Canadian Radio is Thriving

by

I’m from the subtropics, a land where snow is something you see on television and if winter gets down to 20 degrees it almost stops the city. Canada, as you may imagine, is alien terrain for me. Even the summers are often what I would find to be utterly freezing. I know this for a fact because I’ve been there in June.

One thing that is not freezing in Canada is radio profits. According to an article in The Canadian Press:

Statistics Canada says advertising revenue among private radio broadcasters advanced six per cent to $1.5 billion in 2007.

That’s the third time in five years radio advertising growth has outpaced advertising market growth as a whole.

Of course stations in larger, predominantly metropolitan markets are raking in much greater shares of the profit than others. That is the advantage of a concentrated audience. What I found to be particularly interesting about the figures presented was the size that margin of difference achieved:

[…] radio stations operating in the five largest census metropolitan areas last year generated almost twice as much profit before interest and taxes per dollar of revenue as stations operating in smaller markets.

The article attributes the rise in profits to a combination of factors including the transition of numerous AM stations to the FM band, a portion of the spectrum acknowledged to be both more popular with the listening public and also more popular — probably as a result of the first factor. Another factor cited is the greater concentration of ownership that followed regulatory changes in 1998, something which has allowed more stability in the face of competition from new media.

Photo courtesy of Ian Mutoo, used under ts Creative Commons license

Advertisements

Tags: , , , , , ,

2 Responses to “Canadian Radio is Thriving”

  1. Neil Hepburn Says:

    In other related news – Mix 99.9 Toronto has rebranded itself as a Virgin station (first in Canada).
    http://tinyurl.com/5vjx9e

    There was also a nice piece in last week’s G&M RoB about maritime based Newcap Radio buying up numerous smaller stations and investing in them.
    http://tinyurl.com/6rgmgn

    But where is this increase in revenues coming from? Obviously the shift from AM to FM is the biggest contributor, and companies like Newcap Radio have helped. But I wonder if it also has to do with our long commutes, which grow longer each year here in Toronto. Hmm, I just hope that these gas prices don’t impact radio listenership.

  2. George Williams Says:

    Hey Neil, welcome back! Your thoughts about skyrocketing gas prices are an aspect I must confess I had not considered in the overall equation.

    I think that contemporary “car culture” is a big factor for radio, as that is one of the places that broadcast proves its viability on a daily basis. Here in the US we have watched commute times telescope continuously over the years since the advent of the auto made suburbia a viable living option.

    I know that when I lived in NYC and Washington DC I was amazed at how extensive the commutes were across the board compared to my own Deep South home.

    I’ll definitely delve more deeply into that aspect in the future, thanks for the idea!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: