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The CRTC Annual Report on the Communications Industry

In Canada on July 29, 2010 at 16:37

The CRTC Annual Report on the Communications Industry

by dave on July 29, 2010

OTTAWA-GATINEAU, July 29, 2010 — The Canadian Radio-television and Telecommunications Commission (CRTC) today issued its annual Communications Monitoring Report. The report, which is based on 2009 data, provides an overview of the Canadian telecommunications and broadcasting industries.

In 2009, the communications industry accounted for 4.6% of Canada’s gross domestic product with overall revenues rising 2.1% to $55.4 billion, compared with revenues of $54.3 billion the previous year.

As technological convergence continues to evolve in the 21st century, Canadians are increasingly using mobile and Internet services to communicate and access broadcasting content. By the end of the year, there were 23.8 million wireless subscribers and 8.3 million broadband Internet subscribers.
Broadcasting

In 2009, revenues for the broadcasting industry rose by 3% and totalled $14.4 billion. Growth was primarily driven by the distribution of television signals and by the specialty and pay television sector, which recorded increases of 7.4% and 5.8%, respectively.

These gains were partially offset by a drop off in advertising. The effects were felt most strongly by conventional television stations and radio stations, whose revenues declined by 7.4% and 5.2%, respectively.

Internet usage among Canadians reached new highs in 2009, with the consumption of broadcasting content among the most popular activities. Twenty-five per cent of anglophones and 20% of francophones reported watching a television program online. Similarly, 17% of anglophones and 14% of francophones listened to a radio station’s audio stream over the Internet.

In 2009, the broadcasting industry contributed more than $2.8 billion to the development of Canadian talent and the creation and broadcast of Canadian programming.
Telecommunications

The telecommunications industry reported a 1.8% increase in overall revenues to reach $41 billion for 2009. The wireless and Internet sectors posted positive results, while revenues for long-distance and local residential telephone services continued to decline.

Broadband Internet, which enables the streaming and downloading of high-quality broadcasting content, was available to nearly every home through a variety of service providers. In addition, the percentage of Canadians that could access the Internet using their cellphones went from 91% to 96% in one year.

There was competition in all sectors of the telecommunications industry. Competitors of established companies reported $18.1 billion in revenues, which accounted for 44% of all revenues. In particular, cable companies increased their share of local telephone lines and residential Internet subscribers to 27% and 57%, respectively.

Communications Monitoring Report [PDF version – 7.10 MB] http://www.crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2010/cmr2010.pdf

The CRTC

The CRTC is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.

Additional information on the Communications Monitoring Report

The Communications Monitoring Report contains broadcasting data for the year ended August 31, 2009, and elecommunications data for the year ended December 31, 2009. The report reflects the worldwide economic downturn and the accompanying decline in advertising revenues experienced by broadcasters.
Broadcasting highlights
i) Radio

   * In 2009, Canadians could access 1,221 different radio services, including 41 digital services. There were 910 English-language services, 265 French-language services and 46 services in other languages.
   * The average time spent listening to radio services decreased 3.2% from 18.3 hours per week in 2008 to 17.7 hours in 2009. Private commercial radio stations captured 79% of the weekly radio tuning share; the CBC 12.7%; and other stations, 8.3%.
   * The revenues of private commercial broadcasters declined by 5.2%, going from $1.59 billion in 2008 to $1.51 billion in 2009.
   * In 2009, commercial radio stations contributed $51 million to the development of Canadian content.

ii) Television

   * In 2009, Canadians could choose from 704 television services, which consisted of 459 English-language services, 111 French-language services and 134 services in other languages.
   * Canadians watched an average of 26.5 hours of television per week, which was slightly below the 2008 average of 26.6 hours.
   * Overall revenues for commercial television services were relatively unchanged from one year to the next, coming in at $5.47 billion. A decrease in revenues for conventional television stations was mostly offset by an increase in revenues for specialty and pay services.
   * Private conventional television stations generated $1.97 million in revenues in 2009, which was down 7.8% from $2.14 billion the previous year.
   * Similarly, the CBC’s conventional television stations reported $392 million in advertising and other commercial revenues, a 5% decrease from $412 million in 2008.
   * Specialty, pay and pay-per-view television and video-on-demand services saw their revenues increase 5.8% from $2.9 billion in 2008 to $3.1 billion in 2009.
   * In 2009, private conventional television broadcasters invested $599.4 million on Canadian programming, or $20.2 million less than the $619.6 million spent the previous year. During the same period, spending on Canadian programming by specialty and pay television services totalled $1 billion, which did not a represent a change from the previous year.

