Barry Kiefl, Canadian Media Research Inc.

1. Barry Kiefl,Canadian Media Research Inc. Trends in TV Audiences and Public Opinion 1996-2006With Special Reference to CBC English TV Prepared on Behalf of Friends of Canadian Broadcasting for an Appearance before the House of Commons Standing Committee on Canadian Heritage in Vancouver on March 14, 2007

2. 1. TV Set Ownership, DTH/Satellite Subscription Trends, Over-the-Air Reception and New Video Technologies

3. Trends in DTH/Cable TV PenetrationSubscription to satellite TV has grown substantially in the past few years, as the chart top right indicates. It is important to note that even before Canada’s two DTH suppliers, Expressvu and StarChoice, entered the market, a limited number of Canadians had satellite service in their homes. In the period 1995-1997 the percentage of Canadians with a home satellite dish hovered around 3 per cent, according to BBM. By fall 1999 penetration had increased to almost 8 per cent and it grew by 3-4 percentage points annually in the 1999 to 2003 period. In 2005-06 DTH growth stabilized. Cable TV subscription rates in this same period have declined by some 11-12 percentage points, as shown in the chart below. Subscriber losses were most pronounced once Canada’s DTH licencees became well entrenched starting about 1999. Note that the BBM fall surveys employ a very large sample size, in excess of 75,000 respondents, and the statistical margin of error in these estimates is very small.

4. Trends in DTH/Cable TV PenetrationThe combined penetration of cable and DTH was some 90.4% in fall 2006, that is, about 1 in 10 Canadians now depend on over-the-air (OTA) reception of TV, according to BBM, a shrinking but still substantial audience. Given the trends in the past 4-5 years, it seems unlikely that the OTA segment will decline by much in the coming years.

5. Is the Over-the-Air (OTA) Audience in Rural, Small or Large Urban Centres? The CBC said in a recent submission to the CRTC: “Today, however, smaller and rural communities rely heavily on DTH reception and have very little OTA reception….OTA reception in major population centres – once considered quite low relative to rural areas – now reflects the most significant over-the-air reception in Canada.” This seems counterintuitive and is somewhat of a surprising claim. BBM diary surveys, which employ a sample of more than 75,000 respondents each fall, were used to examine the CBC’s claims. Since BBM does not conduct diary surveys in Toronto/Vancouver, Nielsen fall 2005 data were used in these markets. The fall 2006 BBM survey shows similar results. The table at right shows that many small communities still rely on off-air reception. Over 10% of all viewing hours were off-air in the BBM fall 2005 survey in such communities as Windsor, Chatham/Kent, Leeds/Grenville, Northumberland, Lambton, North Okanagan, Norfolk, Brandon and Kingston. Other small communities above the national average included Yorkton, Orillia, Red Deer and Prince Albert. Off-air viewing in the two largest English markets, Toronto (5.1%) and Vancouver (2.2%), is significantly lower than in these smaller communities, which seems contrary to the claim made by CBC.

6. What About CBC’s Over-the-Air Audience? In its TV policy submission to the CRTC, CBC stated: “…over-the-air transmission will only remain a viable distribution technology for the distribution of television programming in major urban centres.” The CBC submission mentioned three times that only 7% of all TV viewing in 2005-06 was over-the-air, without referencing the stark English-French differences (French is more than twice the English). The submission also went to some effort to demonstrate that a small proportion of the CBC’s audience was delivered off-air by its owned and operated stations, especially in rural or remote areas. However, this ignored the fact that much of the CBC audience in these areas is delivered by CBC affiliates, not CBC owned stations. To the OTA CBC viewer, it makes no difference whether the transmitter is owned by the CBC or an affiliate. The table at right confirms that only 7% of all viewing in fall 2005 was off-air. 1 in 10 people rely on off-air reception but because they are lighter viewers, only 7% of total viewing is off-air. The table also reveals that some 14% of CBC English TV viewing in total was off-air in 2005 and, importantly, the CBC off-air audience was at its highest in places such as Windsor (50.5%), Saskatoon (32.4%), Leeds/Grenville (31.8%), Northumberland (31.8%), Orillia (29.3%) and Norfolk (28.2%). The CBC stated in its submission: “In certain major markets, CBC/Radio-Canada stations get as much as a fifth of their viewing from over-the-air households.” This analysis shows that the CBC English off-air audience alone exceeded 20% in some 20 locations, many of them smaller, remote communities. In the two major markets of Vancouver and Toronto the CBC off-air audience is 10% or less, that is, less than the CBC national average and the apparent opposite of the CBC’s assertion.

