We may be living in the Golden Age of Television, but conventional broadcasters aren’t exactly basking in the glow. StatsCan data shows a widening profit gap between broadcast channels like CityTV or CTV and their specialty rivals:
The growing profitability of specialty channels isn’t surprising: the classification includes some of the buzziest names in Canadian television, from Orphan Black-host Space to Rogers’ Sportsnet suite, which pulled off a huge small-screen coup by wresting NHL rights from the CBC (Rogers owns Canadian Business).
With more and more Canadians cut the cable cord, the new era of television might not include the idiot box at all. As the CRTC gets serious about cable unbundling, broadcasters are scrambling to find sure-thing content and unexplored niches. Sports fans have benefited from the move: Rogers’ and Bell’s joint acquisition of MLSE was fuelled in part by a desire to control TV’s last appointment viewing destination.
But the opportunities aren’t restricted to hockey matches; there are audiences to be found in everything from comedy to children’s TV, shopping to adult content. Savvy investors and creators like former Alliance Atlantis CEO and Blue Ant founder Michael MacMillan are betting their money on it:
With Blue Ant, MacMillan appears to be tacking against the torrents of broadcast television dreck at the bottom of the dial by targeting two coveted demographics, the first of which is thinking, affluent baby boomers: its portfolio includes content about the cottage lifestyle, travel, and PBS-style documentary programming through the Canadian version of the Smithsonian Channel, as well as a nature channel called Oasis. Rounding out the offerings, Blue Ant also focuses on millennials with Aux and Bite, which originated with GlassBox. Both pump out content on cable and online, but their YouTube-subscriber and Facebook Like numbers are modest.
Specialty TV makes its money in part from carriage and subscriber fees. But the robust growth in revenues for specialty, pay and video-on-demand (VOD) is also being driven by increasing air time sales — i.e., ad revenue:
Broadcast behemoths like CBS in the U.S. continue to plod along, protected by their sheer size and inertia. And content platforms like Netflix will not necessarily replace their conventional counterparts, because they can’t always compete financially. Many Canadians are choosing cord shaving rather than outright cutting: reducing their cable packages to the bare minimum and supplementing via VOD and streaming services.
The big broadcast players would be well-served to continue investing in the specialty market, because that’s where the money seems to be. This new Golden Age of TV may yet turn out to be a profitable one.