monday-Sunday, 24 Hours % DTH (Satellite) 24.3% Digital Cable 58.2% Analogue Cable Off-Air September to August Source: BBM Nielsen

  24. 3. The English-Language TV Market Those With the Most Choice Watch More TV Weekly Per Capita Hours of Viewing to Television by Environment ANGLOPHONES September 2007 to August 2008 Source: BBM Nielsen

  25. 3. The English-Language TV Market And They Enjoy a Multitude of Programming Choices A LOOK AT FRAGMENTATION Share of Viewing to English TV All Day (24 Hours) % September 2007 to August 2008Source: BBM Nielsen

  26. 3. The English-Language TV Market CBC US TV (Conv. & Spec.) 5% CTVglobemedia (Conv. & Spec.) 23% 28% Other Cdn TV (Conv. & Spec.) 14% 18% 5% 6% Astral Media (eng.) CanWest (Con. & Spec.) Rogers But These Choices Don’t Emanate from Diverse Ownership Share of Viewing to English TV All Day, 24 Hours % August 27, 2007 to August 31, 2008 Source: BBM Nielsen

  27. 3. The English-Language TV Market Increased Viewing to Specialty/Pay Has Impacted Viewing to Conventional TV Share of Viewing to English-language TV Station Groups, Prime Time (7 p.m. to 11 p.m.) % CBC* CBC* CTV CTV Global Global Other Canadian Conventional Other Canadian Conventional Specialty/Pay Specialty/Pay US Conventional US Conventional * Excluding Affiliates in own time Source: BBM Nielsen

  28. 3. The English-Language TV Market Top US Programming Remains the Most Popular Top 10 Series on English TV2007-2008 TV Season RANK 1 2 3 4 5 6 7 8 9 10 NETWORK CTV CTV Global Global CTV Global CTV CTV CTV CTV PROGRAM American Idol 7 – Performance American Idol 7 –Results Survivor: China House Grey’s Anatomy C.S.I. Miami C.S.I (Thursday) Desperate Housewives C.S.I (Monday) Dancing With The Stars 5 - Performance AMA 2,521,000 2,340,000 2,194,000 2,075,000 2,015,000 1,967,000 1,958,000 1,910,000 1,897,000 1,894,000 Note: Prime time shows only, August 2007 to April 2008. Excludes CTV’s Canadian Idol which ended in mid September.Source: BBM Nielsen

  29. 3. The English-Language TV Market CBC Television Remains the Home of Canadian Content English Conventional TV & Canadian Programming Prime Time % ‘September 2007 to August 2008’ Source: BBM Nielsen

  30. And the Network Airing the Most Popular Canadian Drama/Comedy Series 3. The English-Language TV Market Top 20 Canadian Drama/Comedy Series RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NETWORK CTV CBC CBC CBC CBC CTV CBC CBC CBC Global CBC CBC CTV CBC CTV CBC CBC CBC CBC CTV AMA 1,234,000 826,000 740,000 710,000 686,000 652,000 636,000 598,000 590,000 572,000 553,000 546,000 495,000 452,000 432,000 430,000 424,000 400,000 392,000 373,000 PROGRAM Corner Gas (Monday, 8 p.m.) Little Mosque (Tuesday, 8:30 p.m.) Just for Laughs (Sunday, 8 p.m.) Rick Mercer Report (Tuesday, 8 p.m.) Little Mosque (Wednesday, 8 p.m.) Robson Arms (Monday to Wednesday, 8:30 p.m.) The Tudors (Tuesday, 9 p.m.) The Border (Monday, 9 p.m.) Air Farce Live (Friday, 8 p.m.) The Guard (Tuesday, 10 p.m.) This Hour Has 22 Minutes (Tuesday, 8:30 p.m.) Rick Mercer Report (Friday, 8:30 p.m.) Corner Gas (Tuesday, 8:30 p.m.) Sophie (Wednesday,8:30 p.m.) Degrassi : Next Generation (Monday, 7:30 p.m.) Halifax Comedy Fest (Monday, 8:30) Winnipeg Comedy Fest (Monday, 8 p.m.) Halifax Comedy Fest (Tuesday, 9 p.m.) Heartland (Sunday, 7 p.m.) Instant Star (Tuesday and Sunday, 8:30 p.m.) Note: Prime time shows only, August 27, 2007 to April 6, 2008.Source: BBM Nielsen

  31. 3. The English-Language TV Market CBC Television’s Reliance on Analogue Cable and Off-Air Viewing Has Declined Distribution of Viewing to CBC Television by Viewing Environment Monday-Sunday, 24 Hours % DTH Digital Cable Analogue Cable Off-Air September to August Source: BBM Nielsen

  32. The Francophone TV Market 4

  33. 4. The Francophone TV Market The Francophone Digital Universe Now Accounts for 57.7% of All Viewing Distribution of Viewing Among Francophones by Viewing Environment Monday - Sunday, 24 Hours % DTH 37.6% Digital Cable 57.7% Analogue Cable Off-Air September to August Source: BBM (Quebec Only)

  34. 4. The Francophone TV Market But Off-Air Viewers Still Watch More Than 20 Hours of TV Each Week Weekly Per Capita Hours of Viewing to Television by Environment FRANCOPHONES in QUEBEC September 2007 to August 2008 % Source: BBM

  35. 4. The Francophone TV Market And They Have a Plethora of French and English Services from Which to Choose A LOOK AT FRAGMENTATION Share of Francophone TV Viewing in Quebec All Day (24 Hours) % September 2007 to August 2008Source: BBM