7. According to BBM, there are 26,100 people who watch TV off-air in Okanagan-Kamloops and 188,700 in Vancouver. Almost 3 million Canadians nationwide depend on over-the-air reception.

8. Special CRTC Off-Air Survey: What One Station Would you Choose? CMRI conducted a special survey for the CRTC in fall 2006 among those Canadians who did not have cable or satellite TV. Approximately 1,000 OTA viewers were surveyed. Naturally, there are differences among Anglophones and Francophones but both language groups chose CBC TV over all private broadcasters and provincial public broadcasters as the one station they would want off-air. Some 44.7% of Anglophones chose CBC as the one station they want to receive off-air and 45.7% of Francophones chose Radio Canada, well ahead of the nearest private broadcaster in each case.

9. HDTV 2002-2006The TV Trends and Quality Survey (TVQ Survey) has explored interest in HDTV, PVRs and other new TV technology over the past 5 years. In particular, respondents were asked about their likelihood of purchasing an HDTV set in the coming year. As shown in the graph, interest in HDTV sets at the price point we tested, $1500, was modest 2-3 years ago but interest levels changed somewhat in 2005 for the first time and these changes continued in 2006. In 2006 some 11.4% of respondents indicated they already had an HDTV, compared to less than 1% five years ago. And the size of the group who said they are not at all likely to purchase an HD set shrank to 48.3% in 2006. The number of people who said they already own an HD set was about 1 in 5 in digital cable and DTH households in fall 2006. HDTV interest within analogue cable homes is lower than in digital homes.

10. PVRs and Other New TV Technologies in 2006The percentage of Canadians with a DVD player has increased substantially in recent years and stood at 73.5% in fall 2006, according to BBM. The percentage reporting that they have a PVR was only 6.1% and even among young adults adoption rates of personal video recorders was below 10%. Penetration of PVRs is likely to grow in coming years and is a potential threat to TV advertising in that a viewer can by-pass ads in whole or part using a PVR. As a result, Nielsen and even Tivo, the company credited with the invention of the PVR, are providing advertisers and agencies with second-by-second commercial ratings data and will monitor the use of PVRs carefully.

11. BBM data reveal that some 63% of all Canadians aged 2-plus used the internet on a weekly basis in 2006. The number of hours per week spent using the internet in 2006, according to BBM, was some 3.8 hours per person, about one-sixth the amount of time spent watching TV. Other surveys put weekly internet use at 5-6 hours per week. BBM data, like many other recognized surveys, show that hours spent with the internet for personal use are but a fraction of the time spent with TV; internet use peaks among Teens (6.4 hours/week) and males 18-34 (6.3 hours/week). Not coincidentally, TV use is substantially lower in these segments (but still much higher than internet use).

12. Comscore, the internet ratings company, reports that Canadians on average spent 332 minutes per week in March 2006 on the net, about 5.5 hours weekly, which includes usage at work. The top 20 web domains for March 2006, according to Comscore, are shown in the table below, ranked by monthly audience reach. Comscore releases data for 5,000 different web sites each month. MSN, Hotmail, Google, etc. tend to dominate the top 10 and command large shares of total internet use because so much use is related to sending and receiving email and searching for information. Case study:cbc.ca was ranked 20th among all web sites in March 2006. Its monthly reach was some 4.2 million users but it had only 475,000 daily users who spent on average 6.6 minutes on the site and its share of all internet use was only 0.21%, a function of the many competitors, Canadian and international, on the net. cbc.ca’s average audience at any given moment in March 2006 was 2,200 users, about equal to the number of viewers to a very small specialty TV channel.

13. 2. Trends in TV Viewing Levels and Market ShareThe audience data used in this section are derived from the Nielsen Media Research people meter system, which has been in Canada since 1989 and is the most authoritative source for viewing data covering the past decade. A description of the Nielsen survey methodology can be found on Nielsen’s web site: https://www.nielsenmedia.ca/S_index.htm.

14. TV viewing levels are at historically high levels This was about the time internet growth took off Note: BBM reports that per capita radio listening has declined from 21.6 hours/week in 1996 to 20.4 hours/week in 2006.

