An Apple iPad is used to view Netflix in London, England in this file photo. (Gareth Cattermole/Getty Images for Netflix)
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Advertising revenue collected by conventional television broadcasters across Canada is in decline as digital platforms drain their market share, says the Canadian Radio-television and Telecommunications Commission (CRTC).
“Each year, a larger share of ad spending in Canada is flowing to the Internet and other digital platforms,” the CRTC wrote in its report titled, “Harnessing Change: Financial Model Of The Canadian Television Sector,” as first reported by Blacklock’s Reporter.
The report, which was published on March 3, said that the outflow of funds from conventional television to digital platforms will mean that even if broadcasters continue to retain a high audience share, it will “yield less advertising revenue than that same share does today.”
Total revenue in the Canadian broadcasting sector has been in decline since it peaked in 2014, wrote the CRTC, and in 2020 it dropped to a 10-year low.
The commission added that all of the sector’s segments have been declining since 2014 except education television, with the steepest decline being in the “private conventional television segment,” which the CRTC said generates revenue almost exclusively from ad sales.
“Even though it has been supplemented by the federal government in recent years, if revenues at Canada’s broadcasting distribution undertakings continues to decline, its long-term financial sustainability as an important source of production subsidy will be eroded,” wrote the CRTC.
The commission also wrote that “Canadian audiences are migrating away from predominantly ad-supported television platforms to predominantly subscription-driven platforms.”
“This migration will eventually show up in audience and ad-revenue figures, particularly, for non-Canadian programming, which itself, could increasingly migrate to subscription video-on-demand platforms such as Netflix and Amazon Prime Video,” it said.
Total revenue across Canada’s broadcasting sector reached over $7.5 billion in 2014, which was an all-time high.
By 2021, that number had dipped below $6.6 billion after hitting $6.3 billion in 2020.
The CRTC’s report also said that sports programming is the only genre of English-language Canadian television broadcasting that is still able to earn enough commercial revenue to cover overall production costs.
CBC president and CEO Catherine Tait told the Globe and Mail in February that the publicly funded broadcaster is planning to move away from radio and television programming in favour of complete digitization of its content.