Ad Market Recovery Drives Canadian TV Revenue Momentum

Signaling a recovery in ad sales and subscriber growth, domestic cablers and broadcasters post improved results during earnings season.

TORONTO – With rebounding ad markets and subscriber growth signaling industry recovery, Canadian broadcasters and cable operators are enjoying an impressive start to 2011.

Canuck broadcasters Astral Media and Corus Entertainment got the current reporting season started this week by posting increased radio and TV revenue on a steadily improving ad market.

Montreal-based Astral’s total revenue, including subscription fees and pay-per-view sales, increased 7% to $267.1 million.

And Corus, which is set to launch Oprah Winfrey’s OWN Network in Canada on March 1, posted first-quarter revenue up 8% to $240.6 million, over 2009.

At the same time, both Astral and Corus saw their first quarter earnings slide due to one-time gains from income tax recoveries and regulatory fee reversals recorded last year in fiscal 2010.

Also Thursday, broadcaster and cable operator Cogeco Inc. posted first quarter revenue up 4.5% to $342.8 million, on earnings of $16 million, against a year-earlier $22.7 million, again due to a favorable income tax adjustment last year.

Montreal-based Cogeco secured another 70,690 subscribers in Canada during the latest quarter, and 20,179 new subscribers in Portugal.

The outlier this reporting season is Shaw Communications, the western Canadian cable giant that posted Thursday a 19% revenue gain to $1.08 billion. 

At the same time, Shaw recorded an 82% plunge in earnings to $20.3 million, from a year-earlier $114.2 million, due in part to one-time charges associated with its recent $2 billion takeover of the former Canwest Global Communications Corp.’s TV assets.

Calgary-based Shaw, which has experienced executive suite turmoil in recent months, also announced that it will delay its launch of a wireless phone division to early 2012.

"The rapid evolution of wireless technology and changing market conditions, we believe it is best to take a disciplined approach to our wireless rollout to ensure we deliver an exceptional customer experience,” newly-installed Shaw Communications CEO Brad Shaw told investors Thursday at the company’s annual shareholders meeting.

Brad Shaw surprised analysts by recently replacing brother Jim Shaw Jr. as CEO ahead of schedule, and the cablecaster has seen its wireless phone division head, Laurence Cook, make an early exit as well as vp of wireless.

Shaw initially planned to launch a wireless phone service in September 2011, just as young Canadians return to school.

But the cable giant has much else on its plate, including digesting the former Canwest Global Communications Corp.’s TV assets, which have been rebranded as Shaw Media.

During the latest quarter, Shaw recorded $58 million in integration costs from its Canwest Global takeover.

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