15. Even kids are watching more TV than a decade ago

16. Older adults have always watched more TV and are a ‘natural’ and growing audience for CBC TV (and radio)

17. All of Canada's population growth will come from older age groups over the next 25 years; the older audience is not ‘dying off’; for every one that does, two will replace them. CBC TV and radio should be seeking ways to serve this growing older audience. All population growth will be in the older age groups Youth will decline as a percentage of the population

18. Audience Share of English-language Station GroupsPersons 2-plus, 24 Hours, 1995-2006% U.S audience share has declined since 1995 U.S. Specialty U.S. Broadcasters Cdn Broadcasters Cdn Pay/Specialty Source: CMRI (Nielsen, September-August) Canadian specialty channels have more than doubled their audience since 1995

19. Audience Share of English-language Station GroupsPersons 2-plus, 24 Hours, 1995-2006% CBC’s audience share has declined since 1995 U.S. Specialty U.S. Broadcasters CBC TV Other Canadian Broadcasters Cdn Pay/Specialty Source: CMRI (Nielsen, September-August)

20. Audience Share of French-language Station Groups Persons 2-plus, 24 Hours, 1995-2006% French broadcasters have maintained most of their audience share since 2001 Canadian Broadcasters Canadian Pay/Specialty French specialty channels have been steady since 2002 Source: CMRI (Nielsen, September-August)

21. Audience Share of French-language Station Groups Persons 2-plus, 24 Hours, 1995-2006% Like CBC, Radio Canada’s share has declined since 1995 Radio Canada Other French Broadcasters French Pay/Specialty Source: CMRI (Nielsen, September-August)

22. Is audience share the best measure of performance for a public broadcaster? • Audience share is calculated on all TV viewing, including the audience to WWE, Fear Factor, XXX porn, Bowflex infomercials, etc. • Evaluating itself primarily by audience share/eyeballs puts CBC TV in the ratings ‘game’ which serves to drive out quality programs

23. Weekly audience reach is a better measure of CBC’s audience performance… • Over 10 millionCanadians watched CBC TV for 30 minutes or more in the average week in 2005-06, roughly 4 times more than the number who read the Globe and Mail • Almost 5 million Canadians watched Radio Canada for 30 minutes or more in the average week in the 2005-06 TV season, more than 5 times the number who read La Presse

24. CBC and Radio Canada have maintained their audience reach in the past 5 years Question: what is 30-minute weekly audience reach of cbc.ca? Answer: a tiny fraction of the CBC TV services, given that the average Canadian spends only about 1 minute/week on CBC’s web sites (Source: Comscore), compared to 120 minutes watching CBC TV and 100 minutes listening to CBC radio.

25. 3. Trends in Canadian Program Audiences Data in this section dealing with program genre and origin are based on a proprietary system developed by CMRI that estimates the national audience for U.S. networks, both broadcast (CBS, NBC, ABC, etc.) and specialty networks (A&E, TBS, etc.), and all Canadian channels.

26. The challenge facing English TV goes back almost 50 years. Since 1960, when CBC TV was the only Canadian TV service available, the viewing share of Canadian programming in prime time (6pm-midnight) has remained constant at about one-third of total viewing. English Canadians have always watched a lot of foreign, i.e., U.S. television programming. (Note: only data for the 6pm-midnight period are available for the very early days of TV.)

27. On a whole day basis, about one-third (33.1%) of English TV viewing went to Canadian programs in 2005-06. In news, information and sports, Canadian programs represent the majority of viewing and Canadian shows perform relatively well in variety, quiz, etc. but in the key areas of drama, movies and comedy, foreign programs dominate.

28. In prime time, the share of viewing to Canadian programs drops to about one-fourth of all viewing (26.6% in 2005-06). In the category of comedy/animation, foreign programs had 3times the Canadian audience; foreign movies/MOWs had 6 times the audience of Canadian programs. In the important program category of drama series, foreign programs had 10 times the audience of Canadian drama series in the 2005-06 TV season (24.1% compared to 2.4%).

29. TV is the most important communications medium in our lives, taking more of our time and attention than radio, newspapers, magazines or the internet. In English TV, young children aged 2-11 and teens 12-17 spend most of their TV viewing time watching foreign, mostly U.S. programs, while in French TV the opposite is true. Comment: Is it any wonder that we have two solitudes, given that in English Canada we allow our children in their most formative years to grow up being overwhelmed by the ideas and values of another country?

