Hundreds of local radio and TV stations could shutter in next three years

28 August 2020 Consulting.ca

Up to 200 Canadian private local radio stations and 40 private local TV stations could close by 2022, according to a new report from media consultancy Communications Management that was commissioned by the Canadian Association for Broadcasters (CAB).

The economic impacts of the coronavirus pandemic have accelerated the revenue collapse of local broadcasters (TV and radio). In the past 15 years, the internet has severely eroded the advertising revenue base of local broadcasters – with Craigslist and Kijiji supplanting local classified ads sections, and platforms such as Google and Facebook siphoning off other ads.

Private radio revenues have been in decline since 2014, with 40% of private radio stations posting negative profits before interest and taxes (PBIT) in 2019. Private conventional TV revenues have declined in six of eight years after 2011, and 70% of stations had a negative PBIT in 2019.

The CAB report projects that advertising revenues for Canadian private radio stations will decline by $383 million in 2020 from 2019 levels, while ad revenues for TV stations will drop an estimated $260 million.

Hundreds of local radio and TV stations could shutter in next three years

The compounded challenge of a coronavirus-impacted reduction in ad spending could lead to an estimated $1.06 billion revenue shortfall for local broadcasters over the next three years.

This will result in up to 50 radio stations shuttering in the next four to six months, and a further 100 to 150 stations in the next year-and-a-half. The closure of 200 of Canada’s 737 private radio stations would result in 2,000 job losses, or 24% of 2019 employment levels.

Meanwhile, the report projects 40 or more of Canada’s 94 private local TV stations could close in the next 12 to 36 months.

The internet and coronavirus destroying the financial sustainability of industries and business models isn’t unique to the local media landscape – which also includes floundering community newspapers. But local broadcasters are arguing that their coverage of local affairs provides a critical service in a functioning democracy - and is worthy of extensive government intervention and support. The elimination of local media would force smaller communities to turn to national and international sources for news that would be less likely to cover local topics – including municipal government affairs and community-specific pandemic news and guidelines.

“For generations, local news and journalism have been critical to keeping Canadians informed about the issues that are important to them such as holding governments to account and providing oversight of taxpayer dollars,” said Carmela Laurignano, VP and radio group manager, Evanov Communications Inc. “If we allow local news to die, the health of Canadian society will be seriously undermined.”

The CAB is asking the federal government for a number of relief measures to preserve the industry. This includes immediate financial assistance; regulatory relief that includes relaxing spending requirements on Canadian programming; and a thorough review of the future of media in Canada.


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