iii) Broadcasting distribution

   * In 2009, 8.5 million households subscribed to television services delivered via cable or Internet Protocol Television. An additional 2.8 million households subscribed to satellite services.
   * The number of subscribers that receive digital television services jumped to 7.6 million in 2009, an increase of 11.9% over the 6.8 million subscribers a year earlier. Sixty-eight per cent of all subscribers now receive digital television services.
   * Revenues generated from the distribution of television programming went from $6.9 billion in 2008 to $7.5 billion in 2009, an increase of 7.4%.
   * On average, subscribers paid $2.78 more per month for their services in 2009, an increase of 5% over the previous year. This increase can be explained by higher monthly fees, a greater consumption of pay, pay-per-view and video-on-demand services, and consumers upgrading to digital or high-definition television.
   * In 2009, broadcasting distribution companies contributed $352 million to Canadian programming, including programming for community channels. This total was 8% higher than the $325 million allocated for this purpose in 2008.

iv) New media broadcasting

   * Anglophones spent 14.5 hours online per week in 2009, up from 13.8 hours, while francophones spent 11.8 hours online, up from 11.1 hours.
   * Anglophones spent 2.2 hours per week viewing online television content and 4.1 hours per week streaming radio content. At the same time, francophones spent 1.3 hours per week viewing online television content and 4.6 hours per week streaming radio content.

Telecommunications highlights
i) Revenues, expenditures and penetration

   * Telecommunications revenues increased by 1.8% in one year, growing from $40.3 billion in 2008 to $41 billion in 2009.
   * Competitors of established companies accounted for $18.1 billion, or 44%, of the total revenues, compared with $17 billion in 2008.
   * In 2009, telecommunications companies allocated $8 billion for capital expenditures, which are used to maintain, improve or expand networks. This amount represented a decrease of 33.4% from the $12 billion reported in 2008, but was more in line with the $7.8 billion spent in 2007.

ii) Wireless telephone services

   * Total wireless telephone services made up 41% of all telecommunications revenues as revenues grew 5.3% from $16 billion in 2008 to $16.9 billion in 2009.
   * The number of mobile telephone subscribers rose from 22.1 million to 23.8 million, an increase of 7.8% in one year.
   * Wireless networks reach approximately 99% of Canadians. More advanced wireless networks and expanded footprint, which support smartphones and other devices that connect to the Internet, were available to 96% of the population.

iii) Internet services

   * Revenues generated from the provision of Internet services increased by 6.3% in 2009, or from $6.2 billion to $6.6 billion. Internet services accounted for 16% of all telecommunications revenues.
   * In 2009, the number of residential Internet subscribers grew by 2.6% to 10.1 million, or 75% of all Canadian households.
   * Canadians continued to adopt faster Internet services. 62% of all households had a broadband service that offered download speeds of at least 1.5 megabits per second, as opposed to 52% a year earlier.

iv) Local and long distance telephone services

   * The number of local residential telephone lines dipped from 13 million in 2008 to 12.7 million in 2009. There was little movement in residential revenues, which came in at $4.79 billion, down slightly from $4.87 billion the previous year.
   * In 2009, local and long distance services accounted for 32% of all telecommunications revenues, compared with 52% in 2002.
   * Cable companies served 3.4 million residential telephone lines, or 27% of the residential market, and accounted for 23% of residential revenues with $1.1 billion.

v) International perspective

   * Canada had the highest penetration rate, at 78%, for broadband Internet connections, but lagged behind in mobile subscriptions with a penetration rate of 71%.1
   * A survey of five other countries revealed that prices for Canadian telecommunications service generally fell at the median point. Canada had the lowest rates for residential telephone service and the second-lowest for mid-level broadband Internet services (featuring download speeds of 1.5 to 9 megabits per second).2

Notes:

1 Compared to the United States, the United Kingdom, France, Germany, Italy, Japan and Australia.

2 Compared to the United States, the United Kingdom, France, Australia and Japan.

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