30. How does CBC TV compare to the industry average? Canadian Content on CBC English TV 2005-06: • CBC’s schedule depends heavily on sports, to the exclusion of other programming. In the 2005-06 TV season about 23% of CBC TV’s prime time schedule was comprised of sports and it accounted for some 48% of the total CBC audience that year. Most of it was professional sports. • Less than 5% of CBC TV’s prime time audience was for Canadian drama series or MOWs and other drama. Foreign drama accounted for approximately three times the audience of indigenous drama. • These data are consistent with trends in the past few years, with the exception of the year the NHL players were locked out.

31. What Does the Public Think About TV and CBC in Particular? Data in this section are from the TV Trends and Quality (TVQ) Survey, an annual national survey of Canadians’ attitudes toward television. The TVQ is conducted in October-November each fall among a sample of approximately 1,500 Canadians aged 18-plus (MOE +/-2.6%). More details are included in the appendix.

32. Overall Satisfaction with TV 2002-2006Anglophone Canadians are generally quite satisfied with television and satisfaction levels have been stable the past 5 years. In any of the past five years only 2-4% said they were very dissatisfied with TV. While personal satisfaction with TV is high, there are about 1 in 5 who express some level of dissatisfaction. Anglophones and Francophones both indicated high levels of satisfaction with TV overall in the fall 2006 survey.

33. Interest in Different Program Types 2006 • What types of programs are Canadians most interested in? We asked TVQ Survey respondents to tell us their level of interest in some 42 different categories of program. • Interestingly, local news was the overwhelming choice of the majority. More than 60% of people indicated that they were very interested in local news. No other program category came close. • National news was the second highest rated category with about 46% saying they were very interested. International news (33%), Hollywood movies (27%) and documentaries (27%) were next, almost exactly the same as last year and other previous years. • A variety of categories fell in the 15-25% range: professional sports, weather forecasts, science and nature programs, sitcoms and prime time drama. The program categories that people are least interested in include classical music, ballet and opera and infomercials. • Of course, people from different age groups are significantly different in their program interests. The table shows that older people are more interested in national and international news. Younger people are much more interested in Hollywood movies and some other forms of drama. Younger people are about six times more interested in Reality programs than older people.

34. Local News 2002-2006 Local news has consistently ranked as the program type that Canadians are most interested in; 2 in 3 people say they are very interested, while less than 1 in 10 say they are not interested or only somewhat interested in local news.

35. National News 2002-2006 In 2006 Canadians said they were very interested (45%) or interested (41%) in national news and interest levels have also been consistent for the past five years.

36. International News 2002-2006 However, interest in international news is not as high. Only about 1 in 3 say they are very interested in international news and this has not changed in the past 5 years.

37. Prime Time Drama 2002-2006 Audience interests vary considerably and generally range across a wide spectrum of program types. Various forms of drama rank high in audience interest. For example, only about 1 in 6 say they are not at all interested in prime time drama and this has been consistent over the past 5 years.

38. Importance of CBC Radio and TVThe public thinks CBC TV and radio are very important to Canadian culture. 9 in 10 Anglophones and Francophones said that CBC TV was important or very important in fall 2006 and at least 2 in 3 felt that way about CBC radio. No other cultural agency has the same level of importance in the public’s mind.

39. Best National News 2002-2006Many networks offer national news programs, either in the early evening or late night. The network that was judged as providing the best national news in 2006 was CBC TV (28%) and CBC Newsworld was chosen by 17%.[1] CTV was chosen by 18% and CTV Newsnet by 6%. Global (14%) held onto gains that it made in 2005 but was still well back of CBC TV. [1] Totals in these charts do not add to 100%; missing stations are too small to report.

40. Best International News 2002-2006 CNN was the network of choice for international news, with some 31% saying it offers the best news in this category. Interestingly, CBC Newsworld took second position (25%), ahead of CBC TV (13.5%). CNN’s coverage of the continuing war in Iraq and other high profile events is probably related to this finding. CTV and CTV Newsnet were both far behind in this category.

41. Best Local News 2002-2006 CTV was the clear leader in local news, chosen by some 33% as having the best local news programming. Global was second with 21%, its best score in the past 5 years, while CBC lost ground again and had only 7% support in 2006. Given that interest in local news is higher than for any other single category of programming, CTV’s leadership in this program category is probably related to its relatively high overall satisfaction score compared to many other channels.Only 4.5% of British Columbians rated CBC TV as having the best local news in fall 2006.

42. Most Trusted News 2002-2006 The major networks often make claims about being the most trusted source of news. In this year’s survey CTV was once again chosen as the network whose news you trust the most (24%), with CBC close behind (21%).

43. Best Public Affairs 2002-2006 CBC (27%) and CBC Newsworld (13%) had impressive scores as the station with the best public affairs programs. No other network finished in double figures.

44. Best Canadian Programs 2002-2006 CBC (56%) was the overwhelming choice as the best station for Canadian programs, well ahead of CTV (16%) and Global (4%) in 2006, a year that saw CBC improve over the previous year.

45. CBC is also the best at reflecting Canada’s regions

46. However, CBC TV has a major weakness in prime time; very few say CBC has the best prime time programs

47. Generally speaking, in surveys people will say they are satisfied with most TV networks. That is true of CBC, however, viewer satisfaction with CBC TV in 2006 was below that of many other networks, including PBS.

48. Station Closest to Your Ideas and Tastes 2002-2006 To test where CBC TV stands versus other TV services, one needs to ask Canadians a question like which one station comes closest to your ideas and tastes. CBC (11.3%) was in third position behind CTV (16.6%) and Global (12.5%) in fall 2006. CBC’s position has declined over the past 5 years, while CTV and Global have either held steady or improved.

49. Summary • In the past 10 years, the percentage of Canadians who subscribe to cable TV or satellite has increased by about 10 percentage points and the number of people relying solely on over-the-air reception has been cut in half. As a result many conventional broadcasters are facing greater competition and naturally receive much less of their audience from over-the-air reception. • CBC still depends on over-the-air reception for much of its audience. Contrary to the CBC’s claims, many Canadians in rural and small urban centres still rely on over-the-air reception to receive CBC and other TV stations. In total some 3 million Canadians still rely on OTA reception and this will likely not decline significantly in the coming years. • The majority of Canadians have adopted DVDs but only about 1 in 20 have a PVR. Ownership of HDTVs stood at roughly 11% in fall 2006 and interest in purchasing an HD set has increased over the past 5 years. • TV viewing, according to Nielsen meter data, on a per capita basis has increased from about 23 hours per week ten years ago to about 26-27 hours in 2005-06. • The internet is used by the average Canadian for only about 5-6 hours weekly and in net terms has not taken audience away from TV. • CBC, like other internet players, with perhaps the exception of Google or Yahoo, can only hope to capture a small share of internet use. CBC radio and TV will continue to be the most important way of reaching Canadian audiences for years to come. • Younger people watch less TV and use the internet more than older people but even children and teens are watching as much or more TV today than a decade ago. • The audience share of Canadian conventional broadcasters has declined over the past decade and Canadian specialty channels have grown in this time period. However, much of the specialty growth has been at the expense of U.S. broadcasters and U.S. specialty channels. The share loss of Canadian conventional broadcasters has in large measure been offset by increases in TV viewing and Canadian broadcasters have almost the same audience to sell to advertisers today as ten years ago. CBC TV in 2006 accounted for only about 6% of total English TV viewing and about 15-16% of French TV viewing. While audience share of CBC has declined, it still is used by many millions of Canadians at least once per week.

50. Summary (continued) • Canadian English TV broadcasters are very successful in several categories of programming, especially news, information and sports. However, in several key program areas, notably drama series, movies/MOWs and comedy, Canadian broadcasters, both conventional and specialty, have had limited success. In prime time, foreign drama series in 2005-06 had ten times the audience share of Canadian series. • CBC plays a much less important role in the broadcasting system today than a decade or two ago and its role is further diminished by the paucity of drama and other compelling entertainment programs in its schedule. In recent years CBC has become so dependent on sports and foreign drama for audiences that other programs have been squeezed from its schedule. • Canadians are generally very satisfied with TV. They are very interested in TV news, especially local news, but also have very high interest levels in various forms of TV drama. • Without question, Canadians think that CBC radio and TV are important to our culture. Moreover, CBC English TV is considered by Canadians to be a leader in national and international news coverage and public affairs. However, CBC TV falls far short of other stations in local news coverage and in prime time entertainment programming. As a result, according to the TV Trends and Quality Survey, in 2006 CBC TV was not as close to the values and tastes of Canadians as other stations. Canadians’ overall satisfaction rating of CBC TV was below that of many other TV stations.