  36. 4. The Francophone TV Market But Two Companies Control More Than Half of These Services Share of Francophone Viewing Television among Ownership All Day, 24 Hours % English TV Radio-Canada 6% Other French Cdn TV 14% 14% Quebecor (Conv. & Spec.) 29% 25% Astral Media (fr.) 8% 3% Télé-Québec Remstar August 27, 2007 to August 31, 2008Source: BBM Nielsen

  37. 4. The Francophone TV Market All Conventional Networks Have Lost Ground to Specialty Services Share of Francophone TV Viewing in Quebec, Prime Time (7 p.m. to 11 p.m.) % Radio- Canada Radio- Canada TVA TVA TQS TQS Télé-Québec Télé-Québec Specialty/Cable Specialty/Cable English Stations English Stations Other Other ‘September to August’Source: BBM PPM 2004-2005 TO 2007-2008

  38. 4. The Francophone TV Market Radio-Canada’s Reliance on Off-Air Viewers Has Declined Significantly Distribution of Télévision de Radio-Canada Viewing by Environment Monday - Sunday, 24 Hours % DTH 30.7% 51.9% Digital cable Analogue Cable Note : Radio-Canada is less reliant on off-air viewers than CBC TV Off-Air September to August Source: BBM Quebec Francophones

  39. 4. The Francophone TV Market Radio-Canada Is the Leader When It Comesto Canadian Programming French-Languages TV Stations and Canadian Programming Prime Time % ‘September 2007 to August 2008’Source: BBM

  40. 4. The Francophone TV Market AMA 1,343,000 991,000 942,000 912,000 857,000 849,000 813,000 761,000 751,000 743,000 692,000 691,000 633,000 630,000 622,000 592,000 583,000 505,000 504,000 503,000 RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 PROGRAM Les Lavigueur, la vraie histoire Les Boys Annie et ses hommes Les Sœurs Elliot Taxi 0-22 Les étés d’Anaïs Destinées L’Auberge du chien noir La Promesse Nos étés KM/H Providence Histoire de filles Belle-Baie Le Négociateur Rumeurs Casino Virginie C.A. Le cœur a ses raisons NETWORK RC RC TVA TVA TVA TVA TVA RC TVA TVA TVA RC TVA RC TVA RC RC RC RC TVA But Is Not the Only One to Offer Series That Are Appreciated by Francophones Top 20 Drama/Comedy Series on French-Language Television Note: Prime time shows only, August 27, 2007 to April 6, 2008. Source : BBM

  41. Emerging Technologies in the Video World 5

  42. 5. Emerging Technologies in the Video World New Ways of Accessing Video Content • Technological advancements over the past ten years have given rise to a variety of new platforms for consumers to receive and view video programming, including video-on-demand (VOD), personal video recorders (PVRs), Internet streaming and Internet downloading. • These new platforms and technologies have affected the video opportunities available to Canadians in three key ways. • They significantly expanded where consumers can receive and watch video programming. • All of these new platforms, with the exception of some forms of Internet streaming, can be characterized as on-demand services which free viewers from the rigidity of program schedules. • Some new platforms provide video in a significantly different format from traditional television.

  43. 5. Emerging Technologies in the Video World More Video Programming Available Over More Distribution Platforms Illustration of Multi-platform Growth – Video • 1995 • TV Distribution • Over-the-air TV • Analogue Cable • Personalization • VCR • Specialty TV • Pay TV • 2008 • TV Distribution • Over-the-air TV • Analogue Cable • Digital Cable • DTH Satellite • Wireless Cable (MDS) • IPTV • Internet • Personalization • VCR • Specialty TV • Pay TV • DVD Player • PPV • PVR • VOD • Video Downloads • Video Streaming • Portable • DVD Player • Digital Video Player • Mobile Phone • Laptop Computer

  44. 5. Emerging Technologies in the Video World Ownership and Usage of Some of the New Video Devices Is Low Trends in the Penetration and Usage of Video Technologies Among Canadian Adults Source : CBC/Radio-Canada's MTM, 2008

  45. 5. Emerging Technologies in the Video World But Acceptance of These New ‘On-Demand’ Tools Is Higher Among Those Aged 18-34 Penetration and Usage of New Video Technologies Among Anglophone and Francophone Age Groups Source : CBC/Radio-Canada's MTM, 2008

  46. CBC Radio’s Audience Performance 6

  47. 6. CBC Radio’s Audience Performance CBC Radio Weekly Usage Maintained Despite Overall Decline in Radio Usage * The lock-out of CMG employees affected 6 out of the 8 weeks measured during S4 2005. Source: BBM

  48. 6. CBC Radio’s Audience Performance Audience Shares for CBC Radio’s Have Remained at Historic Levels 14.1 13.1 13.4 13.3 13.0 13.0 12.7 12.8 12.6 12.4 12.3 12.2 12.2 11.5 8.9 Base: Anglophones who listened in CBC areas * The lock-out of CMG employees affected 6 out of the 8 weeks measured during S4 2005. Source: BBM

  49. 6. CBC Radio’s Audience Performance CBC Radio One: Ranks in Top 3 in 9 Out of 10 Markets The Share of 12+ Listening Captured by Stations BBM S4 2008 Morning show runs from 6 a.m.-9 a.m. in Newfoundland & Labrador

  50. Radio de Radio-Canada’s Audience Performance 7

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