MONTREAL — Profits at Canada’s terrestrial nets plunged 62.5% to C$90.9 million ($86 million) in 2006, way down from $229 million in 2005, on revenues of $2 billion, unchanged from the previous year.
The slump is due to one reason — the networks, including CTV and CanWest Global, are spending more on Hollywood programming and that is eating into profit margins.
Programming costs increased to $1.4 billion in 2006 from $1.2 billion in 2005. The main networks have been on a spending spree to grab market share, with CTV hoping to maintain its dominance and Global trying to catch-up with its arch-rival CTV.
The Canuck TV networks as a whole reported an 8.2% upswing in revenue to just over $5.6 billion for the past year, thanks to a hike in revenue from cable, satellite and pay TV channels.
Profits for the cable and satellite TV sector remained little changed at $422 million last year, compared to $423 million a year earlier, on revenues up 11.2 % to $1.9 billion.