Statistic Canada reports radio is making a comeback after several difficult years in the late 1980s and most of the 1990s, thanks mainly to FM broadcasting.
The industry?s profits (before interest and taxes) represented 16.3 per cent of revenues in 2001, up from 13.6 per cent in 1998, according to the latest data.
The FM segment is one of the most profitable. The profit margin of FM stations (before interest and taxes) has surpassed 25 per cent for the past three years, while AM stations have incurred losses, the latest amounting to 3 per cent of revenues in 2001. However, the magnitude of AM losses has declined in the last two years.
In 2001, 64 per cent of FM stations realized a profit, compared with only 41 per cent of AM stations. Radio broadcasters have in fact outperformed television broadcasters for three straight years in terms of revenue growth and profitability.
Total revenues in the radio industry reached almost $1.1 billion in 2001, up 14.0% from 1998. FM revenues accounted for 71 per cent of total revenues in 2001, compared with 64 per cent three years earlier. The share of AM stations fell to 28 per cent from 34 per cent in 1998.
Total air time sales reached just under $1.1 billion in 2001, with FM radio again accounting for 71 per cent of the total. FM air time sales have grown at a pace of more than 7.5 per cent in each of the last three years.
Radio stations operating outside metropolitan areas had the strongest growth in airtime sales (+5.1 per cent) after lagging behind larger market stations in 2000. Their 12.6 per cent profit margin was still lower than the profit margin achieved by stations operating in larger markets, but the gap is closing.
The average weekly number of employees climbed to 9,311 in 2001 from 8,810 in 2000. This increase is partly explained by the launch of new stations. Labour costs represented 43.4 per cent of the industry?s revenues in 2001, unchanged from 2000.
But the concentration of media ownership is a concern to a majority of Canadians, suggests a poll commissioned by the Communications, Energy and Paperworkers Union. Sixty six per cent of the 1,000 respondents, aged 18 and over, agreed with the statement that media concentration was a serious problem and one that Ottawa should ?take steps to deal with.?
